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  • Form of entity

    Corporation (Sociedad Anónima or SA)

    Separate and distinct legal entity. Admits a minimum of 2 shareholders. Managed by a board of directors who are elected by the stockholders of the corporation.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Separate and distinct legal entity. Admits exclusively one shareholder. SAUs are not allowed to be incorporated or wholly owned by SAUs. Managed by a board of directors who are elected by the only stockholder of the corporation.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Separate and distinct legal entity. Admits one or more shareholders. Managed by a board of directors who are elected by the stockholders. There is an established form of bylaws and public notice that, if used, shall enable the registration of the SAS within 24 hours in the City of Buenos Aires. This new corporate type aims to be more agile and economic alternative, both in its incorporation and in the administration and management. Its incorporation and development are entirely digital.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Separate and distinct legal entity. Admits a minimum of 2 members and a maximum of 50. Managed by a single manager or several managers with full powers who may act individually, or by a Board of Managers acting by majority, appointed by the members.

  • Entity set up

    Corporation (Sociedad Anónima or SA)

    • Two or more shareholders
    • The local management is in charge of a Board of Directors, which may have at least one member, no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS $10 million). Directors shall last between one and three years in office, as provided in the bylaws. They may be reelected
    • The President of the Board is the legal representative of the company
    • Statutory auditor is optional. Mandatory if capital stock exceeds ARS $10 million
    • Typical charter document: bylaws
    • Corporate Books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and Attendance Records Book
    • Should cash be paid out as consideration for the stock; only 25% needs to be paid up upfront, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • Only one shareholder
    • The local management is in charge of a Board of Directors, which may have at least one member, no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS $10 million). Directors shall last between one and three years in office, as provided in the bylaws. They may be reelected
    • The President of the Board is the legal representative of the company
    • Permanent control by government
    • Statutory auditor is mandatory (at least one regular and one alternate statutory auditor)
    • Typical charter document: bylaws
    • Corporate Books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and Attendance Records Book
    • Capital stock shall be fully paid up upon execution of bylaws
    • SAUs are not allowed to be incorporated or wholly owned by another SAU

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    • Two or more shareholders
    • The managers must be individuals, who may be appointed for an indefinite period
    • Statutory auditor is optional
    • Typical charter document: bylaws
    • Corporate Books: carried by electronic means (stock ledger, minutes and Attendance Records Book)
    • Should cash be paid out as consideration for the stock; only 25% needs to be paid up upfront, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    • Two or more members
    • The local management is in charge of single or several managers with full powers who may act individually, or a Board of Managers acting by majority. Managers may be appointed for an indefinite term
    • The legal representative of the company can be a single manager. All managers or a president of the Board of Managers are entitled with full powers
    • Statutory auditor is optional. Mandatory if capital stock exceeds ARS $10 million (at least one regular and one alternate member)
    • Typical charter document: bylaws
    • Corporate books: minutes
    • Should cash be paid out as consideration for the stock; only 25% needs to be paid up upfront, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares.
  • Minimum capital requirement

    Corporation (Sociedad Anónima or SA)

    Minimum capital of SA is ARS$100,00.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Minimum capital of SAU is ARS$100,00.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Minimum capital of SAS shall be twice the national minimum vital and mobile wage established at the time of its incorporation (as of March 2018: ARS$17,720).

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    No minimum capital requirement.

  • Legal liability

    Corporation (Sociedad Anónima or SA)

    Directors must act honestly and in good faith in best interests of the company. Directors can be held personally liable to the company, shareholders and third parties if they fail to comply with their general legal duties or specific duties contained in Argentine Law 19,550.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Directors must act honestly and in good faith in best interests of the company. Directors can be held personally liable to the company, shareholders and third parties if they fail to comply with their general legal duties or specific duties contained in Argentine Law 19,550.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Liability of directors of a corporation under Law 19,550 is applicable to SAS managers. In addition, individuals who are not managers or legal representatives of an SAS, or legal persons acting as managers, are liable in the same way as managers, and their liability will be extended to the acts in which they did not intervene but which they habitually performed.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    In case of SRLs, when articles allow distribution of management powers among individual members of the board of managers, board's liability depends on the individual performance of each manager.

  • Tax presence

    Sociedad Anónima (Corporation) and SRL (LLC)

    An S.A., same as an SRL (LLC), is considered an Argentine resident for tax purposes and is obligated to pay taxes on income obtained worldwide, whether earned within Argentina or abroad. An S.A. may take the sums effectively paid abroad for analogous taxes, for activities carried out abroad as a payment for taxes (within certain limits).

  • Incorporation process

    Corporation (Sociedad Anónima or SA)

    File bylaws for registration with the Public Registry. Starting from April 4, 2018, an "urgent" registration process may be followed to obtain the company's registration and its tax ID within 24 hours, in case no observations are made by the Public Registry in the City of Buenos Aires.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    File bylaws for registration with the Public Registry. Starting from April 4, 2018, an "urgent" registration process may be followed to obtain the company's registration and its tax ID within 24 hours, in case no observations are made by the Public Registry in the City of Buenos Aires.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    File bylaws for registration with the Public Registry. There is an established form of bylaws and public notice that, if used, shall enable the registration of the SAS within 24 hours through digital means in the City of Buenos Aires.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    File bylaws for registration with the Public Registry. An "urgent" registration process may be followed to obtain the company's registration, its tax ID and corporate books within 24 hours, in case no observations are made by the Public Registry in the City of Buenos Aires.

  • Business recognition

    Corporation (Sociedad Anónima or SA)

    Well regarded and widely used.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Well regarded.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    This new corporate type aims to be more agile and economic alternative, both in its incorporation and in administration and management. Its incorporation and development will entirely be in digital form.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Well regarded and widely used. This is the type of company usually preferred by foreign shareholders due to tax purposes.

  • Shareholder meeting requirements

    Corporation (Sociedad Anónima or SA)

    Required to hold annual meeting of shareholders to approve the financial statements of the company.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Required to hold annual meeting of shareholders to approve financial statements of the company.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Required to hold annual meeting of shareholders to approve financial statements of the company.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Required to hold annual meeting of members to approve financial statements of the company.

  • Board of director meeting requirements

    Corporation (Sociedad Anónima or SA)

    The board shall meet at least once every 3 months.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Periodical meetings of the board are not required.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    The board shall meet at least once every 3 months.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Periodical meetings of managers are not required.

  • Annual company tax returns

    All corporations must annually file tax returns with federal and state tax authorities.

  • Business registration filing requirements

    Corporation (Sociedad Anónima or SA)

    Initial registration is required, as well as annual filings (financial statements of the company before the Public Registry and the Tax Authority). Every appointment or resignation of directors, change of domicile or bylaws' amendments must be filed with the Public Registry for registration.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Initial registration is required, as well as annual filings (financial statements of the company before the Public Registry and the Tax Authority). Every appointment or resignation of directors, change of domicile or bylaws' amendments must be filed with the Public Registry for registration.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Initial Registration is required. SAS doesn't file its financial statements with the Public Registry, but these documents must be filed with the Tax Authority. Every appointment or resignation of directors, change of domicile or bylaws' amendments must be filed with the Public Registry for registration.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Initial Registration is required. Only SRLs which capital stock exceeds ARS$10 million shall file their annual financial statements with the Public Registry. However, all SRLs must file their fincancial statements with the Tax Authorities.

  • Business expansion

    Corporation (Sociedad Anónima or SA)

    No need to change as business expands.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    If the number of shareholders exceeds one, the SAU must convert to an SA.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    No need to change as business expands.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    If the number of members exceeds 50, the SRL must convert to an SA or SAS.

  • Exit strategy

    Any corporate type shall file dissolution documents with the Public Registry.

  • Annual corporate maintenance requirements

    Corporations and single-shareholders corporations must pay annual fee to the Public Registry.

  • Director / officer requirements

    Not applicable for this jurisdiction.

  • Local corporate secretary requirement

    Not applicable for this jurisdiction.

  • Local legal or admin representative requirement

    Not applicable for this jurisdiction.

  • Local office lease requirement

    In some circumstances, the Tax Authority requires evidence of the declared domicile.

  • Other physical presence requirements

    Not applicable for this jurisdiction.

  • Sufficiency of virtual office

    Not applicable for this jurisdiction.

