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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 two 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)

    • Two or more shareholders
    • The local management is in charge of a board of directors, which may have at least one member with no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between one and three 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 two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • Only one shareholder
    • The local management is in charge of a board of directors, which may have at least one member with no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between one and three 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 one regular and one alternate statutory auditor)
    • Typical charter document: bylaws
    • Corporate books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and attendance records book
    • Capital stock shall be fully paid up upon execution of bylaws
    • SAUs are not allowed to be incorporated or wholly owned by another SAU

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    • One or more shareholders
    • The managers must be individuals, who may be appointed for an indefinite period. At least one 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 two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    • Two or more members
    • The local management is in charge of single or several managers with full powers who may act individually, or a board of managers acting by majority. Managers may be appointed for an indefinite term. The 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 one regular and one 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 two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares.
  • Minimum capital requirement

    Corporation (Sociedad Anónima or SA)

    Minimum capital of SA is 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 February 2022: ARS66,000).

    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

Legal liability

Argentina

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.

Australia

Branch

A foreign company has full legal responsibility for the actions of the Australian branch and can sue and be sued in Australia. A local agent may also be personally liable for penalties imposed on the foreign company for contraventions of the Corporations Act.

Proprietary company

A company's shareholders' liability is generally limited to the extent of their initial investment, and the amount, if any, of the issue price of their shares which is unpaid.

Public company

A company's shareholders' liability is generally limited to the extent of their initial investment, and the amount, if any, of the issue price of their shares which is unpaid.

Austria

Limited Liability Company and Stock Corporation

Generally no personal liability of the shareholders (except for payment of minimum share contributions).

General Partnership and Limited Partnership

Partners of an OG are fully liable for its debts and liabilities with their entire assets.

Partners of a KG include 1 or more general partners who have unlimited joint and several liability for all debts of the KG and 1 or more limited partners with restricted liability for its debts to a certain amount.

Bahrain

With Limited Liability (WLL)

A shareholder's liability is limited to the extent of their capital in the company.

Closed Shareholding Company (BSC(c))

A shareholder's liability is limited to the extent of their capital in the company.

 

Foreign Branch (Branch)

A parent company would bear all the liabilities of the branch office and operations in Bahrain.

Belgium

Public limited company (société anonyme/naamloze vennootschap)

Limited liability of the shareholders – shareholders of a public limited company are in principle not liable for the debts of a public limited company aside from their financial contribution to the public limited company (with the exception of the incorporators' liability during the first 3 years in case of a misrepresentation of the financial plan).

Limited company (société à responsabilité limitée/besloten vennootschap)

Limited liability of the shareholders – shareholders of a limited company are in principle not liable for the debts of a limited company aside from their financial contribution to the limited company (with the exception of the incorporators' liability during the first 3 years in case of a misrepresentation of the financial plan).

Belgian branch office of a foreign company

The foreign company shall be liable for all the obligations entered into by the legal representative on behalf of the Belgian branch office.

Brazil

Limited liability company (Sociedade Limitada)

As a general rule, a quotaholder is not liable for the company's obligation, but solely for the payment in full of the quotas subscribed by them. However, in the event of the company's bankruptcy, each quotaholder is liable, jointly and severally with the others, for payment in full of the company's capital not yet paid in.

Once all the quotas have been fully paid in, the quotaholders will have no further liability, except for certain cases of violation of law and of the articles of organization, in which case the company's legal personality may be disregarded (ie, piercing the corporate veil).

The managers of the company are not liable for obligations assumed on behalf of the company, unless they exceed their powers or violate the law or the articles of organization.

Corporation (Sociedade Anônima)

As a general rule, a shareholder is not liable for the corporation's obligations, but solely for the payment in full of the subscribed shares.

Once all the shares have been fully paid in, the shareholders will have no further liability, except for certain cases of violation of law or of the bylaws, in which case the corporation's legal personality can be disregarded (ie, piercing the corporate veil).

The managers of the corporation are not liable for obligations assumed on behalf of the corporation, unless they exceed their powers or violate the law or the bylaws.

Canada

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

Shareholders of a corporation are generally not liable for the debts or obligations of the corporation.

Chile

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

The liability of the partners of an SRL is limited to the amount of their contributions or to the higher amount established in the bylaws.

Corporation (Sociedad Anónima or S.A.)

