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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 1 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 1 or more shareholders. Managed by a board of directors who are elected by the stockholders. 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 fifty. 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)

    • 2 or more shareholders
    • The local management is in charge of a board of directors, which may have at least 1 member with no maximum number (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between 1 and 3 years in office, as provided in the bylaws. They may be re-elected. The majority of the board of directors must be composed of Argentine residents.
    • The president of the board is the legal representative of the company
    • Statutory auditor is optional. Mandatory if capital stock exceeds ARS50 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 percent must be paid up front, and the balance is paid within 2 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 1 shareholder
    • The local management is in charge of a board of directors, which may have at least 1 member with no maximum number (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between 1 and 3 years in office, as provided in the bylaws. They may be re-elected. The majority of the board of directors must be composed of Argentine residents
    • The president of the board is the legal representative of the company
    • Permanent control by government
    • Statutory auditor is mandatory (at least 1 regular and 1 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)

    • 1 or more shareholders
    • The managers must be individuals, who may be appointed for an indefinite period. At least 1 director must be an Argentinean resident (provided that the Argentinian resident director is the legal representative of the company)
    • Statutory auditor is optional
    • 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 percent needs to be paid up front, and the balance is paid within 2 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)

    • 2 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 majority of the board of managers must be composed of Argentine residents
    • The legal representative of the company may 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 ARS50 million (at least 1 regular and 1 alternate member)
    • Typical charter document: bylaws
    • Corporate books: manager and quotaholders’ meeting minutes.
    • Should cash be paid out as consideration for the stock: only 25 percent must be paid up front, and the balance is paid within 2 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 ARS100,000.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Minimum capital of SAU is ARS100,000.

    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 January 2023: ARS 95,700).

    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 may 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 may 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, the board's liability depends on the individual performance of each manager.

  • Tax presence

    Sociedad Anónima (Corporation) and SRL (LLC)

    An SA, 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 SA 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. An "urgent" registration process may be followed to obtain the company's registration and its tax ID within 20 business days, 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. An "urgent" registration process may be followed to obtain the company's registration and its tax ID within 20 business days, 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 20 business days 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 20 business days, 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)

    This corporate type was introduced in Argentina in August 2016 pursuant the Argentine Civil and Commercial Code modification and is beginning to be used. Well regarded and widely used.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    This corporate type aims to be a more agile and economic alternative, both in its incorporation and in administration and management. Its incorporation and development are required to be entirely in digital form. However, some provinces or jurisdictions have restored the use of digital corporate documents for this type of company.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

  • Shareholder meeting requirements

    Corporation (Sociedad Anónima or SA)

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

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Required to hold an 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)

    Periodical meetings of the board are not required.

    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 (ie, 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 (ie, 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, as well as annual digital filings (ie. Financial statements of the Company before the Public Registry and the Tax Authority). Every appointment or resignation of directors, change 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 ARS50 million shall file their annual financial statements with the Public Registry. However, all SRLs must file their financial 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 1, the SAU must convert to an SA or SAS.

    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-shareholder corporations must pay annual fee to the Public Registry.

  • Director / officer requirements

    Not applicable for this jurisdiction.

    For more information on directors’ duties, see our Global Guide to Directors’ Duties.
  • 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 may 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 must be Argentinean residents.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Majority of the members of the board must be Argentinean residents.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least 1 director must be Argentinean resident (provided that the Argentinean resident director is the legal representative of the company).

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Majority of the members of the board must be Argentinean residents.

  • 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)

    • 2 or more shareholders
    • Board of directors, which must have at least 1 member with no maximum number requirement (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million)

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • 1 shareholder
    • Board of directors, which must have at least 1 member with no maximum number requirement (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million)

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    • 2 or more members (within a maximum of 50 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 1 shareholder is admitted.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least 1 shareholder.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    At least 1 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 may 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 percent of the voting shares, unless the articles provide for a higher quorum. If quorum is not reached, the meeting may be held at a second call. In this case, the meeting is duly constituted with the presence of shareholders representing 30 percent 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 1 shareholder of the company is present.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    Meetings may be held physically or through digital means (ie, 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, the meeting may 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 percent of voting shares, unless articles provide for a higher quorum. If quorum is not reached, a meeting may be held at a second call. In this case, the meeting is duly constituted with the presence of members representing 30 percent 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 must 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 may 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 the 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 the 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 the 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 the 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
    Martin Mittelman
    Martin Mittelman
    Partner DLA Piper (Argentina) [email protected] T +5411 41145500 View bio
    Antonio Arias
    Antonio Arias
    Partner DLA Piper (Argentina) [email protected] T +5411 4114 5500 View bio

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 1 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 1 or more shareholders. Managed by a board of directors who are elected by the stockholders. 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 fifty. 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 may 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).

Proprietary company

A proprietary company is a limited liability company designed for 50 shareholders or fewer. 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. It is managed by a board of directors, which is responsible for making business decisions and overseeing the general affairs of the company. Directors may be appointed by other directors or by shareholders and may 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 1 or more general partners who have unlimited joint and several liability for all debts of the partnership, and 1 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 1 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 at least 3 individuals and is responsible for the supervision of the management board.

Bahrain

If entities wish to conduct business in Bahrain, they must establish a presence in the country. The most commonly adopted legal structures in Bahrain are with limited liability companies (WLL), closed shareholding companies (BSC(c)) and foreign branches (branch).

With Limited Liability (WLL)

A WLL in Bahrain is a private company with one or more shareholders; each of them shall only be liable to the extent of their respective shareholding in the company. A WLL can be owned by a single natural or legal person. WLLs can neither engage in banking and insurance activities nor can they issue any shares, negotiable warrants or debentures to the public.

Closed Shareholding Company (BSC(c))

A BSC(c) is a company that consists of at least 2 shareholders who underwrite negotiable shares among themselves without underwriting such shares to the public. The shares of a BSC(c) cannot be offered to the public. Unlike a WLL, a BSC(c) is allowed to carry out banking and insurance activities.

 

Foreign Branch (Branch)

A foreign company that is incorporated abroad may establish a branch office in Bahrain if it provides a guarantee letter from the parent company to take full responsibility of the branch.

Belgium

Public limited company (société anonyme/naamloze vennootschap)

Separate and distinct legal entity. There are 2 types of board structures that may be chosen (ie, monistic board structure or dualistic board structure).

In the event the monistic board structure is chosen, the public limited company may be managed by either:

  • A collegial board of at least 3 directors, or 2 directors in case there are less than 3 shareholders,
  • or if provided by the articles of association, a sole director.

The collegial board is responsible for making major business decisions and overseeing the general affairs of the company. Managing directors (or general managers), who run the day-to-day operations of the company, are appointed by the directors. The sole director must be a public limited company with a collegial board when:

  • The public limited company with a sole director is listed or
  • When a legal provision requires a collegial board.