  • Provision of local registered address by law firm or third-party service provider

    A company must provide its registered address. In certain circumstances, a law firm office can provide the registered address until the local entity hires an office. In this case, the company is requested to move its registered office to its new location.

  • Provision of local director or corporate secretary by law firm or third-party service provider

    A company shall provide a local director. In certain circumstances, a law firm may provide a local director service at a monthly rate.

  • Nationality or residency requirements for shareholders, directors and officers

    Corporation (Sociedad Anónima or SA)

    Majority of members of the board need to be Argentinean residents.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Majority of the members of the board need to be Argentinean residents.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least one director needs to be Argentinean resident (provided that he or she has full powers to represent the company).

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    At least one manager needs to be Argentinean resident (provided that he or she has full powers to represent the company).

  • Restrictions regarding appointment of nominee shareholders or directors

    Not applicable for this jurisdiction.

  • Summary of director's, officer's and shareholder's authority and limitations thereof

    Not applicable for this jurisdiction.

  • Public disclosure of identity of directors, officers and shareholders

    Not applicable for this jurisdiction.

  • Minimum and maximum number of directors and shareholders

    Corporation (Sociedad Anónima or SA)

    • Two or more shareholders
    • Board of Directors, which must have at least one member, no maximum number requirement (at least three directors and one alternative director in case the company's capital stock exceeds ARS$10 million)

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • One shareholder
    • Board of Directors, which must have at least one member, no maximum number requirement (at least three directors and one alternative director in case the company's capital stock exceeds ARS$10 million)

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    • Two or more shareholders
    • The managers must be individuals, who can be appointed for an indefinite period

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    • Two or more members
    • The local management is maintained by a single manager, several managers with full powers who may act individually, or a Board of Managers acting by majority. Managers may be appointed for an indefinite term
  • Minimum number of shareholders required

    Corporation (Sociedad Anónima or SA)

    At least 2 or more shareholders.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Only one shareholder is admitted.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least one shareholder.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    At least 2 or more members.

  • Removal of directors or officers

    Removal of directors or managers shall be approved by the shareholders meeting and then registered in the Public Registry.

  • Required and optional officers

    Not applicable for this jurisdiction.

  • Board meeting requirements

    Not applicable for this jurisdiction.

  • Quorum requirements for shareholder and board meetings

    Corporation (Sociedad Anónima or SA)

    The Board makes decisions by a simple majority of directors present at the relevant meeting, with a quorum of an absolute majority of total number of directors, unless the company's articles provide for a higher quorum and majority.

    In case of annual or regular shareholders' meetings, the required quorum shall be constituted by shareholders representing the majority of the voting shares. If quorum is not reached, the meeting can be held at a second call. In this case, the meeting is duly constituted with any number of shareholders present. On the other hand, special meetings require the presence of shareholders representing 60% of the voting shares, unless the articles provide for a higher quorum. If quorum is not reached, the meeting can be held at a second call. In this case, the meeting is duly constituted with the presence of shareholders representing 30% of the voting shares, unless the articles provide otherwise.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    The Board makes decisions by a simple majority of directors present at the relevant meeting, with a quorum of an absolute majority of total number of directors, unless the company's articles provide for a higher quorum and majority.

    In the case of shareholders' meeting, quorum is reached if at least one shareholder of the company is present.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Meetings may be held physically or through digital means (video or teleconference). Managers and members may call themselves to hold deliberations, with no need of prior notice. The management body's resolutions are valid as long as all members attend, and the majority as stated in the bylaws approve the agenda. Member's resolutions will be valid, provided that all partners attend and the agenda is passed unanimously.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    The Board makes decisions by a simple majority of the managers present at the relevant meeting, with a quorum of an absolute majority of total number of directors, unless the company's articles provide for a higher quorum and majority.

    In case of annual or regular members' meetings, required quorum is constituted by the shareholders representing the majority of the voting shares. If quorum is not reached, meeting can be held at a second call. In this case, the meeting is duly constituted with any number of shareholders present. On the other hand, special meetings require the presence of members representing 60% of voting shares, unless articles provide for a higher quorum. If quorum is not reached, a meeting can be held at a second call. In this case, the meeting is duly constituted with the presence of members representing 30% of voting shares, unless the articles provide otherwise.

  • Must a bank account be opened prior to incorporation, and must the bank account be local?

    Not applicable for this jurisdiction.

  • Auditing of local financials. If so, must the auditor be located in local jurisdiction, and must the company's books be kept locally?

    All companies need to have at least annual financial statements audited. The auditor must be located in Argentina and the company's corporate and accounting books must be kept locally.

  • Requirement regarding par value of stock

    Not applicable for this jurisdiction.

  • Increasing of capitalization if needed

    Not applicable for this jurisdiction.

  • Summary of how funds can be repatriated from your jurisdiction (ie dividends or redemption)

    When approving annual financial statements, shareholders' meeting can resolve to distribute dividends, which will be transferred to respective shareholders.

  • Restrictions on transferability of shares

    Corporation (Sociedad Anónima or SA)

    No restrictions, unless otherwise provided in bylaws. Transfers are reported to the company and recorded in Stock Ledger Book.

    Single-Shareholder Corporation (Sociedad por Acciones Unipersonal or SAU)

    No restrictions, unless otherwise provided in bylaws. Transfers are reported to the company and recorded in  Stock Ledger Book.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    No restrictions, unless otherwise provided in bylaws. Transfers are reported to the company and recorded in Stock Ledger Book.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    No restrictions, unless otherwise provided in bylaws. Transfers shall be reported and registered with the Public Registry of Commerce.

  • Obtaining a name and naming requirements

    Corporate name must contain the type of company it adopted. Name may be reserved before registering the company by paying and filing a form with the Public Registry, in case chosen name is available.

  • Summary of "know your client" requirements

    Not applicable for this jurisdiction.

  • Approval requirements for amending charter document

    Amendments to bylaws in all companies must be approved by shareholders or members' meeting and then filed for registration by the Public Registry.

  • Licenses required to conduct business in jurisdiction

    Not applicable for this jurisdiction.

  • Process of purchasing and utilizing a shelf company

    Not applicable for this jurisdiction.

  • Key contacts

Form of entity

Argentina

Corporation (Sociedad Anónima or SA)

Separate and distinct legal entity. Admits a minimum of 2 shareholders. Managed by a board of directors who are elected by the stockholders of the corporation.

Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

Separate and distinct legal entity. Admits exclusively one shareholder. SAUs are not allowed to be incorporated or wholly owned by SAUs. Managed by a board of directors who are elected by the only stockholder of the corporation.

Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

Separate and distinct legal entity. Admits one or more shareholders. Managed by a board of directors who are elected by the stockholders. There is an established form of bylaws and public notice that, if used, shall enable the registration of the SAS within 24 hours in the City of Buenos Aires. This new corporate type aims to be more agile and economic alternative, both in its incorporation and in the administration and management. Its incorporation and development are entirely digital.

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

Separate and distinct legal entity. Admits a minimum of 2 members and a maximum of 50. Managed by a single manager or several managers with full powers who may act individually, or by a Board of Managers acting by majority, appointed by the members.

Australia

Branch

It is possible for foreign companies to conduct business in Australia through a branch office. A foreign company can establish a branch in Australia by registering with the Australian Securities and Investments Commission (ASIC) as a foreign company carrying on business in Australia. It must also appoint a local agent who will be responsible for ensuring the foreign company's compliance with the Corporations Act 2001 (Cth) (Corporations Act).

Proprietary company

A proprietary company is a limited liability company designed for 50 shareholders or less. It is the most common type of company in Australia, and it has the advantage of being simpler and less expensive to administer than a public company. Managed by a board of directors which is responsible for making business decisions and overseeing the general affairs of the company. Directors can be appointed by other directors or by shareholders, and can be removed by an ordinary resolution of the shareholders.

Public company

Similar in concept to a proprietary company but there is no limit on the number of shareholders. There is also no limit on the ability of a public company to raise funds from the public (subject to satisfying applicable disclosure requirements).

Austria

General Partnership (Offene Gesellschaft, OG)

An entity performing trading activities, the partners of which are fully liable for its debts with their entire assets. At the same time, all partners are managers of the business. Individuals or entities who are not partners must not be involved in the partnership's management.