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

Simplified Corporation (Sociedades por Acciones or SpA)

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

Branch of a Foreign Legal Entity (Agencia)

The parent company is liable for the actions of the branch in Chile.

In a statement made by the agent, it must be declared, for example, that goods of the company are affected by Chilean law and that the company shall keep easy-to-sell goods in Chile to comply with its obligations.

China

Shareholders of an LLC are generally not liable for the debts of a company aside from their capital contribution to the company.

Colombia

General partnership (Sociedad Colectiva)

Partners of a general partnership have subsidiary personal liability for the debts of the company, aside from their contribution to the partnership.

Limited partnership (Sociedad en Comandita Simple y por Acciones)

Managing partners have personal liability and limited partners have limited liability.

Limited liability company (Sociedad de Responsabilidad Limitada)

Partners have limited liability. Taxation and labor obligations exceptions exist under the laws.

Corporation (Sociedad Anónima)

Shareholders have no personal liability.

Simplified stock company (Sociedad por Acciones Simplificada)

No minimum capital requirement. A simplified stock company has authorized capital, subscribed capital and paid capital. 

Czech Republic

Limited liability company

Shareholders of a limited liability company are generally not liable for the debts of a company if the sum of their contributions to the registered capital have been fully paid up.

Joint stock company

Shareholders of a stock corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

Denmark

Limited liability company (Kapitalselskab)

The owners of the company (the shareholders) are not personally liable for the acts and/or omissions of the limited liability company.

The liability of the shareholders is generally limited to their capital investment in the company (ie, the amount the shareholder has paid for its shares).

The only express authority for holding a shareholder liable is a provision in the Danish Companies Act whereby a shareholder is liable for damages suffered by the company, other shareholders or third parties if the shareholder intentionally or negligently has caused damage to the company and/or the shareholders.

Egypt

JSC

Liability of JSC's shareholders remains limited to the value of their shares in a company, and they are generally not liable for the debts of a JSC.

LLC

Quotaholders are generally not liable for the debts of an LLC aside from their individual contributions.

OPC

Founder is generally not liable for the debts of an OPC aside from their contribution to an OPC, unless:

  • Founder liquidates or suspends company's activity in bad faith prior to the end of its term or purpose
  • Founder enters into agreements under company's name prior to incorporation, where such agreements were not essential for incorporation or
  • Personal and company funds of the founder were comingled.

Branch

A foreign-based company is generally liable for the debts and other financial dues on a branch.

RO

The parent company is generally liable for the debts of the RO noting that the RO must not engage in any type of taxable commercial activities to avoid immediate termination of its registration.

Finland

Osakeyhtiö (Oy)

Shareholders of a company are generally not liable for the debts of a company aside from their financial contribution to the company.

France

Société par actions simplifiée (SAS)

Shareholders of a SAS are generally not liable for the debts of a corporation aside from their financial contribution to the SAS.

Société à responsabilité limitée (SARL)

Shareholders of a SARL are generally not liable for the debts of a corporation aside from their financial contribution to the SARL.

Société anonyme (SA)

Shareholders of a SA are generally not liable for the debts of a corporation aside from their financial contribution to the SA.

Germany

GmbH – limited liability company

Shareholders are not liable to creditors if the share contribution has been paid in.

Greece

Societe anonyme (S.A.)

Shareholders

Shareholders of a societe anonyme are generally not liable for the debts of the company.

Company is solely liable for its debts with its assets.

Shareholders would be directly liable for the debts of the societe anonyme in case they misuse the company for the purpose of evading their personal liability (lifting of the corporate veil).

Members of the BoD

The Directors are liable towards the company for any fault committed by them during the management of the company's affairs.

The BoD actions and resolutions should be directed to the best interests of the company and its stakeholders.

Every Director shall be particularly liable for any omissions or untrue statements in the balance sheets concealing the true position of the company.

The Directors of a societe anonyme may be jointly and severally liable with the company for any tort committed.

The Directors and the executive officers of a societe anonyme may be jointly and severally liable with the company for any overdue tax payment levied upon the legal person of the company.

Furthermore, the Directors are directly liable in accordance with the provisions of the Greek Bankruptcy Code.

Limited liability company (L.T.D.)

Partners are only liable for their corporate obligations through the company's assets. Partners in principle have no personal liability whatsoever regarding the company's affairs, obligations, responsibilities and liability towards third parties or towards the authorities.