The dualistic board structure must be provided for in the articles of association and consists of a board of supervision and an executive board. The board of supervision is a collegial board of at least 3 members and is elected by the shareholders of the company. Members of the board of supervision cannot at the same time be members of the executive board. The board of supervision is responsible for the general policy and strategy of the public limited company and has reserved competences. The executive board is a collegial board of at least 3 members. Members of the executive board are appointed by the members of the board of supervision. The executive board has full management competence except for the ones reserved by the law for the shareholders' meeting and the ones reserved for the board of supervision.

Limited company (société à responsabilité limitée/besloten vennootschap)

Separate and distinct legal entity. Managed by either a sole director, a non-collegial board of directors or a collegial board of directors (if provided in the articles of association), who are responsible for making major business decisions and overseeing the general affairs of the limited company. Directors are elected by the shareholders of the limited company. The management body may appoint 1 or more persons who can act alone, jointly or collegially, and who are responsible for the daily management. If no daily management is appointed by the management body, the day-to-day operations of the company are run by the director(s), who has/have, in principle, full authority.

Often used by USA companies for tax reasons since it qualifies as check-the-box in the USA. Steps to be taken to ensure that the old IRS taxpayer identification number is made available to the new entity.

Belgian branch office of a foreign company

No separate and distinct legal entity from the foreign company. The legal representative must represent the foreign company with regard to 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 as very few formalities are required for its organization and management.

The Sociedade Limitada is managed by the officers/managers, who run the day-to-day operations of the corporation, and may also have a board of directors, which, if appointed, will be responsible for making major business decisions and overseeing the general affairs of the company. The officers must be individuals appointed by the board of directors or by the quotaholders’ meeting, in case the company does not have a board of directors, whilst the directors are elected by the company’s quotaholders. The management structure of a Sociedade Limitada is established in the company’s articles of association.

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.

The Sociedade Anônima is managed by the officers, who run the day-to-day operations of the corporation, and, in certain cases, by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the corporation. The officers must be individuals appointed by the board of directors or by the shareholders’ meeting, in case the corporation does not have a board of directors, whilst the directors are elected by the corporation’s shareholders. The management structure of a Sociedade Anônima is established in the corporation’s bylaws and certain corporations, such as the publicly held corporations, shall, mandatorily appoint a board of directors.

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/territorially – for example, under the Business Corporations Act (Ontario). It is 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: Additional forms of entity structures also exist and could be useful in some instances but are not covered in this guide either because they are less commonly used types of entity structures or not as likely to be relevant to the reader.

Chile

The most common types of business organizations operating in Chile are (i) sociedades de responsabilidad limitada (SRL), or limited liability companies/partnerships; (ii) sociedades anónimas (SA), or stock corporations or corporations; (iii) sociedades por acciones (SPA), or simplified corporations; and (iv) branches of foreign entities.

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

This type of company is mainly regulated by Law No. 3.918 but also by rules applicable to general partnerships and by certain rules contained in the Commerce and Civil Codes. The liability of the members of an SRL is limited to the amount of their contributions or to the higher amount established in the bylaws. Equity rights can only be transferred with the unanimous approval of the partners. There is great flexibility as to the rules that may be included in the bylaws.

The SRL is managed as established in the bylaws. If the bylaws do not state who manages the company, management corresponds to partners, by themselves or by representatives. If a manager is not appointed, all partners may administrate the company. Bylaws may establish different management options, such as appointing certain partner or partners, third parties or even a board of directors.

Corporation (Sociedad Anónima or S.A.)

This type of company is mainly regulated by Law No. 18,046 (the Corporations Act) as well as by the Corporations Regulations (Reglamento de Sociedades Anónimas).

A corporation may be open (public), closed (private) or special. Open corporations are those that register, voluntarily or by legal obligation, their shares in the Securities Registry and are under control of the Financial Market Commission (Comisión para el Mercado Financiero or CMF). Special corporations are expressly established by law (eg, banks and insurance companies). Closed corporations are those that do not qualify as open or special.

Its share capital is divided into shares, which may be transferred without limitation, except for certain exceptions such as those contained in shareholders’ agreements. In private corporations, bylaws may establish certain restrictions, but in public corporations, this is not allowed. The liability of shareholders is limited to the amount of their capital contributions.

Managed by a board of directors appointed by the shareholders. The board is responsible for administration and representation of the company and is entitled to delegate part of its powers to the CEO and other officers. A director's term of appointment, which is set forth in the bylaws, cannot exceed 3 years. Directors may also be re-elected indefinitely.

Simplified Corporation (Sociedades por Acciones or SpA)

Simplified corporations are regulated by special rules contained in the Commerce Code. They are also ruled by their bylaws and by the private corporations’ rules in a suppletory manner. Unlike corporations, SpAs may be incorporated and operate with only 1 shareholder. The capital is divided into shares.

Legal regulation for simplified corporations is more flexible than that of corporations as it allows special agreements regarding, for example, management, profit distributions, share ownership, multiple votes and restrictions to voting rights.

Management is flexible. Bylaws may establish different management options, such as appointing certain shareholder or shareholders, third parties or a board of directors.

It is customary for simplified corporations to be managed by an administrator – usually the shareholder – who may act personally and/or through 1 or more agents and/or managers.

Branch of a Foreign Legal Entity (Agencia)

A branch acts as an alternative form of entity as it corresponds to the presence of a foreign company (ie, parent) in Chile that does not seek to incorporate a new company, but instead only establishes a branch of the existing company. It is not a separate legal entity, except for in the case of certain tax purposes. The parent company is ruled by its local laws. The Commerce Code and the Corporations Act have certain special rules about the establishment and amendments of the branch for foreign companies and for-profit entities and corporations, respectively.

It is managed by an agent appointed by the parent. The parent grants the agent extensive power to act on its behalf in Chile. This power shall expressly mention that the agent acts in Chile under direct responsibility of the parent.

China

Independent legal entity. In terms of companies set up by or with foreign investors, they need to follow the general company law (and partnership law as applicable) pursuant to the new Foreign Investment Law which took effect from January 1, 2020. Therefore, depending on the foreign shareholding ratio in a limited liability company (LLC) or a company limited by shares as discussed below, it would still work to make reference to a wholly foreign owned enterprise (WFOE) or a Sino-foreign joint venture enterprise in an economic sense.  However, a WFOE or JV, including  an equity joint venture (EJV) or contractual joint venture (CJV), would no longer exist as a legal form.  All foreign invested enterprises (FIEs) in China will take the legal form of either a company (LLC or company listed by shares) or a partnership.