Limited Partnership (Kommanditgesellschaft, KG)

An entity performing trading activities, with one or more general partners, who have unlimited joint and several liability for all debts of the partnership and one or more limited partners who restrict their liability for its debts to a certain amount which they pay to the entity. Those whose liability is restricted are excluded from the management of the limited partnership. External managers must not be appointed.

Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH)

Separate and distinct legal entity. Managed by its managers (may be shareholders or external individuals) who are responsible for making business decisions and the operations of the company. Managers may be elected by the shareholders of the company or may be appointed in the articles of association. Managers may be shareholders of the company.

Stock Corporation (Aktiengesellschaft, AG)

Separate and distinct legal entity. Managed by its management board (comprising of at least one individual) which is responsible for making major business decisions and overseeing general affairs of a corporation. The management board is elected by the supervisory board of a corporation. The supervisory board (mandatory for stock corporations) must comprise of at least three individuals and is responsible for the supervision of the management board.

Belgium

Public limited company (société anonyme/naamloze vennootschap)

Separate and distinct legal entity. Managed by a board of (at least) two directors, which is responsible for making major business decisions and overseeing the general affairs of the company. Directors are elected by the shareholders of the company. Managing directors (or general managers), who run the day-to-day operations of the company, are appointed by the directors.

Closed limited liability company (société privée à responsabilité limitée/besloten vennootschap met beperkte aansprakelijkheid)

Separate and distinct legal entity. Managed by one or more directors, who are responsible for making major business decisions and overseeing the general affairs of the company. Directors are elected by the shareholders of the company. The day-to-day operations of the company are run by the director(s), who has, in principle, full authority.

Often used by USA companies for tax reasons since it qualifies as check-the-box in the USA.

Belgian branch office of a foreign company

No separate and distinct legal entity from the foreign company. The legal representative will have to represent the foreign company as regards the activities of its Belgian branch office.

Brazil

Limited liability company (Sociedade Limitada)

Sociedades Limitadas are regulated by Law 10,406/02 (Brazilian Civil Code) and residually, whenever set forth in their articles of organization, by Law 6,404/76, as amended, which regulates Brazilian corporations.

A Sociedade Limitada is simple to incorporate and operate, since very few formalities are required for its organization and management.

Corporation (Sociedade Anônima)

Legal entity suitable for several types of businesses and investments. Non-listed corporations are simple to incorporate and operate, but more formalities are required for its organization and management when compared to the Sociedade Limitada. One example is the mandatory publication of certain corporate acts.

Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors.

Note: The Law 12,441/11 provided the constitution of the Limited Liability Individual Company (EIRELI) which shall be created by a sole individual, being right that its corporate capital shall be of, at least, the amount corresponding to 100 minimum wages. The Limited Liability Individual Company (EIRELI) is additionally ruled by the provisions established for Sociedades Limitadas.

Canada

Corporate subsidiary (corporation form rather than flow-through form) 

Separate and distinct legal entity. May incorporate federally (under the Canada Business Corporations Act) or provincially (for example, under the Business Corporations Act (Ontario)). Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors.

Chile

Branch of a foreign corporation (Agencia de Sociedad Anónima Extranjera)

This is not an autonomous legal entity, but rather a branch of the parent company operating in the country. The branch shall be managed by an agent, who shall be vested with broad powers to represent the foreign corporation.

Corporation (Sociedad Anónima)

May be either "public" (publicly traded) or "private" – public corporations are subject to regulation by the Superintendence of Securities and Insurance, while private corporations are not. Managed by a board of directors appointed by the shareholders. Board is responsible for administration and representation of the company, delegating some of its powers to the CEO and other officers. The liability of the shareholders is limited to the amount of their contribution.

Limited liability company (Sociedad de Responsabilidad Limitada)

Limited liability companies are not subject to any supervisory control by the Chilean authorities. Managed by one or more partners, a third party or a board of directors appointed for that purpose.

Limited liability partnership (Sociedad en Comandita)

Limited liability partnerships are those where there are one or more general partners with unlimited liability for the debts of business and general powers of administration and one or more limited partners with limited liability and a limited right to participate in the management of the company. These companies are not subject to any supervisory control by Chilean authorities. Limited liability partnership is managed by general partners of a company. General partners are in charge of determining the management structure.

Partnership limited by shares (Sociedades por Acciones)

A hybrid between corporations and limited liability companies, except that SpA's can be incorporated by a single partner and are more flexible in certain areas such as capital increases, distribution of profits and can be used to conduct different lines of businesses at the same time. Managed by one or more partners, a third party or a board of directors appointed for that purpose.

China

Independent legal entity. In terms of companies set up by or with foreign investors, there is certain overlap between the general company law and the foreign investment laws. Therefore, depending on the foreign shareholding ratio in an LLC or a company listed by shares as discussed below, the company may also be classified as a wholly foreign owned enterprise (WFOE), or a Sino-foreign joint venture enterprise, either an equity joint venture (EJV) or a contractual joint venture (CJV) as applicable.  

Limited liability company (LLC)

  • Managed by a board of directors, or a single executive director (usually adopted by LLCs with a limited number of shareholders and relatively small size of operation, but not applicable to a Sino-foreign joint venture), responsible for making major business decisions and overseeing general operations of an LLC
  • The highest authority of a Sino-foreign joint venture is the board of directors. The highest authority of a WFOE is the shareholder(s)
  • Director or the executive director is appointed/elected by the shareholder(s) of an LLC
  • Senior management officers run the day-to-day operations of an LLC, as led by a general manger who usually is appointed by the board of directors or executive director

Company limited by shares

  • Independent legal entity
  • Board of directors has overall management responsibility, making major business decisions and overseeing general operations of a company
  • Director is appointed/elected by shareholders of a company
  • Senior management officers run the day-to-day operations of an LLC, as led by a general manger who usually is appointed by the board of directors

Partnership enterprise

  • NOT a separate legal entity
  • Partnership Agreement sets forth how the business is to be managed; one or several general partners can be designated to manage the business

Colombia

Under Colombian law, there are five types of commercial entities that can be incorporated:

General partnership (Sociedad Colectiva)

Partners have subsidiary personal liability and the partnership board is the highest corporate body. A minimum of two partners are required at all times. General Partnerships are closed companies, where partners must manage the company themselves or unanimously authorize a third person to do so, as well as unanimously authorize total or partial assignment of participation in the company, or the possibility for partners to carry out similar lines of business on their own.

Limited partnership (Sociedad en Comandita Simple y por Acciones)

A hybrid type of company, where partners can either be managing partners or limited partners. Each type of partner has different levels of liability, functions, voting rights and participation in the company. There are also two types of limited partnerships under Colombian law. The simple limited partnership, where partner's contributions are established as participation quota; and the share limited partnership, where partner's contributions are established as shares.

Limited liability company (Sociedad de Responsabilidad Limitada)

The limited liability lompany is a hybrid type of company where partners can limit their responsibility to the amount of their contributions as a general rule, but there are certain exceptions, such as responsibility regarding taxation, labor regulation or if such extended responsibility is included in the company's bylaws. Limited liability companies must have a minimum of two partners and a maximum of 25.

Corporation (Sociedad Anónima)

Shareholders have no personal liability. A corporation must have the Shareholders General Assembly as the highest corporate body, a board of directors, a legal representative designated by the board of directors and a statutory auditor. A minimum of five shareholders is required, and it is generally used for large enterprises or financial institutions that are subject to control and surveillance of the Colombian Superintendence of Finance.

Simplified stock company (Sociedad por Acciones Simplificada)

Most recent and flexible type of the commercial entity created under Colombian legislation. Shareholders have no personal liability. A simplified stock company must have a Shareholders General Assembly as the highest corporate body and a legal representative. It can have a board of directors if shareholders require it. A minimum of one shareholder is required and there is no maximum requirement.

Czech Republic

Unlimited partnership (veřejná obchodní společnost, v.o.s.)

A company in which at least two partners run their business under a common business name and are liable for all the partnership's debts to the full extent of their assets. Company does not need to have any registered capital. Monetary contributions of the shareholders to the company are voluntary. Each partner has a right to manage a partnership within the guidelines agreed by partners. One or more partners may, however, be entrusted with management responsibilities. All decisions are made jointly by all partners, unless articles of association stipulate that a majority vote is sufficient. Transfer of ownership interest is currently forbidden.