However, the administrator(s) of a limited liability company may be jointly and severally liable with the company for any overdue tax payment levied upon the legal person of the company.

Private company (P.C.)

Partners are only liable for their corporate obligations through the company's assets. Partners in principle have no personal liability whatsoever regarding the company's affairs, obligations, responsibilities and liability towards third parties or towards the authorities.

However, the administrator(s) of a private company may be jointly and severally liable with the company for any overdue tax payment levied upon the legal person of the company.

Hong Kong, SAR

Limited private companies

Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

Hungary

Private company limited by shares (Zrt.)

Shareholders of a Zrt. are generally not liable for its debts, liability of shareholders is limited to their respective share capital contributions. However, in extreme cases, such as in the case of insolvency, shareholders may be held liable if it is proven that they have “abused limited liability”.

Limited liability company (Kft.)

Quotaholders are generally not liable for the debts of a Kft., liability of quotaholders is limited to their capital contributions. However, in extreme cases, such as in the case of insolvency, shareholders may be held liable if it is proven that they have “abused limited liability”.

India

Private limited company

Private limited companies provide limited liability to its shareholders, and the shareholders have no personal liability beyond the amount they originally paid for their shares.

Indonesia

Limited liability company

Subject to limited exceptions as stipulated under the Indonesian Company Law, the shareholders are not liable for the debts of the company beyond their financial contributions to the company.  However, the Indonesian Company Law also recognizes the legal principle of lifting the company’s liability, which causes the shareholders to be personally liable for the company’s liability (piercing the corporate veil principle) – for example, when there is bad faith among the shareholders and ignorance of the formal incorporation procedure. The shareholder may also be held liable when proven to have taken part in a tortious act by the company.

Ireland

Private company limited by shares (LTD)

The liability of shareholders is limited to the amount, if any, unpaid on the shares issued by the company.

 

External company

Determined by the laws of the jurisdiction of incorporation.

Israel

Company

Shareholders of a company are generally not liable for the debts of a company aside from their financial contribution to the company.

Branch / representative office

Same as the original entity.

Italy

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

Quota-holders of a corporation are generally not liable for the debts of the corporation. According to Italian law, their liability is limited to their contributions. The quota-holders are jointly liable with the directors in case they have intentionally decided or authorized the performance of harmful activities on the company, the quota-holders or third parties.

Società per azioni (S.p.A.)

No personal liability of the shareholders.

The different allocation of the corporate rights to shareholders is not allowed.

Japan

Registered branch

A registered branch is considered as a part of its foreign company, which will be liable for any activities or debts of the registered branch.

Kabushiki-Kaisha (KK)

Liability of shareholders is limited to the amount of equity participation.

Godo-Kaisha (GK)

Liability of members is limited to the amount of equity participation.

Luxembourg

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

Shareholders of the company are generally not liable for the debts of the company, aside from their financial contribution to the capital of the company.

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

Shareholders of the company are generally not liable for the debts of the company, aside from their financial contribution to the capital of the company.

Special limited partnership (Société en commandite spéciale or SCSp)

General partner(s) (associés commandités) are jointly and severally liable for the partnership's commitments, and the limited partner(s) (associés commanditaires) are normally not liable beyond their commitment.

Malaysia

Shareholders of a private limited company are generally not liable for the debts of the company, aside from their financial contribution to the company.

Mauritius

In a company limited by shares, the liability of its shareholders is limited by its constitution to any amount unpaid on the shares respectively held by the shareholder.

In a company limited by guarantee, the liability of its members is limited by its constitution to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up.

In an unlimited company, there is no limit placed on the liability of its shareholders.

Mexico

S.A. de C.V.

Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

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

Partners of a company are generally not liable for the debts of a company aside from their financial contribution to the company.

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

Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

Netherlands

Branch office

Determined by governing law of the head office.

B.V. (private company with limited liability)

Shareholders of a BV are generally not liable for the debts of a BV aside from their financial contribution to the BV.

Co-operative U.A.

Members of a co-operative UA are not liable for the debts of the co-operative aside from their financial contribution to the co-operative.

C.V. (a limited partnership)

A general partner is jointly and severally liable for any indebtedness of the CV towards third parties. The liability of a limited partner is limited to the amount of its contribution to the CV, provided that the limited partner does not act on behalf of or for the benefit the CV towards third parties.