Limited liability company (LLC)

  • Managed by board of directors or a single executive director (usually adopted by LLCs with a limited number of shareholders and relatively small size of operation), responsible for making major business decisions and overseeing general operations of an LLC.
  • The highest authority of an LLC is the shareholders’ meeting.
  • 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.
  • The highest authority of a company listed by shares is the shareholders’ assembly.
  • Director is appointed/elected by shareholders of a company.
  • Senior management officers run the day-to-day operations of a company limited by shares, as led by a general manger who usually is appointed by the board of directors

Partnership enterprise

  • NOT a separate legal person 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 5 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 2 partners is 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 2 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 company 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 2 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 5 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. Colombian law has opened the possibility that, beginning on June 4, 2020 and up to June 3, 2022 simplified stock companies that issue debt securities, which are offered to accredited investors (segundo mercado), can register them in the National Registry of Securities and Issuers (Registro Nacional de Valores y Emisores) and trade them in the Colombian stock exchange.

Czech Republic

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

A company in which at least 2 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 (may be inherited or may pass to a successor in title if permitted by the memorandum of association).

Limited partnership (komanditní společnost, k.s.)

A company with 1 or more partners who are liable for the debts of the company to the full extent of their assets (unlimited partners), and 1 or more partners who 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 1 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 jointly and severally liable for the debts of a company up to the amount of the sum 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 2-tier with a board of directors (představenstvo) and supervisory board (dozorčí rada) or single-tier with an 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

Limited liability company (Kapitalselskab)

There are 3 types of limited companies: public limited companies, private limited companies and limited partnership companies. They are all separate and distinct legal entities. A limited liability 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. In general, 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 the public.
  • The name of a JSC must derive from its purpose and may include the name(s) of any of its shareholders.
  • Generally, there are no restrictions on foreign ownership, and the JSC may be wholly owned by foreigners, except for companies operating in Sinai (see below) and companies engaging in activities that are restricted by law for foreigners to participate in, such as:
    • Commercial agency, which requires the company to be wholly owned by Egyptians or persons who have acquired and held Egyptian nationality for at least 10 years
    • Importation activities for trading purposes, which requires that 51 percent of the shareholders must be Egyptians and
    • Acquiring land and/or real estate in Sinaix, which requires that the company be wholly owned by Egyptians.
  • A company operating in Sinai must be established in the form of a JSC; 55 percent of its shareholders must be Egyptians and it is subject to certain approval requirements. However, the foreign ownership restriction (ie, the requirement that 55 percent of the shareholders be Egyptians) may be waived for companies which conduct implementation of integrated development projects in Sinai, provided that the company has obtained a presidential decree, the required cabinet approval and any required approval of the competent local authorities.
  • Managed through a minimum of 3 board members appointed by the general assembly. The board of directors (BoD) is responsible for the company's management and performing the required activities to achieve its purpose. It may delegate powers to 1 or more of its members in order to:
    • Perform certain act(s) and oversee certain aspects of the company
    • Exercise some of the BoD's powers and competencies and
    • Undertake the actual management of the company.
  • All foreign BoD members must pass a security clearance, but the company can generally be incorporated and conduct business even before such security clearance has been obtained provided that it has submitted a completed application that is pending approval. However, and by way of exception, board members of certain foreign nationalities (routinely subject to change) require the security clearance to be issued prior to starting the entity's business.
  • Foreign employees cannot exceed 10 percent of all employees of the JSC.

Limited Liability Company (LLC)

  • A separate legal entity that is a private company and its quotas cannot be listed or traded on any stock exchange
  • An LLC may not issue bonds or other financial debentures that are offered to the public
  • Quotaholders appoint 1 or more managers to manage the LLC. The manager(s) may act individually or jointly in accordance with the terms of the LLC's articles of incorporation (AoI). Juridical persons can be appointed as a manager of an LLC

One-Person Company (OPC)

  • Newly introduced to the Egyptian market (Law No. 4 of 2018 amending the Companies Law).
  • Formed by a sole founder, who can be either a natural or a juridical person.
  • An OPC's equity cannot be listed or traded on any stock exchange.
  • An OPC cannot issue bonds or other financial debentures that are offered to the public.
  • Similarly to a JSC and LLC, there are generally no restrictions on foreign ownership except for activities that foreigners are prohibited from participating in (eg, commercial agency, importation activities for trading purposes and acquiring land and/or real estate in Sinai).
  • Managed through the founder (ie, sole proprietor) of the company or 1 or more appointed manager(s).
  • Companies Law states that the rules governing the LLC are applicable to an OPC, unless otherwise provided.
JSC, LLC and OPC collectively to be called "corporate entities" or "corporations" in some provisions in this guide.
Corporate entities are subject to the Companies Law. The Companies Law regulates, inter alia, the operations of the company's corporate bodies such as the board of directors/managers, the general assembly and the matters related to the management and control of the company.
Further, depending on the type of the undertaken activities, Corporate entities may be established under the Investment Law No. 72 of 2017 and Executive Regulations in accordance with the Prime Minister's Resolution No. 2310 of 2017 (the Investment Law). In such case, the Companies Law would apply to the extent that the Investment Law is silent to a certain matter. 
There are other entity types in Egypt but the ones listed above are the most commonly used.

Branch of a Foreign Corporation (Branch)

  • Not a separate legal entity.
  • Foreign corporations can conduct business in Egypt via a local branch.
  • A foreign-based company (ie, parent company) can establish a branch in Egypt by registering with the 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.
  • 1 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 a foreign-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 in any commercial activities or execute agreements with third parties on behalf of a foreign company.

1 Companies Law no.159 of /1981 and its Executive Regulations No. 96 of 1982 as amended (the "Companies Law").

Finland

Limited Liability Company (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)

The SAS is an increasingly used type of company, mainly because of its great flexibility and low capital requirements. The 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; the president is the only compulsory corporate body
  • There is greater freedom for organizing the management and operating structures of an SAS and
  • The 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. 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 the company, share of profits and participation in collective decisions).

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

Société anonyme (SA)

The 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 and
  • 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 (provided that the subsidiary is not incorporated under the form of a partnership, ie, SNC or civil company) 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.

Note: Additional forms of entity structures also exist and could be useful in some instances but are not covered in this guide either because they are less commonly used types of entity structures or not as likely to be relevant to the reader.

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 pursuit of the company's business activities in general.

Directors are elected by the general meeting of 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. Shareholder (partner) liability is limited solely to the assets of the company. 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. Shareholder (partner) liability is limited solely to the assets of the company. 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, SAR

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.

Note: Additional forms of entity structures also exist and could be useful in some instances but are not covered in this guide either because they are less commonly used types of entity structures or they are not as likely to be relevant to the reader.

Hungary

Private company limited by shares (Zrt.)

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

A 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 shares may be issued either as printed shares or dematerialized (i.e. e-shares registered on a securities/investment account).

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 the Zrt. Shareholders may also decide to appoint a single director instead of a board to perform the duties of the board of directors (references to “board of directors” throughout this guide should be interpreted accordingly).