Limited partnership (komanditní společnost, k.s.)

A company with one or more partners that are liable for the debts of the company to the full extent of their assets (unlimited partners), and one or more partners that are liable for the debts of the company up to the amount of their unpaid capital contributions (limited partners). A limited partner must contribute to the registered capital of a company in the amount provided for in the partnership contract. Unlike unlimited partners, limited partners are able to transfer their ownership interests. The limited partner must provide a monetary contribution.

Limited liability company (společnost s ručením omezeným, s.r.o./spol. s r.o.)

Separate and distinct legal entity. Managed by one or more managing directors, who are responsible for making major business decisions and overseeing general affairs of a corporation as well as the day-to-day operations of a stock corporation. One of the most common types of company in the Czech Republic. Registered capital consists of contributions by shareholders who are liable for debts of a company up to the amount of their unpaid contribution to the registered capital. The company is liable for its debts to the full extent of its assets. A supervisory board may also be established; however, it is not mandatory.

Joint stock company (akciová společnost, a.s.)

Separate and distinct legal entity. Registered capital consists of shares with a certain nominal value. It is liable for its debts to the full extent of its assets. The governance system may be two tier with a board of directors (představenstvo) and supervisory board (dozorčí rada), or single-tier with a statutory director (statutární ředitel) and administrative board (správní rada). The company may issue registered or bearer shares. Bearer shares can be, however, issued only as dematerialized shares registered by the securities depository.

Denmark

Kapitalselskab

There are three types of limited companies: public limited companies, private limited companies and entrepreneur companies. They are all separate and distinct legal entities. A limited company is owned by the shareholders, and the shareholders meeting is the ultimate authority of the company. However, the shareholders mainly control the company by instructing and supervising the board of directors and/or the general manager. Only the company is liable to creditors for corporate debts, and once the share contribution has been paid, the shareholders have no obligation to contribute further to the capital of the company.

Egypt

Joint Stock Company (JSC)

  • A separate legal entity that may be a private company or a public company
  • It may offer its shares to public subscription, issue bonds, and convertible securities and offer them to public
  • The name of a JSC must derive from its object/purpose and may include the name(s) of any of its shareholders
  • No restrictions on foreign ownership and the company may be wholly owned by foreigners, except for activities that are restricted by law for foreigners to participate in, such as commercial agency and import and export
  • Managed through a minimum of three directors. This Board of Directors (BoD) is responsible for making major business decisions, appointing persons for the day-to day management and overseeing general affairs of a company. All foreign BoD members must pass a security clearance, but company can conduct business after it submits a completed application that is pending approval
  • Foreign employees cannot exceed 10% of all JSC employees

Limited Liability Company (LLC)

  • A separate legal entity that is a privatecompany and it cannot be listed or traded on any stock exchange
  • An LLC may not issue bonds or other financial debentures that are offered to public
  • Company can be wholly owned by foreign persons and, except for activities that foreigners cannot lawfully participate in, including commercial agency and import/export, there are no restrictions on such foreign ownership of an LLC
  • Shareholders appoint a manager or several managers to manage a company, provided that there must be at least one Egyptian manager

One-Person Company (OPC)

  • Newly introduced to the Egyptian Market (Law No. 4 of 2018).
  • Formed by a sole founder, who can be either a natural or a legal person
  • An OPC's shares cannot be traded on any stock exchange
  • An OPC cannot issue bonds or other financial debentures that are offered to public
  • No restrictions on foreign ownership except for activities that foreigners are prohibited from participating (eg, commercial agency and import and export activities)
  • Managed through the shareholder/founder or an appointed manager(s), provided that there must be at least one Egyptian manager
JSC, LLC & OPC collectively to be called: "Corporate Entities" in some provisions in this guide.
There are other legal forms in Egypt but the abovementioned companies are the most commonly used.

Branch of a Foreign Corporation (Branch)

  • Not a separate legal entity
  • Foreign corporation can conduct business in Egypt via a local branch
  • A foreign-based company can establish a branch in Egypt by registering with General Authority for Investment and Free Zones (GAFI) as a foreign company carrying on business in Egypt
  • A branch must be formed for the purpose of implementing specific public or private sector agreements in Egypt
  • One or more branch managers, whether Egyptian or foreign, must be appointed to run the business activities in Egypt
  • Business name must contain the name of aforeign-based company

 Representative Office (RO)

  • Not a separate legal entity
  • Can only be used for studying the feasibility of production or carry out market surveys
  • Cannot engage into any commercial activities or execute agreements with third parties on behalf of a foreign company

Finland

Limited Liability Company (Fi: Osakeyhtiö, Oy)

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing general affairs of the company. Directors are elected by the shareholders of the Oy. The managing director (optional), who runs the day-to-day operations of the Oy, is appointed by the board of directors. Other officers are appointed by the board of directors or by the managing director.

Note: There are other legal forms in Finland but the limited liability company is the most commonly used.

France

Société par actions simplifiée (SAS)

SAS is an increasingly used type of company, mainly because of its great flexibility and low capital requirements. SAS is a more flexible corporate form than the SARL which is a more binding vehicle. The SAS is essentially a simplified form of the SA. It has a number of advantages due to its flexibility such as:

  • The law does not impose a particular management structure for the SAS
  • There is greater freedom for organizing the management and operating structures of an SAS

SAS does not have access to the capital markets and its shares cannot be listed on a stock exchange.

Société à responsabilité limitée (SARL)

Easy to set up and operate. Relevant for small businesses. One or more directors, who must not be corporate entities, but do not need to be shareholders. The SARL is a widely utilized form of corporation in France, mainly due to the number of advantages it offers to small businesses, such as low capital requirements and simple rules and regulations. It is more restrictive and less flexible than the SAS but has the benefit of not requiring a statutory auditor if certain thresholds are not passed. Sweat equity permitted: a shareholder offers the company his time, work and professional knowledge (does not contribute to forming the capital but has right to shares in company: share of profits and participation in collective decisions).

SARL does not have access to the capital markets and its shares cannot be listed on a stock exchange.

Société anonyme (SA)

SA is an historical legal form mainly used by large corporations in France, as it enables public offering of shares. Tailored for large companies needing external capital by resorting to the market, it is a very complex form of company, not commonly appropriate for a first incorporation in France.

Branch of a foreign company

Under French law, an entity operating in France shall register with the French Registry of Commerce and Companies (RCS) only if it is conducting a "commercial activity." A foreign company is only required to register with the local Registry of Commerce and Companies when its operations in France constitute a permanent establishment, where an autonomous activity (as opposed to "preparatory and auxiliary" activities) is being conducted and managed by an agent of the foreign company or a person who may bind the foreign company vis-à-vis third parties.

Under French law, the branch is a direct form of implantation in France of a foreign company. A branch is not a separate legal entity and is therefore deemed to be the same legal entity as the foreign company, which remains solely responsible for the operation of its branch in France.

The main difference between a French branch and a French subsidiary is that:

  • A branch is a mere emanation of the parent company in France, with no legal existence or distinct assets or liabilities
  • A subsidiary is an independent entity with its own legal existence, bylaws and capital contributions 

As a consequence, the parent company:

  • Has unlimited liability for any debts and liabilities incurred by the branch in France and
  • Has limited liability for the debts and liabilities incurred by its subsidiary in case it becomes insolvent (ie, limited to its initial capital contribution and the amount of any shareholder's loan which cannot be reimbursed within the context of a liquidation due to insufficiency of assets)

Germany

GmbH – limited liability company

The GmbH is a company for all kinds of business with a corporate organization and its own legal personality. The shareholders mainly control the company by instructing the managing directors. It has a share capital, which matches the sum total of the share contributions to be made by the shareholders. Only the company is liable to creditors for corporate debts. The legal frame allows individual formation to a certain extent.

Greece

Societe anonyme (S.A.)

A societe anonyme is a legal entity where liability can be imposed  solely on its assets and not personally on its shareholders.

A societe anonyme is a company managed by its general meeting of shareholders and its board of directors. The board of directors is competent to decide on every act concerning the management of the company, the administration of its assets and the pursuance of the company's business activites in general.

Directors are elected by the shareholders of the company.

Officers, who run the day-to-day operations of the company, are appointed by directors.