New Zealand

Limited liability company

Shareholders' liability of limited liability companies are generally limited to the extent of their initial investment and the amount, if any, of the issue price of their shares which is unpaid. Additionally, certain provisions of the Companies Act may place liability on shareholders in connection with the relevant company, including where that liability is expressly provided in a company's constitution, where a shareholder's actions place it in the position of a director (ie, a deemed director) and director liability arises, or where a shareholder is liable to repay a distribution if that the distribution is recoverable under the Companies Act. It is possible for companies to become an 'unlimited' liability company where the shareholders' liability will be unlimited, which can enable a company to check-the-box for US tax purposes.

Branch

Foreign companies have full legal responsibility for the actions of their New Zealand branches and can sue and be sued in New Zealand.

Nigeria

Limited Liability Company

Limited liability companies, whether private or public, are recognized as having a separate legal personality from their members. The liability of a member in a limited liability company is limited to the amount, if any, left unpaid on the shares held by such member in the company.

Unlimited Company

An unlimited company, like every other corporate entity, has a separate legal personality from its members. However, its members do not enjoy the full benefits of this separate legal personality as there is no limit to their liability for the debts of the company.

Limited liability partnership

A limited liability partnership is a legal entity separate from its partners. However, a designated partners so appointed is liable to all penalties imposed on the limited liability partnership for any contraventions to the provision of the Act.

Limited Partnership

 

In a limited partnership, the general partner is liable for all debts and obligations of the firm. The liability of the limited partners is limited to the amount agreed to contribute as capital at the inception of the partnership.

Company Limited by Guarantee. The total liability of members to contribute to the assets of the company in the event of being wound is to a minimum of NGN100,000.

Incorporated Trustees

Trustees appointed under an Incorporated Trustee are legally liable for handling of assets held in trust, regulatory obligations.

Norway

Private LLCs

Shareholders' liability is generally limited to the shareholders' equity contributions.

Public LLCs

Shareholders' liability is generally limited to the shareholders' equity contributions.

Partnerships with liability

Partners are jointly liable for all partnership's obligations. However, partners can agree to be severally liable for the partnership's obligations.

Peru

Corporation, Closed Stock Corporation and Open Corporation (Sociedad Anónima or S.A., Sociedad Anónima Cerrada or S.A.C. and Sociedad Anónima Abierta or S.A.A.)

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

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

The liability of the partners of an S.R.L. is limited to the amount of their contributions.

Branch of a Foreign Legal Entity (Sucursal)

The parent company shall comply with the applicable Peruvian legislation regarding the obligations undertaken by the branch in Peru. Therefore, the parent company will be liable for such obligations.

Philippines

Subsidiary

A corporation has a personality separate and distinct from its individual stockholders. Liability of stockholders is limited only to the extent of their capital contribution. However, the privilege of being considered as a separate and distinct entity is confined to limited uses. Should this be exercised for fraudulent, unfair or illegal purposes (eg, to evade taxes, escape liabilities to third parties, confuse legitimate issues of employer-employee relationship, protect fraud), the veil of corporate entity may be pierced, and the stockholder may then be held personally liable.

Partnership

Partners are liable pro rata with all their property and, after all the partnership assets have been exhausted, for contracts entered into in the name and for the account of the partnership.

All other entity types

Liability of an entity type is deemed to be a liability of the head office.

Poland

Generally, shareholders of limited liability companies, simplified joint-stock companies and joint-stock companies are not liable towards creditors if share contribution has been paid in full, with exceptions provided for the by statute (inter alia, in certain cases at the stage of incorporation of the company, prior to registration in the business register, shareholder may be liable when acting in the name of the company).

Partners in partnerships are jointly and severally liable for all liabilities of the partnership, with 2 exceptions:

  • Partners in professional partnerships are generally not liable for the actions or omissions of other partners and/or personnel supervised by those other partners

  • Limited partners in limited liability partnerships and limited joint-stock partnerships are liable only up to the amount they have paid in as a contribution.

Liability in respect of branches and representative offices is generally borne by their founding entities.

Portugal

Portuguese corporate law is based on the principle of limited liability, meaning that, as a general rule the liability of shareholders is limited to its contribution to the share capital[1].