Directors are elected by shareholders of a Zrt. Company managers (who must be employees of the company) may also be appointed by shareholders to assist the directors in day-to-day operations.

Limited liability company (Kft.)

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

A 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). It is rather an abstract membership interest called business quota (üzletrész). A business quota may be split into several smaller business quotas, and a quotaholder can own more than one business quota (each of which can be transferred or encumbered separately). Liability of the quotaholders is limited to their capital contributions.

Managed by managing directors appointed by quotaholders. Shareholders may also decide to set up a board of directors instead of appointing one or more individual managing directors (references to “managing directors” throughout this guide should be interpreted accordingly). Company managers (who must be employees of the company) 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.). However, 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 company, subject to the Articles of Association of the company, and within the provisions of the Companies Act, 2013. Directors are elected by the shareholders of the company.

Indonesia

Limited liability company

A separate and distinct legal entity, managed by the 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 the board of commissioners are appointed and dismissed by the general meeting of shareholders.

Ireland

The information in this guide provides a summary of 2 corporate structures that are commonly used in Ireland.  Other alternatives, such as a designated activity company (DAC), a private unlimited company (ULC), a company limited by guarantee (CLG) or a public limited company (PLC), could be useful in some instances but are less common.

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, the shareholders have the power to appoint and remove directors. A LTD cannot offer shares to the public, and the right to transfer shares is generally restricted by the company’s constitution. Shareholders have limited liability protection.

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 requirement to register a branch generally arises where the Irish operations of the foreign company has:

  • A physical place of business
  • The appearance of permanency
  • A person to manage the place of business and
  • 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 or
  • A board of directors, composed by 2 or more members or
  • Two or more directors acting jointly or severally

Directors can also be quota-holders. Directors are elected by the quota-holders 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 1 representative in Japan.

Kabushiki-Kaisha (KK)

A KK is a 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 (collège de gérance) – who may or may not be shareholders - responsible for making major business decisions and overseeing the general affairs of the company. Managers are elected by the shareholders for a limited or unlimited term and represent the company acting alone, or as set out in the articles of incorporation/association, if more than one manager has been appointed.

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

Separate and distinct legal personality. An SA may be organized as a 1-tier company (ie, managed by a sole director or a board of directors composed of at least 3 directors) or 2-tier company (ie, an executive board (directoire) and a supervisory board (conseil de surveillance). Directors are elected by the shareholders and represent the company acting alone or as set out in the articles of incorporation/association, if more than one director has been appointed.

Special limited partnership (Société en commandite spéciale or SCSp)

Largely inspired by the Anglo-Saxon limited partnership regimes, the special limited partnership 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 – a limited partnership agreement – for a limited or unlimited duration, between 1 or more general partner(s) (associés commandités) jointly and severally liable for the partnership's commitments and 1 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 may 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 2 types of business entities:

  • The unincorporated entity and
  • The incorporated separate legal entity.

The unincorporated entities are:

  • Sole proprietorship and
  • Partnership.

A sole proprietorship is an entity with 1 person, whereas a partnership is a business entity that is owned by at least 2 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 and
  • 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.

Mauritius

There are different types of entities to conduct business in or from Mauritius and the most common types are:

  • Company limited by shares
  • Company limited by guarantee
  • Company limited by shares and by guarantee
  • Unlimited company
  • Foreign company
  • Limited life company (constitutionally limited life not exceeding 50 years)
  • Global Business corporation
  • Authorized company
  • Protected cell company
  • Société
  • Trust
  • Foundations
  • Limited liability partnerships and

  • Variable capital company

Companies are categorized between private companies and public companies.

The most common type of company is the private company limited by shares which is governed by the Companies Act 2001 of Mauritius (the Companies Act).

Global Business Corporations, Authorized Companies and Protected Cell Companies are also governed by the Companies Act.

Any entity which proposes to conduct business outside of Mauritius must apply for a license (Global Business Corporation License or Authorized Company License) from the Financial Services Commission of Mauritius (FSC).

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. A branch office 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 1-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. It is also possible to create a so-called 1-tier board, consisting of executive and non-executive directors.

C.V. (a limited partnership)

A CV is not a legal entity under Dutch law. It is a partnership agreement between 1 or more general partners and 1 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.

New Zealand

Limited liability companies

Limited liability companies incorporated in accordance with the Companies Act 1993 (Companies Act) are the most common corporate structure used in New Zealand. Limited liability companies generally limit the liability of shareholders, except: 1) to the extent of any amount unpaid on a share held by a shareholder, 2) as provided for under that company's constitution and 3) for other specific exceptions as set out in the Companies Act. The board of directors (Board) generally manages and supervises the conduct of business and the general affairs of companies (which, subject to certain limitations, may be delegated to a committee). Directors are generally appointed by way of ordinary resolution   of a company's shareholders but can also be appointed by the Board, where the constitution or other governing document (as may be applicable) expressly provides a power of appointment.

Limited liability companies with 50 or more shareholders (and 50 or more share parcels) and assets of at least NZD30 million (including the assets of their respective subsidiaries) or revenue of at least NZD15 million (including the revenue of their subsidiaries) are “code companies” for the purposes of the Takeover Regulations 2000 and the Takeovers Code. Code companies are subject to the provisions of the Takeovers Code and are subject to strict requirements when shareholders (including their respective associates) hold 20 percent or more of the shares on issue and that shareholder wishes to increase its shareholding in the code company.

Limited liability companies that wish to list on a licensed market operated by NZX Limited, including the NZX, will be subject to the relevant listing rules and other legislative requirements (including the Companies Act and the NZX listing rules) and will also be considered code companies under the Takeovers Code. There is no limit on public companies’ ability to raise funds from the public (either through an initial public offer – or IPO – or through a post-listing capital raise or rights issue), provided that the various disclosure requirements and other statutory rules are complied with, including those set out in the Financial Markets Conduct Act 2013 (FMCA).

Branch

Overseas companies “carrying on business” in New Zealand must register as a branch of an overseas company with the New Zealand Companies Office (Companies Office). The Companies Office is a government agency in New Zealand that provides business registry services in relation to corporate entities, personal property and capital market securities. The term “carrying on business” is not comprehensively defined under New Zealand law, although it generally captures businesses that have employees in New Zealand, have an office or business premises in New Zealand or that regularly transact business in New Zealand. For this reason, it is advisable that foreign companies seek professional advice before commencing business in New Zealand to ensure compliance with New Zealand law.

Note: In addition to the above, there are other forms of legal entity that can be established under New Zealand law, including a general partnership, limited partnership and trust. However, these are less commonly used in New Zealand for business purposes and are not considered further.