Limited liability company (L.T.D.)

Separate and distinct legal entity. The governing body of the company is the partners meeting (assembly) which is responsible for making major business decisions and overseeing general affairs of the company. The director administrator) of the company is elected by the company's partners and is the legal representative and responsible for managing the day-to-day operations and business of the company.

Private company (P.C.)

Separate and distinct legal entity. The governing body of the company is the partners meeting (assembly) which is responsible for making major business decisions and overseeing general affairs of the company. The director (administrator) of the company is elected by the company's partners. Director is the legal representative of the company and is responsible for managing the day-to- day operations of the company.

Hong Kong

Limited private companies

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders or the board of the corporation. Officer could be appointed by directors to run the day-to-day operations of the corporation.

Hungary

Private company limited by shares (Zrt.)

Private company limited by shares (zártkörűen működő részvénytársaság or Zrt.) is a separate and distinct legal entity.

Zrt. is established with a predetermined amount of share capital. Such share capital is represented by shares with a face (par or nominal) value.

The owners of a Zrt. are the shareholders. Liability of the shareholders is limited to their respective share capital contributions.

Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of a Zrt.

Directors are elected by shareholders of a Zrt. Company managers may also be appointed by shareholders to assist the directors in the day-to-day operations of the Zrt.

Limited liability company (Kft.)

Limited liability company (korlátolt felelősségű társaság or Kft.) is a separate and distinct legal entity.

Kft. is established with a predetermined amount of initial capital provided by its quotaholders. Equity contribution of such quotaholders is not (and must not be) embodied in any negotiable instrument (eg, share certificate). Liability of the quotaholders is limited to their capital contributions.

Managed by managing directors appointed by quotaholders. Company managers may also be appointed by quotaholders to assist managing directors in the day-to-day operations of the corporation.

Note: Further corporate forms are also available: general partnership (közkereseti társaság or Kkt.), limited partnership (betéti társaság or Bt.) and public company limited by shares (nyilvánosan működő részvénytársaság or Nyrt.), but these corporate forms are not very common in the Hungarian market.

India

Private limited company

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders of the company. Officers, who run the day-to-day operations of the company, are appointed by the directors.

Indonesia

Limited liability company

A separate and distinct legal entity, managed by a board of directors responsible for making major business decisions and overseeing the general affairs of the company, under the supervision of a board of commissioners. The members of the board of directors and board of commissioners are appointed and dismissed by the general meeting of shareholders. 

Ireland

Private company limited by shares (LTD)

Separate and distinct legal entity. Managed by a board of directors which has collective authority and is responsible for managing the affairs of the company. Subject to the constitution, directors can be appointed by resolution of the board or the shareholders. A LTD cannot offer their shares to the public and the right to transfer shares must be restricted by the company’s constitution. Shareholders have limited liability protection.

Private unlimited company (ULC)

Separate and distinct legal entity. Managed by a board of directors which has collective authority for and is responsible for managing the affairs of the company. Subject to the articles of association, directors can be appointed by resolution of the board or the shareholders. ULCs cannot offer their shares to the public and the right to transfer shares must be restricted by the company’s articles of association. Shareholders can be held liable for all the debts of the company in the event of an insolvent liquidation.

External company

A company with limited liability incorporated under the laws of another jurisdiction and which establishes operations in Ireland is obliged to register as an external company (ie a branch) in certain circumstances. The branch is treated as part of the same legal entity as the company. The requirement to register a branch generally arises where the Irish operations of the foreign company has authority to independently negotiate and contract directly with third parties on an independent basis. From an Irish perspective, the branch is not a separate legal entity to the “home” or “parent” company.

Israel

Company

Separate and distinct legal entity. Must be registered with the Israeli Registrar of Companies. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the company. Directors are appointed by the shareholders of the company. The general manager, if appointed (appointment is not required), is appointed by the board of directors and runs the day-to-day operations of the corporation. Other officers may be appointed.

Branch / representative office

A foreign corporation conducting business in Israel must register as a Foreign Company with the Israeli Registrar of Companies. The Foreign Corporation is regarded as the same legal entity as the Original Entity.

Italy

Società a responsabilità limitata (S.r.l.)

Separate and distinct legal entity. A S.r.l. can be managed by:

  • A sole director
  • A board of directors, composed by two or more members
  • Two or more directors acting jointly or severally

Directors can also be quotaholders. Directors are elected by the quotaholders with a proper decision.

Japan

Registered branch

This form is often used by foreign companies seeking to gain presence and do business in Japan without establishing a subsidiary. A foreign company must appoint at least one representative in Japan.

Kabushiki-Kaisha (KK)

A KK is distinct legal entity. KKs are most similar to C-corporations in other jurisdictions. The liability for shareholders is limited and the KK is a well-established structure. The KK may be established with or without a board of directors.

Godo-Kaisha (GK)

A GK structure is similar to an LLC in other jurisdictions. The GK allows more flexibility in regards to corporate governance and management decisions. The annual corporate governance requirements costs are generally lower as there are few formal corporate governance requirements that must be observed.

Luxembourg

Private limited liability company (Société à responsabilité limitée or S.à r.l.)

Separate and distinct legal personality. Managed by a manager or a board of managers responsible for making major business decisions and overseeing the general affairs of the company. Managers are elected by the shareholders and may represent the company acting alone, or as set out in the articles of association, if more than one is appointed.

Public limited liability company (Société anonyme or S.A.)

Separate and distinct legal personality. An S.A. can be organized as a one-tier company (ie managed by a sole director or a board of directors composed of at least 3 directors) or two-tier company (ie an executive board (directoire) and a supervisory board (conseil de surveillance). Directors are elected by the shareholders and may represent the company acting alone, or as set out in the articles of association, if more than one is appointed.

Special limited partnership (Société en commandite spéciale or SCSp)

Largely inspired by the Anglo-Saxon limited partnership regimes, the special limited partnership (SLP) has been designed to bolster Luxembourg’s position as the main alternative investment fund structuring hub in the EU at a time when the manager regulation is seen as a potential substitute for product regulation. With no legal personality, the SCSp is formed by written agreement for a limited or unlimited duration, between one or more general partner(s) (associés commandités) jointly and severally liable for the partnership's commitments, and one or more limited partner(s) (associés commanditaires) whose liability does not extend beyond their commitment. High level of contractual freedom and structuring flexibility characterize the SCSp as most of the relevant provisions applicable to the SCSp can be contractually set forth in the limited partnership agreement.

Malaysia

To start a business in Malaysia, the first step is to set up a business entity with the Companies Commission of Malaysia. There are two types of business entities:

  • The unincorporated entity
  • The incorporated separate legal entity

The unincorporated entities are:

  • Sole proprietorship
  • Partnership

A sole proprietorship is an entity with one person, whereas a partnership is a business entity, which is owned by at least two persons but not more than 20 persons. Both the sole proprietorship and partnership do not constitute separate legal entities and the business partners can sue and be sued in their personal names. A business owner or partners are exposed to personal risks and liabilities.

The incorporated separate legal entities are:

  • A company limited by shares or private limited company
  • A company limited by guarantee
  • Unlimited company
  • Limited liability partnership

Private limited companies are the most established business entities, as the shareholders of private limited companies are not exposed to personal risks and liabilities; their liabilities are limited to the number of shares that are owned by them.

Mexico

S.A. de C.V.

Separate legal entity, independent from its shareholders. Two shareholders are required at all times. Shareholders meetings are the supreme organ of the corporation. Managed by a board of directors or a sole administrator, which is responsible for taking major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors or the shareholders meeting.

S. de R.L. de C.V.

Separate legal entity, independent from its partners. Two partners are required at all times. Partners meetings are the supreme organ of the company. Managed by a board of directors or a sole administrator, which is responsible for taking major business decisions and overseeing the general affairs of the company. Directors are elected by the partners of the company. Officers, who run the day-to-day operations of the company, are appointed by the directors or the partners meeting.

S.A.P.I. de C.V.

Separate legal entity, independent from its shareholders. Two shareholders are required at all times. Shareholders meetings are the supreme organ of the corporation. Managed by a board of directors, which is responsible for taking major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors or the shareholders meeting.

Netherlands

Branch office

Not a separate legal entity, it is a local office of a non-Dutch legal entity in the Netherlands (the head office).