Nigeria

The vehicles through which a business may be set up and conducted in Nigeria are as follows:

  • Company limited by shares (private/public company)

  • Unlimited company (private/public)

  • Company limited by guarantee

  • Limited liability partnership

  • Limited partnership

  • Business names incorporated

  • Trustees

Norway

Private limited liability companies (private LLCs)

Separate and distinct legal entity managed by a board of directors, which is responsible for making major business decisions. The board of directors also has a supervisory function in relation to the company's activities and the executive managers of the company. Directors are elected by the shareholders of the company. Employees may have right to appoint a minority of the board members if the number of employees exceed certain thresholds. The day-to-day operations of the company are usually carried out by the general manager, who is appointed by the board of directors. However, private LLCs are not obligated to have a general manager. If no general manager is appointed, the chairman of the board of directors is responsible for the day-to-day management. The shareholders of the company constitute the general meeting, which is the superior body of the company.

Public limited liability companies (public LLCs)

Separate and distinct legal entity. Governmental structure of public LLCs is unitary with private LLCs. Public LLCs must have a general manager which is responsible for the day-to-day management of the company. The general manager is appointed by the board of directors. Only public LLCs or other similar foreign companies can be listed on a regulated market.

Partnerships with unlimited liability

Separate and distinct legal entity managed by the partnership meeting. Partnership meeting can appoint a board of directors and a general manager to manage the company and handle the day-to-day responsibilities.

Peru

The most common types of business organizations operating in Peru are (i) sociedades anónimas (S.A.), or stock corporations or corporations; (ii) sociedades de responsabilidad limitada (S.R.L.), or limited liability companies/partnerships; and, (iii) branches of foreign entities.

Corporation (Sociedad Anónima or S.A.)

This type of company is mainly regulated by Law No. 26887 (the Corporations Act), as well as by the Corporations’ Registry Regulations (Reglamento del Registro de Sociedades).

A corporation may be open (public), in which case it would be a sociedad anónima abierta (S.A.A.) or private, in which case it could be: (i) a closed stock corporation or sociedad anónima cerrada (S.A.C.); or, (ii) a regular corporation or sociedad anónima (S.A.).

Open corporations are those that register, voluntarily or by legal obligation, their shares in the Public Registry of the Securities Market of the Superintendency of the Securities Market (Registro Público del Mercado de Valores de la Superintendencia del Mercado de Valores) and are under control of such Superintendency. Closed stock corporations are those incorporated as such and may not have more than 20 shareholders. Finally, corporations are those that do not qualify as open or closed.

A corporation share capital is divided into shares. In case of open corporations, the shares may be transferred without limitation. Restrictions to shares’ transfers regulated in their bylaws or in shareholders’ agreements are not enforceable. On the contrary, a right of first refusal applies to closed stock corporations, unless otherwise provided in their bylaws. In case of regular corporations, the shares may be transferred without limitation, except if certain restrictions are established in their bylaws or in shareholders’ agreements.

The liability of shareholders is limited to the amount of their contributions to capital.

Corporations (except for some closed stock corporations) are managed by a board of directors, formed by -at least- 3 members, appointed by the shareholders. The board is responsible for the administration and representation of the company and is entitled to delegate part of its powers to the CEO and other officers. A director's term of appointment, which is set forth in the bylaws, cannot be less than 1 year and shall not exceed 3 years. Directors may also be re-elected indefinitely.

If the shareholders of a closed stock corporation decide so, such entity could refrain from having a board of directors, in which case it would be managed by a CEO.

Limited Liability Company (Sociedad de Responsabilidad Limitada or S.R.L.)

This type of company is mainly regulated by Law No. 26887 (the Corporations Act), as well as by the Corporations’ Registry Regulations (Reglamento del Registro de Sociedades). The liability of the members of a S.R.L. is limited to the amount of their contributions. A right of first refusal shall always be applicable and equity rights may only be transferred by virtue of a public deed that shall be recorded before the Public Registry of the domicile of the corresponding entity. There is great flexibility as to the rules that may be included in the bylaws.

The management of a S.R.L. is entrusted to one or more managers (whether partners or not), who shall represent it in all matters relating to its company purpose. The managers are prohibited to engage (for their own account or for the account of others) in the same type of business that corresponds to the company purpose.

Branch of a Foreign Legal Entity (Sucursal)

A branch acts as an alternative form of entity, as it corresponds to the presence of a foreign company (the parent company) iin Peru that does not seek to incorporate a new company, but instead only establishes a branch of the existing company. It is not a separate legal entity, except for tax purposes. The parent company is ruled by its local laws, but shall comply with the applicable Peruvian legislation regarding the obligations undertaken by the branch in Peru. The Corporations Act contains certain special rules regarding the establishment (and amendments) of a branch by foreign companies.

A branch is managed by a permanent legal representative appointed by the parent company.

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 the stockholders themselves. Officers are elected by the directors, and they perform the duties imposed on them by law and the bylaws 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 their 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.

One Person Corporation

The Revised Corporation Code (RCC) introduced the new concept of a One Person Corporation (OPC), which is defined as “a corporation with a single stockholder.” This corporation may only be formed by a natural person, trust or an estate. Banks and quasi-banks, preneed, trust, insurance, public and publicly listed companies, and non-chartered government-owned and -controlled corporations are not allowed to incorporate as OPCs. Further, a natural person who is licensed to exercise a profession is also generally not allowed to organize as OPC for the purpose of exercising such profession, except as otherwise provided under special laws. Similar to ordinary corporations, an OPC has no minimum capital stock requirement. Unlike an ordinary corporation, however, an OPC is not required to submit corporate bylaws.

The single stockholder serves as the sole director and president of the OPC. The OPC is required to appoint a treasurer, corporate secretary and other officers as necessary within 15 days from the issuance of its certificate of incorporation. However, the single stockholder is proscribed from being appointed as the corporate secretary.

The single stockholder is required to designate a nominee and an alternate nominee who shall take their place as director in the event of their death or incapacity. The extent and limitations of the authority of the nominee and alternate nominee shall be stated in the articles of incorporation. The nominee and alternate nominee may be changed at any time and without need of amendment of the articles of incorporation.

In case of death or permanent incapacity, the nominee shall sit as director only until the legal heirs of the single stockholder have been lawfully determined, and the heirs have designated 1 of them or have agreed that the estate shall be the single stockholder.

In lieu of meetings, a written resolution signed and dated by the single stockholder and recorded in the minutes book shall be sufficient when action is needed on any matter. Aside from the minutes book, the OPC shall also be required to submit reportorial requirements. Failure to submit such requirements 3 times within a period of 5 years may place the OPC under delinquent status. The reportorial requirements are as follows:

  • Annual financial statements
  • A report containing explanations or comments by the president on every qualification, reservation or adverse remark or disclaimer made by the auditor in the latter’s report
  • A disclosure of all self-dealings and related party transactions and
  • Other reports required by the SEC.

The RCC allows the conversion from an ordinary corporation to an OPC and from an OPC to an ordinary stock corporation. An ordinary stock corporation may be converted to an OPC when the single stockholder acquires all the stocks of an ordinary stock corporation and files an application for conversion with the SEC. An OPC may be converted into an ordinary stock corporation after due notice to the SEC of such fact and of the circumstances leading to the conversion. One such circumstance provided by the law is the death of the single stockholder. In such a case, the legal heirs may decide to either wind up and dissolve the OPC or convert it into an ordinary stock corporation.

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 (limited liability companies and joint-stock companies, in the future also simplified 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

Portuguese law provides for various types of companies, 2 of which are most commonly used:

  • Limited liability companies by shares (S.A. or Sociedade Anónima) and
  • Limited liability companies by quota (or Sociedade por Quotas).

LDA. Companies

These companies are incorporated with at least 2 shareholders. There is also a sub-type of company bearing 1 single shareholder, being in this case identified by the denomination Sociedade Unipessoal LDA. (sole shareholder company). However, an individual may only be the sole shareholder of 1 Sociedade Unipessoal.

The share capital in these companies is divided in quotas[1]. As a rule, and upon incorporation, each shareholder has one single quota, which nominal value may vary from EUR 1 to any given amount. Consequently, the minimum share capital of LDA. companies is EUR 2, and for the Sociedade Unipessoal sub-type, the minimum share capital is EUR 1.

Quotas are registered with the Commercial Registrar of Companies, do not have a physical existence, and cannot be listed in a Stock Exchange.

LDA. companies have a simplified governance structure, comprising the following corporate bodies:

  • General Meeting (which in the case of a Sociedade Unipessoal is assured by the sole shareholder)
  • 1 or more directors
  • 1 accountant (TOC).

Additionally, 1 Independent Auditor or a Supervisory Board is required should, for a period of 2 years, if 2 of the following thresholds are met:

  • Balance exceeds 5 million
  • Total turnover and other revenue of at least EUR3 million
  • Average number of 50 or more employees.

S.A. Companies

These companies are incorporated with at least 5 shareholders, except in cases where a company is the sole shareholder.

The share capital is represented by shares which can have, or not, a nominal value. In the first case, all shares must have the same nominal value. The minimum nominal value – or, for shares with no nominal value, the minimum issue value – is of EUR 0.01. In any case, the minimum share capital required is EUR 50,000.

Shares are nominative, and may be in book entry form, or titled, and are registered (i) with the company, in a share ledger book, (ii) in a banking entity or (iii) in a central registration entity.

Governance structure is more complex than LDA. companies, and 3 different governance structures are available:

1) Portuguese “traditional” system:

  • General meeting
  • 1 director (provided the share capital remains below EUR200,000), or a board of directors (more than 1 member and not necessarily in an odd number)
  • Supervisory body, which may be:
    • 1 Independent Auditor (plus their substitute; both must be chartered accountants or a chartered accountants’ firm), or
    • A supervisory board (minimum of 3 members plus 1 substitute; at least 1 of the effective members must be a chartered accountant or a chartered accountants’ firm), plus a chartered accountant or a chartered accountant firm (mandatory for Stock Exchange listed companies).

2) 2-tier system:

  • General meeting
  • A 2-tier board structure comprising
  • A general and supervisory board
  • An executive board of directors or 1 executive director (provided the share capital remains below EUR 200,000)
  • 1 independent auditor.

3) 1-tier system:

  • General meeting
  • A board of directors which includes an audit committee of no fewer than 3 members
  • 1 independent auditor
  • A company secretary (who must have an appropriate degree or be a paralegal) is only mandatory for Stock Exchange listed companies.

[1] Normally also translated as shares, quotas are nonetheless subject to a different legal regime under Portuguese law.

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 lawful 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 Puerto Rico Secretary of State.

Puerto Rico corporations 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, an LLC may elect to be treated as partnership for tax purposes, receiving pass-through treatment by making an election on Form SC 6045 on or before the due date, including extensions, of the LLC’s Puerto Rico income tax return for the taxable year in which the election is to become effective. The Secretary of the Puerto Rico Treasury Department may issue further guidance as to the form and manner of making such election. 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.

Puerto Rico limited liability companies, as is the case with corporations, must maintain a designated principal office and registered agent for service of process in Puerto Rico.

Note: Additional forms of entity structures also exist and could be useful in some instances but are not covered in this guide either because they are less commonly used types of entity structures or not as likely to be relevant to the reader.

Romania

Several types of companies may be used as corporate vehicles in Romania. Joint stock companies (societate pe actiuni or JSC) and limited liability companies (societate cu raspundere limitata or 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:

  • 1 or more directors (forming a board of directors), with the possibility of management delegation, in the 1-tier system; directors are appointed by the general meeting of shareholders while managers are appointed by the board of directors or
  • An executive board and a supervisory board in the 2-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 in a 1-tier system, a sole director/board of directors represent(s) the company through its president. Under the 2-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 1 or more directors, appointed by the general meeting of shareholders.

A 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 under 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 (eg, amending the charter, reorganization and liquidation, distribution of profit, approving annual reports and some deals); by the executive body (ie, 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 2 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 under 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 (eg, amending the charter, reorganization and liquidation, approving annual reports) by the executive body (ie, the 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 2 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 as the Companies Act 1967 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. The favorable 1-tier corporate taxation regime proves to be advantageous to shareholders.

South Africa

In addition to doing business as a sole proprietor (where an individual conducts business in their personal capacity), there are different types of for-profit entities used to conduct business in South Africa:

  • Private company
  • Public company
  • Personal liability company
  • External company (these entities are branches of foreign companies and not South African incorporated entities as discussed below)
  • Trust (unique legal arrangements where property is transferred to and held or administered by one or more trustees on behalf of the trust beneficiaries for their benefit or for the achievement of a specified purpose other than the trustees' own benefit)
  • Partnership (regulated by a consensual contract between 2 or more persons to place their assets, labor and skill, or some or all of them, in lawful commerce or business, and to divide the profit and bear the loss in certain proportions)

This guide will focus on private and public companies as the most commonly used entities in South Africa.

South Korea

Joint-stock company (Jusik Hoesa)

  • Separate and distinct entity
  • General meeting of shareholders is the ultimate decision-making body and determines the fundamental matters regarding the company's structure and management specified under the Korean Commercial Code (KCC) or the company's articles of incorporation (AOI)
  • Board of directors, which is comprised of directors who are elected at the general meeting of shareholders, decides important matters related to daily operations of the company not specially reserved for determination by the general meeting of shareholders under the KCC or the AOI
  • Representative director or executive officer, who is elected by the board of directors, is the administrative arm responsible for implementing the decisions of the general meeting of shareholders and board of directors with the 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)

  • Separate and distinct entity
  • General meeting of members is the ultimate decision-making body and determines fundamental matters regarding the company's structure and management
  • Directors elected at the general meeting of members decide important matters related to daily operations of the company not specially reserved for determination by the general meeting of members by a majority vote.
  • Director (in case a limited company has only 1 director) or representative director elected at the general meeting of members (in case a limited company has two or more directors) is the administrative arm responsible for implementing the decisions of the general members and directors with the 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 and board powers are delegated.