B.V. (private company with limited liability)

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions, overseeing the general affairs and running the day-to-day operations of the BV. Directors are appointed by the shareholders of the BV. A BV can have a supervisory board to supervise the policies of the board of directors and the general course of affairs of the BV and its affiliated business. It is also possible to create a so called -one-tier board, consisting of executive and non-executive directors.

Co-operative U.A.

Separate and distinct legal entity. Managed by a management board, which is responsible for making major business decisions, overseeing the general affairs and running the day-to-day operations of the Co-operative. Directors are appointed by the members of the Co-operative. A Co-operative can have a supervisory board to supervise the policies of the management board and the general course of affairs of the Co-operative and its affiliated business.

C.V. (a limited partnership)

A CV is not a legal entity under Dutch law. It is an (partnership) agreement between one or more general partners and one or more limited partners. The general partner has overall management and day-to-day responsibility. The partnership agreement can provide for the possibility that the partners elect a management committee, which will manage the day-to-day business activities of the CV and carry out the business and activities of the CV on behalf of the general partner in accordance with the power granted to them by the general partner.

Philippines

Subsidiary

A subsidiary is a domestic stock corporation, either wholly or partially-owned (but controlled) by a foreign corporation. It has a separate and distinct legal entity from its parent. It is managed by its board of directors, which exercises all corporate powers, conducts all business and controls all property of the corporation. Directors are elected by stockholders from stockholders themselves. Officers are elected by the directors, and they perform the duties imposed on them by law and the by-laws of the corporation.

Branch office

It is an extension of, and not a separate and distinct entity from, the foreign corporation. It carries out business activities of the head office and derives income from the Philippines. A resident agent is designated, to whom summons and other legal processes may be served on behalf of the foreign corporation.

Representative office

It is an extension of, and not a separate and distinct entity from, the foreign corporation. It deals directly with the clients of the head office in the Philippines but does not derive income from the country and is fully subsidized by its head office. A resident agent is designated, to whom summons and other legal processes may be served on behalf of the foreign corporation.

Regional or area headquarters

It is an administrative branch of a multinational company and, thus, not a separate and distinct legal entity. It is established to supervise, communicate and coordinate the multinational company's subsidiaries, affiliates and branches in the Asia-Pacific region. It is not allowed to do business or derive any income from sources within the Philippines. Its operations must be fully subsidized by way of inward remittances from its head office.

Regional operating headquarters

It is an administrative branch of a multinational company and, thus, not a separate and distinct legal entity. It is established to perform qualifying services to the multinational company's affiliates, subsidiaries or branches in the Philippines, the Asia-Pacific region and other foreign markets. It is prohibited from offering its services to entities other than the foregoing. It is also prohibited, directly or indirectly, to solicit or market goods and services on behalf of the multinational company, or any of its affiliates or subsidiaries. It is allowed to derive income from sources within the Philippines.

Partnership

Partnership has a legal personality separate and distinct from its partners. Generally, each partner is considered an agent of the partnership and his or her acts are binding, unless otherwise provided in the Articles of Partnership. A foreign corporation may be a partner in a domestic partnership only after such foreign corporation obtained a license to transact business in the Philippines.

Poland

Foreign companies can conduct business activity in Poland in forms similar to those that can be found in other European countries. These include:

  • Commercial companies or corporations (limited liability companies and joint-stock companies)
  • Partnerships (general partnerships, professional partnerships, limited partnerships and limited joint-stock partnership)
  • Branch offices of foreign companies
  • Representative offices of foreign companies

Portugal

The most common structures are a private limited liability company, with 1 sole shareholder or more, and a joint stock company, with 1 sole shareholder or more.

Private limited liability company (LDA)

Minimum share capital required is €2. Capital is divided into participations (quotas), which may have different face values. If it just has one shareholder, the minimum share capital required is €1.

Contributions into share capital may be made in cash or in kind.

The corporate structure of a private limited liability company is simplified. The majority of these companies have one or more directors as a mandatory body, who have the power to manage and represent the company.

A supervisory board may be appointed and is mandatory if a company meets two of the following thresholds:

  • Total amount of balance of €1.5 million
  • Total amount of net sales and other profits of €3 million
  • An annual average of 50 employees

It is a limited liability company.

Joint stock company (SA)

Minimum share capital required is €50,000. Capital is divided into shares, all with the same face value.

Contributions into the share capital may be made in cash or in kind.

The corporate structure of a joint stock company may be simple or complex. Generally, besides the general assembly, it will have a Board of Directors and a Statutory Chartered Board.

It is a limited liability company, with an exception, should any shareholders have held 100% of stock, until 90% of share capital, vis-à-vis the creditors of a company.

Limited liability partnership (Sociedade em comandita)

A limited liability partnership is a legal entity, which can act in its own name, acquiring rights and incurring liabilities.

At least one of the limited liability partnership members is subject to unlimited personal liability regarding the partnership’s obligations, while the remaining partners’ liability is limited to the amount of the share capital taken up.

Name of limited liability partnership must include the name of all, some or one of the liable partners. Names of non-liable partners may not be included in the corporate name without their express consent.

Partnership company (sociedade em nome colectivo)

A partnership company is a legal entity which can act in its own name, acquiring rights and incurring liabilities. However, besides the company’s assets, the shareholders’ assets may also be challenged by creditors for the payment of company debts.

Contributions to this type of commercial company may be made either in cash or in kind (eg, labor).

The name of a partnership company must include the name of all, some or one of the shareholders. In the second and third case, the partnership´s name must end with a reference that points to the existence of other members.

Puerto Rico

Corporations

Corporations are entities whose liability is separate and distinct from that of their shareholders, directors and officers. Corporations may be established for any licit business purposes, with limited exceptions. They may be organized by individual(s) and/or legal entities by filing a certificate of incorporation at the Puerto Rico State Department. A corporation has the power to enter into contracts, hold property and sue and be sued in its own name; it also has continuity of existence and free transferability of ownership interests. Generally, the certificate of incorporation grants the corporation legal existence as soon as it is filed with the PR Secretary of State.

Puerto Rico corporations and limited liability companies must maintain a designated principal office and registered agent for service of process in Puerto Rico.

Limited Liability Companies

Limited liability companies (LLCs) are becoming the preferred method of doing business in Puerto Rico. LLCs may be organized by any natural or legal person by filing articles of organization (also referred to as the certificate of formation) in the Puerto Rico State Department. LLCs offer their owners the same limited liability protection granted by law to corporations and the flexibility to manage their internal affairs as a partnership, corporation or a combination of both in accordance with an LLC agreement (also referred to as an operating agreement), which typically governs the entity. LLCs are taxed by default as corporations and are subject to tax at both the business entity and shareholder levels. However, LLCs may elect to be treated as partnership for tax purposes, receiving pass-through treatment by filing Form SC 6045 Partnership or LLC Classification. Form SC 6045 must be filed no later than the last day of the third month following the LLC's date of organization or commencement of operations. Although a Puerto Rico LLC is automatically treated as a corporation for US federal tax purposes, it may elect to be treated as a partnership or disregarded entity, as applicable. This election is accomplished through the filing of Form 8832 with the IRS.

Romania

Several types of companies can be used as corporate vehicles in Romania. Joint stock companies (societate pe actiuni, JSC) and limited liability companies (societate cu raspundere limitata, LLC) are the most commonly used given their flexible incorporation procedure and limitation of the shareholders' liability.

Joint stock company (JSC)

It is a separate and distinct legal entity.

A JSC may be managed by:

  • One or more directors (forming a board of directors), with management delegation possibility, in the one-tier system; directors are appointed by the general meeting of shareholders while managers are appointed by the board of directors
  • An executive board and a supervisory board, in the two-tier system; members of the executive board are appointed by the supervisory board; members of the supervisory board are appointed by the general meeting of shareholders

Generally, if a JSC is managed by a one-tier system, a sole director/board of directors represent(s) the company through its president. Under the two-tier system, representation power is exercised by members of the executive board.

Special provisions apply in case of public listed companies.

Limited liability company (LLC)

It is a separate and distinct legal entity.

An LLC may be managed by one or more directors, appointed by the general meeting of shareholders.

Company is represented by its directors.