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 of directors and board powers are delegated.

Sweden

Limited company (aktiebolag or AB)

A limited company (Aktiebolag or 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 ABs and required in public ABs), 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 (handelsbolag, HB)

Under the Partnership and Non-registered Partnership Act (Handelsbolagslagen), a trading partnership (Handelsbolag or HB) is constituted by an agreement between 2 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 (kommanditbolag or KB)

A limited partnership (Kommanditbolag or KB) is a form of a trading partnership in which 1 or more partners has reserved the right not to be liable for the obligations of a KB in excess of the sum he they have contributed or undertaken to contribute to a KB. Such a partner is referred to as a limited partner (Kommanditdelägare).

Other partners in a KB are referred to as general partners (Komplementär). A KB must have 2 or more partners, at least 1 general partner and 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 (filial, Branch)

A branch (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 1 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. Managed by a board of directors, which is elected by the general meeting of shareholders. The articles of incorporation may limit the transferability of a company’s shares.

Taiwan, China

Company limited by shares

A company limited by shares must carry on a profit-seeking business and is a separate and distinct legal entity whereby its capital is divided into shares. 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 entitled "Closely-Held Company" (CHC) was added to Chapter 5 (Company Limited by Shares) as a result of the amendments to the Company Act. Its 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 must file an FIA with the Investment Commission and upon approval incorporate a limited company in Taiwan. A limited company has fewer corporate formalities than a company limited by shares. For example, a limited company does not have 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 the general affairs of a company. Directors are elected by the 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 the general affairs of a company. Directors are elected by the shareholders of a company.  Public limited company can be newly incorporated or converted from, or amalgamated with, an existing private limited company. Usually a purpose of using a public limited company is to obtain investment from the public at large, for example, by making a public offering of its shares.

Partnerships

There are 3 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 2 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 1 or more members. Board members are not required to have a share in the company. Board members can transfer their duties and authorities to 1 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 1 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 capital that is 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.

Ukraine

The below summary provides an overview of 2 corporate structures that are commonly used in Ukraine. Other alternatives provided by law, such as private enterprise, additional liability company, general partnership and limited partnership, may be used, but are less common due to their legal uncertainty and additional liability for their participants.

It is also possible for a foreign company to establish a representative office which, however, is not a separate company, and the parent company remains liable for all obligations of such representative office.

Limited Liability Company (LLC)

  1. Separate and distinct legal entity. Subject to certain exceptions, participants (shareholders) are not liable for debts and obligations of the company
  2. Taxed on its earnings at a corporate level and participants taxed on any distributed dividends
  3. Management and organization governed by charter (articles of association) and internal Director (board of directors) has overall management responsibility
  4. Event-driven filings must be made from time to time, such as in the case of changes of director(s), ultimate beneficial owners or other corporate details; accuracy of information on the ultimate beneficial owners should be confirmed each time when the filing is made.

Following the introduction of martial law in Ukraine on February 24, 2022, the deadlines for any UBO filings and filings related to changes in the ownership structure were suspended. The deadlines will be resumed not earlier than 3 months following the termination or cancellation of martial law. However, legal entities may voluntarily submit information on UBOs during martial law.

From January 2023, LLC may choose to keep the shares records in the companies register as before or switch to the accounting system of shares maintained by the Central Depository in the manner established by the National Securities and Stock Market Commission. However, the detailed procedure for switching, recording and operations of such system for LLCs is not adopted yet.

Joint-Stock Company (JSC)

  1. Distinct legal entity separated from its shareholders. Subject to certain exceptions, shareholders are not liable for debts and obligations of the company
  2. The law provides for 2 types of JSCs: public and private. The main differences between the two types of JSCs are:
    1. Shares of public JSCs are publicly traded on stock exchanges, while shares of private JSCs are placed among a limited number of persons
    2. Shareholders of JSCs may sell or otherwise transfer their shares without the consent of other shareholders of JSC.
    3. When convening the general shareholders’ meeting, in addition to notifications to shareholders, on own website and in the public database of the National Securities and Stock Market Commission (the Securities Commission), public JSCs shall also notify the stock exchange where its shares are traded
    4. JSC may have a one-tier or two-tier governance structure. In a one-tier governance structure, the management bodies of a JSC are a general meeting and board of directors. In a two-tier governance structure, the management bodies of a JSC are a general meeting, supervisory board and board of directors or sole director
    5. Appointment of a corporate secretary in public JSCs is mandatory
    6. Members of the supervisory board of a public JSC are elected only through cumulative voting, and the minimum number of members is 5
    7. Mandatory establishment of an (i) audit committee, (ii) remuneration committee and (iii) appointment committee in the supervisory board of a public JSC
    8. Annual financial statements of public JSCs shall be audited by an independent auditor and
    9. When considering a prior approval for execution of a related party transaction, the supervisory board or board of directors of a public JSC shall engage an independent auditor, evaluator (or obtain a decision of an audit committee, if established), and, if approved, publish the essential terms of such transaction.
  3. JSC is a less common form than LLC as it has more regulated corporate procedures and less flexibility in adopting corporate decisions. In addition, the law provides for more strict and extensive reporting and notification procedures, including to the Securities Commission
  4. Taxed on its earnings at a corporate level and shareholders taxed on any distributed dividends
  5. Must file annual report to the Securities Commission, which is publicly available, and
  6. Event-driven filings must be made from time to time, such as in the case changes of members of executive and supervisory bodies or other corporate details; during all such filings accuracy of information on the ultimate beneficial owners should be confirmed each time when the filing is made.

The regulation of JSC activities was significantly revised under a new Law of Ukraine “On Joint-Stock Companies” (JSC Law), which became effective on January 1, 2023. The JSC Law provides one-year transition period to align the JSCs’ constitutional documents and activity with the JSC Law.

United Arab Emirates

The most commonly adopted legal structures in mainland UAE are a limited liability companies (LLC) and a branch office (Branches). 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 center for the parent company (Rep Office).

It is also possible to establish an entity in 1 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.

On November 23, 2020, the UAE government issued a new decree amending the Commercial Companies Law (New Law) to abolish the fundamental requirement of having 51-percent or UAE national ownership of an onshore company. Therefore, subject to the competent licensing authorities' specific requirements, LLCs may now be a 100-percent owned by foreign shareholders. 

A further notice. At the time of writing this guide, information regarding these changes is still limited.