Russia

Joint-stock company (public and non-public)

A commercial organization the charter capital of which is divided into a definite number of shares. Shares qualify as securities in the meaning of Russian law. The shareholders of the company are not liable for the obligations of the company and bear the risk of losses in connection with the company’s activity within the cost of shares in their possession.

Managed by the general shareholders' meeting (the highest governing body of the company) which is responsible for major decisions regarding the company – amending the charter, reorganization and liquidation, distribution of profit, approving annual reports and some deals etc.; by the executive body (managing director or managing director and directorate) which is responsible for day-to-day activities of the company and by the board of directors, which is responsible for overseeing the general affairs of the company.

The company may also opt to have two or more managing directors who may act separately or jointly.

In a company with less than 50 shareholders the charter of the company may provide that the functions of the board of directors of the company shall be carried out by the general shareholders' meeting.

Limited liability company

A commercial organization the charter capital of which is divided into participatory interests. Participatory interests do not qualify as securities in the meaning of Russian law. The company members are not liable for the obligations of the company and bear the risk of losses in connection with the company’s activity within the cost of the contributions they have made.

Managed by the general members' meeting (the highest management body of the company) which is responsible for major decisions regarding the company – amending the charter, reorganization and liquidation, approving annual reports etc., by the executive body (managing director or managing director and directorate) which is responsible for day-to-day activities of the company and, in some cases, by the board of directors, which is responsible for overseeing the general affairs of the company.

The company may also opt to have two or more managing directors who may act separately or jointly.

Saudi Arabia

Limited liability company

A limited liability company is a popular corporate vehicle among foreign investors in Saudi Arabia. The personal liability for each of the partners/shareholders is limited to the individual partner's contribution to the company's share capital.

Singapore

Limited liability company 

Separate and distinct legal entity with limited liability for its members. The business of a company shall be managed by, or under the direction or supervision of, a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the company. Appointment of directors is generally left to the company's constitution (Constitution) as the Companies Act (Chapter 50 of Singapore) (CA) does not prescribe the manner in which directors are to be appointed and they are typically nominated by the shareholders of the Company. Favorable one tier corporate taxation regime proves to be advantageous to shareholders.

South Africa

There are different types of entities to conduct business in South Africa. The most used ones are as follows:

  • Private company
  • Public company
  • External company
  • Sole proprietor
  • Trust
  • Partnership

South Korea

Joint-stock company (Jusik Hoesa)

Separate and distinct entity.

  • Shareholder meeting is the ultimate decision-making body and determines fundamental matters
  • Board of directors, which is comprised of directors who are elected at shareholder meeting, decides important matters related to daily operations of the company not specially reserved for determination by shareholder meeting
  • Representative director or executive officer, who is elected by the board of directors, is the administrative arm responsible for implementing the decisions of shareholder meeting and board of directors with authority to bind the company, and
  • Statutory auditor(s) supervise(s) the management of the company’s business and audits the company’s accounts

Limited company (Yuhan Hoesa)

  • Member meeting is the ultimate decision-making body and determines fundamental matters
  • Directors, who are elected at member meeting, decide important matters related to daily operations of the company not specially reserved for determination by member meeting by majority vote of directors
  • Director (in case a limited company has one director) or representative director who is elected at member meeting (in case a limited company has two or more directors) is the administrative arm responsible for implementing the decisions of member meeting and directors with authority to bind the company, and
  • Statutory auditor(s) (if any) supervise(s) the management of the company’s business and audits the company’s accounts

Spain

Branch (Sucursal)

Secondary establishment, subordinated to a headquarters, with permanent representation and certain degree of autonomy, through which the principal company's business is totally or partially carried out. The board of directors of the headquarters will be competent to determine the creation of a branch as well as its cancelation or change of location.

Limited liability company (Sociedad Limitada)

Separate and distinct legal entity. Managed by a board of directors, a sole director, joint directors or joint and several directors. Board of directors (or the relevant directors if there is no board) is responsible for making business decisions and overseeing the affairs of a company. Directors are appointed by shareholders of a company. Executive committee and managing directors are only appointed if there is a board of directors that requires delegation of board powers.

Joint-stock company (Sociedad Anónima)

Separate and distinct legal entity. Managed by a board of directors, a sole director, joint directors or joint and several directors. Board of directors (or relevant directors if there is no board) is responsible for making business decisions and overseeing the affairs of a company. Directors are elected by shareholders of a company. Executive committee and managing directors are only appointed if there is a board by its directors and require delegation of board powers.

Sweden

Limited company (Sw. aktiebolag, AB)

A limited company (Sw. Aktiebolag AB) is a separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing general affairs of a company. Directors are elected by shareholders of an AB. The managing director (optional in private AB's, required in public AB's), who runs the day-to-day operations of an AB, is appointed by the board of directors. Other officers are appointed by the board of directors or by the managing director.

Trading partnership (Sw. handelsbolag, HB)

Under the Partnership and Non-registered Partnership Act (Sw. Handelsbolagslagen) a trading partnership (Sw. Handelsbolag, HB) is constituted by an agreement between two or more individuals and/or legal entities to conduct business in association. The HB's most frequently cited advantage is its flexibility. Partners are free to organize their relations as they see fit without the restraints of a corporate form. Within the framework of an HB, complex structures can be set up to allow for many different characteristics and circumstances. The partners in an HB are personally liable for the partnership's agreements and debts.

Limited partnership (Sw. kommanditbolag, KB)

A limited partnership (Sw. Kommanditbolag, KB) is a form of a trading partnership in which one or more of partners has reserved the right not to be liable for the obligations of a KB in excess of the sum he or she has contributed or undertaken to contribute to a KB. Such a partner is referred to as a limited partner (Sw. Kommanditdelägare). Other partners in a KB are referred to as general partners (Sw. Komplementär). A KB must have two 2 or more partners, at least one 1 general partner and one 1 limited partner.

The partnership's most frequently cited advantage is its flexibility. Partners are free to organize their relations as they see fit without the restraints of a corporate form. Within the framework of a partnership, complex structures can be set up to allow for many different characteristics and circumstances.

Branch office (Sw. filial, Branch)

A branch (Sw. Filial) is the branch office of a foreign company with a separate management in Sweden. A branch is not a separate legal entity. A foreign company may only have one branch in Sweden. A branch has no independent capital and its assets and liabilities are a part of the total assets of the foreign company.

Switzerland

Stock corporation

Legal form intended for large-sized companies with high capital requirements, but also popular among smaller companies. The identities of shareholders are not published in the commercial register. Managed by a board of directors, which is elected by the general meeting of shareholders. The articles of incorporation can limit the transferability of a company’s shares.

Taiwan

Company limited by shares

A company limited by shares must carry on profit-seeking business, and is a separate and distinct legal entity whereby its capital is divided into shares. The company must have at least three directors and one supervisor, and is managed by the board of directors and the chairman (also a director), who is elected by the board. A foreign investor must file a foreign investment application (FIA) with the Investment Commission and upon approval incorporate an FIA company in Taiwan. 

Closely-held company limited by shares

On June 15, 2015, a special section on "Closely-Held Company" (CHC) was added to Chapter 5 (Company Limited by Shares) as a result of the amendments to the Company Act. The purpose is to encourage the growth of startups and small and medium enterprises and to accommodate the unique needs of tech startups. The amendments aim to create more autonomy for those small or medium companies and to increase the flexibility in share ownership arrangement and business operations of CHC. 

Limited company

A limited company is owned by members whose respective ownerships are stated in terms of the amount of the members' capital contributions. A foreign investor may file an FIA with the Investment Commission and upon approval incorporate a limited company in Taiwan. A limited company has less corporate formalities than a company limited by shares. For example, a limited company needs to only have one director and does not have a board of directors nor shareholders' meetings.

Branch office of a foreign company

A foreign company may register a branch office to carry on profit-seeking activities in Taiwan.  A branch office is exempt from almost all of the corporate formality requirements of a company limited by shares.

Thailand

Private limited company

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing general affairs of a company. Directors are elected by shareholders of a company.

Public limited company

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing general affairs of a company. Directors are elected by shareholders of a company. Public limited company can be newly incorporated or converted from an existing private limited  company. Usually a purpose of using a public limited company is to obtain investment from public at large, for example, by making a public offering of its shares.

Partnerships

There are three types of partnerships:

  • Unregistered ordinary partnership (all partners are jointly and severally liable)
  • Registered ordinary partnership (a partnership becomes a legal entity, separate and distinct from individual partners; all partners are jointly and severally liable for all obligations of a partnership)
  • Limited partnership (partnership becomes a legal entity, separate and distinct from individual partners; limited partnerships are comprised of two types of partners
    • Partner(s) whose liability is limited to the amount of their capital contribution and
    • Partners who are jointly and unlimitedly liable for all obligations of a partnership)

Turkey

Joint-stock company (JSC)

Capital company with a legal personality. General assembly of shareholders is the highest decision-making body in a JSC. Power to manage business and affairs of a JSC is vested in its board members. Board members act as a corporate body and may have one or more members. Board members are not required to have a share in the company. Board members can transfer their duties and authorities to one or more director or a third party.

Limited liability company (LLC)

Capital company with a legal personality. General assembly of partners is the ultimate decision-making body in LLC. Management rights and duties of LLC are conferred to the managers. At least one partner must have management rights and representation power of an LLC as a manager. It is also possible to appoint third-party individuals, who are not partners of the LLC, as managers.

Other business forms

Branch offices (BO)

BOs may carry out the business their principal company is conducting and freely enjoy the right to pursue commercial activities. A foreign principal company remains liable for all debts of the BO. BOs have autonomous capital and accounting to carry out commercial transactions with third parties, although they are closely associated with the principal company in respect of internal management. This means that rights, debts, profits and losses of the BOs are assumed by the principal company. A BO can only engage in activities of its principal company. Although there is no legal capital requirement for BOs, it is required that the principal company maintains a capital sufficient to run the BO in practice.

Liaison Offices (LO)

LO can only provide "representation" and "relationship management" with respect to the overseas principal company's Turkish customers and suppliers, but it cannot engage in any commercial or trading activity.

United Arab Emirates

The most commonly adopted legal structures in mainland UAE is a limited liability company (LLC) and a branch office (Branch). In addition, it is also possible to establish a representative office (also known as a liaison office) which is a legal structure identical to that of a Branch, however its activities are limited to serving as an administrative and marketing centre for the parent company (Rep Office).

It is also possible to establish an entity in one of the free zones in the UAE.  Entities registered in a free zone can be wholly foreign owned and no UAE participation is required.  The free zone entity can take the form of a free zone limited liability company (FZ-LLC) or a free zone branch office (FZ-Branch).

LLC

Separate and distinct legal entity with limited liability. Requires 51% of the total shareholding to be owned by a UAE national or a company wholly owned by UAE nationals (subject to limited scenarios where all the shareholders are nationals of the Gulf Cooperative Council countries).

Branch

A branch is not regarded as a separate entity but treated as an extension of its parent company. Requires a UAE national or a company wholly owned by UAE nationals to act as the national agent (colloquially known as a "sponsor" and is not to be confused with a commercial agent). The national agent provides licensing and other governmental services for the Branch for a fixed fee to be paid at the date of the licence issuance, but would not have any rights or entitlements to the Entity's business.

FZ-LLC

Separate and distinct legal entity with limited liability. No restriction on the nationality of shareholders. Activities restricted to the free zone in which the company is incorporated and those the company is licensed to carry out.

FZ-Branch

A branch is not regarded as a separate entity but treated as an extension of its parent company. No requirement to appoint a national agent as in the case of a Branch.

United Kingdom

Private limited company

Separate and distinct legal entity. Managed by directors who are responsible for making major decisions and overseeing the general affairs of the company. Subject to the articles of the company, the shareholders and the board of directors generally have the power to appoint and remove directors.

Registered UK establishment

A registered UK establishment is a UK registration of an overseas company. It has no separate legal personality to the overseas company. The overseas company continues to be managed by the directors and shareholders of the overseas company.

A number of responses in this checklist are "not applicable" on the basis that the UK establishment is merely a registration of an overseas company and therefore any rules, regulations are other requirements are primarily governed by the laws of the country of incorporation.

United States

C corporation

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the stockholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors.

S corporation

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. Directors are elected by the stockholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors.

Limited liability company (LLC)

Separate and distinct legal entity. Managed by either the members of the LLC or a manager appointed by the members. Members of the LLC have flexibility in structuring the company, including the ability to divide ownership and voting rights in multiple ways.

Vietnam

Vietnamese corporate laws introduce 5 entity types. However, only the first 3 types (ie, JSC, 2M-LLC and 1M-LLC) have their own legal status. 1M-LLC is the most popular and widely used type by foreign investors when they intend to set up a legal entity in Vietnam. The other 2 types (ie, Partnership and Private Enterprise) are more suitable for local investors. If we compare the legal framework of these 2 types with the legal framework of the first 3 types (ie, JSC, 2M-LLC and 1M-LLC), just a few provisions on their incorporation, organization and operations can be found under Vietnamese corporate laws. In addition, the form of Partnership may only be designed and appropriate for a very limited number of specific professional businesses, such as legal, auditing, etc. Therefore, we will only cover the first 3 entity types (ie, JSC, 2M-LLC and 1M-LLC).

Joint stock company (JSC)

  • At least 3 shareholders and no restriction to the maximum number
  • Generally no personal liability of shareholders as it is limited to their ownership in a JSC
  • Earnings of a company are subject to corporate income tax and shareholders (only individuals) are taxed on any distributed dividends
  • Typical corporate documents generally include charter (or articles of incorporation), organizational resolutions of General Shareholder Meeting (GSM) and Board of Directors (BOD), shareholder registration books and share certificates
  • GSM makes decisions on the most important affairs of the JSC, BOD has overall responsibility to implement GSM's decisions, General Director (or CEO) has day-to-day management responsibilities
  • Shareholders typically purchase shares in the JSC, either common or preferred
  • It is required to file tax returns annually with local tax authorities

Multi-member limited liability company (2M-LLC)

  • Must be at least 2 members and no more than 50, can be both individual and legal entities
  • Generally no personal liability of members, as it is limited to their ownership in a 2M-LLC
  • Earnings of a company are subject to corporate income tax and members (only individuals) are taxed on any distributed profits
  • Typical corporate documents generally include:
    • Charter (or articles of incorporation)
    • Organizational resolutions of Members' Council (MC)
    • Member registration books and
    • Capital contribution certificates
  • MC makes decisions on the most important affairs of the 2M-LLC and has overall management responsibility; General Director (or CEO) has day-to-day management responsibilities
  • Members contribute capital to the charter capital of 2M-LLC
  • It is required to file tax returns annually with local tax authorities

Single-limited liability company (IM-LLC)

  • Only one member is required, either an individual or a legal entity
  • Generally no personal liability of a member, as it is limited to member's ownership in a 1M-LLC
  • Company's earnings are subject to corporate income tax, but the sole member (either a corporate or an individual) is not taxed on any distributed profits
  • Typical corporate documents generally include:
    • Charter (or articles of incorporation) and
    • Secisions of the sole member, which may be made directly by a member or indirectly through either MC or company president
  • Either MC or company president has overall management responsibility; General Director (or CEO) has day-to-day management responsibility
  • Member contributes capital to the charter capital of 1M-LLC
  • It is required to file tax returns annually with local tax authorities

Partnership

  • At least 2 unlimited liability partners (only individuals) and no restriction to the maximum number; no restriction to the minimum and maximum number of limited liability partners
  • Generally, no personal liability of limited  partners, but unlimited partners can be liable
  • Earnings of a partnership are subject to corporate income tax and partners (only individuals) are taxed on any distributed profits
  • Typical corporate documents generally  include charter (or articles of incorporation), decisions of the Partners' Council and capital contribution certificates
  • Partners' Council has overall management responsibilities; unlimited liability partners have day-to-day management responsibilities
  • Partners contribute capital to the charter capital of a Partnership
  • It is required to file tax returns annually with local tax authorities

Private enterprise

  • Only a sole individual owner
  • Generally an owner has personal liability
  • Earnings of an enterprise are subject to corporate income tax, but the sole individual owner is not taxed on any distributed profits
  • Typical corporate documents generally include internal rules issued by the owner
  • Owner has overall and day-to-day management responsibilities
  • Owner contributes capital to investment capital of a private enterprise
  • It is required to file tax returns annually with local tax authorities