It is mooted that a further Strategic Impact Activities has been issued, which applies at a federal level to all Emirates (Cabinet Decision). The Cabinet Resolution is expected during the 1st quarter.

The strategic list includes the following sectors: security and defense activities and activities of a military nature; banks, money-changing establishments, finance companies and insurance activities; printing cash currency; telecommunications; Hajj and Umrah services; Holy Quran memorization centers; and fishery-related services. Subsequent to the new Cabinet Resolution Decision, it is then at the discretion of the competent licensing authorities of each Emirate to set the conditions for increased foreign ownership for business activities falling outside the negative strategic list. The licensing authorities of each Emirate will therefore determine the permitted foreign ownership threshold of each business activity (not on the negative strategic list) and also set any other applicable requirements, such as minimum share capital or Emiratization thresholds.

Branch

A branch is not regarded as a separate entity but treated as an extension of its parent company. Currently pursuant to the recent changes in the UAE law, a branch no longer requires a UAE national or a company wholly owned by UAE nationals to act as its national agent (colloquially known as a "sponsor" and is not to be confused with a commercial agent), subject to the implementation of the New Law which, amongst other things, has abolished this requirement. The national agent provides licensing and other governmental services for the Branch for a fixed fee to be paid at the date of the licensee issuance but would not have any rights or entitlements to the Entity's business.

At the time of writing this guide, there is little information regarding the abolishment of engaging a national agent pursuant to the New Law, however,more detail on how this will be implemented is expected near the end of the 1st quarter of 2021.

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.

Dual License Branch

A Dual Licence Branch is a branch of an FZ-LLC established in mainland UAE. It is not treated as a separate entity but treated as an extension of its parent company. Establishing a dual licensee branch is possible in the case of  FZ-LLCs registered in certain free zones only. It may operate from the same office as its parent company without the need for a separate registered address.

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.

Public limited company

A further alternative, being a public limited company, which is a company limited by shares or guarantee. This form of entity could be useful in some instances (as, unlike a private limited company, it enables capital to be raised from the public), but as it is a less commonly used type of company it is not covered in this guide.

Limited liability partnership

Distinct legal entity separate from its members. Subject to certain exceptions (such as fraud), members are not liable for debts and obligations of the company.

Flexibility in management and organization. Management and organization are governed by a confidential LLP agreement. Designated members are responsible for certain statutory requirements (such as signing annual accounts). An LLP must have 2 designated members carrying on lawful business with a view of profit.

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.

Note: Additional forms of entity structures also exist and could be useful in some instances but are not covered in this guide either because they are less commonly used types of entity structures or not as likely to be relevant to the reader.

Vietnam

Vietnamese corporate laws introduce 5 entity types, being a joint stock company (JSC), a limited liability company with 2 or more members (LLC2), a limited liability company with 1 member (LLC1), a partnership and a private enterprise.  The LLC1 is the most popular and widely used type by foreign investors when they intend to set up and wholly own and control a legal entity in Vietnam. Partnerships and private enterprises are more suitable for local and small investors. In addition, the form of partnership may only be designed and appropriate for a limited number of specific professional businesses, such as legal or auditing businesses. Therefore, we will only cover the first 3 entity types: JSC, LLC2 and LLC1.

Joint stock company (JSC)

  • At least, 3 shareholders and no restriction to the maximum number.
  • Generally, no personal financial liability of shareholders as it is limited to their capital contribution  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 an Enterprise Registration Certificate (ERC), the charter (which is usually called the articles of incorporation in certain jurisdictions), organizational resolutions of the general shareholders meeting (GSM) and the board of management (BOM), shareholders’ registration book and share certificates.
  • The GSM makes decisions on the most important affairs of the JSC. The BOM has overall responsibility to implement the GSM's decisions and makes decisions on certain, less important affairs of the JSC. The general director (or CEO) has day-to-day management responsibilities.
  • Shareholders typically purchase shares in the JSC, either ordinary shares or preference shares.
  • Individual shareholders are required to file tax returns (personal income tax) with local tax authorities upon receiving dividends (where they would like to declare tax by themselves). With respect to corporate shareholders, the distributed dividends would be included in their tax finalization returns (corporate income tax) at the end of the relevant fiscal year.   

Limited liability company with 2 or more members (LLC2)

  • Must have at least 2 members and no more than 50; can be both individuals and legal entities
  • Generally, no personal financial liability of members as it is limited to their capital contributions in an LLC2.
  • 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:
    • Enterprise Registration Certificate (ERC)
    • Charter (which is usually called articles of incorporation in certain jurisdictions)
    • Organizational resolutions of the Members' Council (MC)
    • Members registration books and
    • Capital contribution certificates
  • The MC makes decisions on the most important affairs of the LLC2 and has overall management responsibility. General Director (or CEO) has day-to-day management responsibilities.
  • Members contribute capital to the charter capital of LLC2 or purchase paid capital contributions from former members.
  • Individual members are required to file tax returns (personal income tax) with local tax authorities upon receiving profits (where they would like to declare tax by themselves). With respect to corporate members, the distributed profits would be included in their tax finalization returns (corporate income tax) at the end of the relevant fiscal year.

Limited liability company with 1 member (LLC1)

  • Only 1 member is required, either an individual or a legal entity.
  • Generally, no personal financial liability of a member as it is limited to its capital contribution in an LLC1.
  • 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:
    • Enterprise Registration Certificate (ERC)
    • Charter (usually called the articles of incorporation in certain jurisdictions) and
    • Decisions of the sole member, which may be made directly by a member or indirectly through either the member’s council or the company president.
  • Either the member’s council or the company president has overall management responsibility. The General Director (or CEO) has day-to-day management responsibility.
  • Member contributes capital to the charter capital of the LLC1 or purchase paid capital contribution from the former member.
  •  Where the company owner is a legal entity, its distributed profits would be included in its tax finalization return (corporate income tax) at the end of the relevant fiscal year.

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 financial liability of limited liability partners as it is limited in their capital contributions in the partnership. However, unlimited liability partners are liable for the obligations of the partnership to the extent of all of their assets.
  • 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 Enterprise Registration Certificate (ERC), charter (which is usually called articles of incorporation in certain jurisdictions), 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. The limited liability partners can purchase paid capital contribution in the Partnership from former limited liability partners.
  • Individual partners are required to file tax returns (personal income tax) with local tax authorities upon receiving profits (where they would like to submit a self-declaration of their tax). With respect to corporate limited liability partners, the distributed profits would be included in their tax finalization returns (corporate income tax) at the end of the relevant fiscal year.

Private enterprise

  • Only a sole individual owner
  • The owner has personal liability for all activities of the private enterprise to the extent of all of their assets.
  • 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 an Enterprise Registration Certificate (ERC) and internal rules issued by the owner.
  • Owner has overall and day-to-day management responsibilities.
  • Owner registers the investment capital of a private enterprise.