Notwithstanding, there are exceptions to this principle of limited liability:

  • Liability over fully owned subsidiaries or subordinated companies: A parent company is liable for the financial responsibilities of a subsidiary if: (i) there is a subordination contract between the parent company and the subsidiary (according to which a parent company is given broad legal powers over the subsidiary company); or (ii) such subsidiary is fully owned (100 percent) by the parent company
  • Joint liability of the shareholder in case of losses caused to the company or to other shareholders by a director appointed by such shareholder: Shareholders or groups of shareholders who have the right to appoint a director, without the need of the vote of other shareholders, are jointly liable with such director for any losses that they cause to the company or to other shareholders
  • Liability of the sole shareholder in case of bankruptcy: In case a fully owned subsidiary is declared bankrupt the sole shareholder shall have unlimited liability for the debts and liabilities created after it has become the sole shareholder of such subsidiary, provided that it has not complied with the rules on the allocation of the assets of the company.

[1] In the particular situation of the initial contributions to share capital of an LDA company, shareholders may be jointly liable for all the contributions to the share capital that have been agreed in the incorporation agreement. In such cases, even if a given shareholder has been excluded or its share has been re-integrated by the company, the other shareholders are jointly liable towards to company for the payment of such amount.

Puerto Rico

Corporations

Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

Limited Liability Companies

Members are generally not liable for the debts of the LLC aside from their financial contribution to the LLC.

Romania

Shareholders of a JSC or an LLC are generally not liable for the debts of the company; their liability is limited to their contribution to the share capital of the company; however, in certain situations, their liability may be extended (eg, piercing the corporate veil).

Russia

Joint-stock company (public and non-public)

Shareholders of a company are generally not liable for the debts of a company aside from their financial contribution to the company. 

Limited liability company

The members in a company are generally not liable for the debts of a company aside from their financial contribution to the company.

Saudi Arabia

Limited liability company

Shareholders of an LLC are generally not liable for the debts of a corporation aside from their financial contribution to the corporation. Certain circumstances may pierce this limitation of liability.

Singapore

Limited liability company 

The liability of the members to contribute to the debts of the company is limited to the amount that they contributed to the company's capital. However, in certain special circumstances, Singapore courts may lift the corporate veil to find personal liability on the part of the member.

South Africa

Private company

A private company is recognized as a separate legal entity from its shareholders. Claims which arise out of any activities conducted by the company are the liability of that company.

Shareholders and directors are not liable for any liabilities or obligations of the private company solely by reason of being an incorporator, shareholder or director, except to the extent that the Companies Act or the company’s MOI provides otherwise. Claims which arise out of any activities conducted by the private company are the liabilities of that company. Generally the shareholders cannot be held accountable for such liabilities, unless otherwise provided in the MOI or otherwise agreed in, for instance, a shareholders' agreement.

There are various reporting protocols which need to be complied with by the directors that offer protection to shareholders, such as requirements which relate to access to annual financial statements, the establishment of statutory committees, and provision for oversight or approval of transactions by the Takeover Regulation Panel, a regulator established under the Companies Act to regulate fundamental transactions.

Public company

A public company is recognized as a separate legal entity from its shareholders. Claims which arise out of any activities conducted by the company are the liability of that company.

Legal liability rules are similar to that of a private company as set out above.

Personal liability company

As explained above, the distinguishing feature of a personal liability company compared to a private company is that its directors, including its past directors, are jointly and severally liable, together with the company, for any debts and liabilities of the company that are, or were, incurred during their respective periods of office. Shareholders cannot be held accountable.

External company

An external company is seen as the same legal entity as the foreign company, therefore any debts of an external company will be the debts of a foreign company.

Sole Proprietorship

The sole proprietor in whose name the business is conducted will incur business debts or liabilities in their own name. 

Trusts

Trustees are not personally liable for the debts and liabilities of a trust nor do the trust assets form part of the trustees estate. The beneficiaries of a trust do have a personal right against the trustees for compliance with their duties and acquire rights through the trust deed in respect of the trust assets.

Partnerships

Each partner is taxed on their share of the partnership profits and are held jointly and severally liable for the partnership's debts and liabilities unless otherwise agreed.

South Korea

Joint-stock company (Jusik Hoesa)

Shareholders of a company are generally not liable for the debts of a company aside from their financial contribution to the company in the form of purchased shares.

Limited company (Yuhan Hoesa)

Members of a company are generally not liable for the debts of a company aside from their financial contribution to the company in the form of purchased units. 

Spain

Branch (Sucursal)

The liability derived from the branch is part of the headquarters' (principal entity's) legal liability.

Limited liability company (Sociedad Limitada)

Shareholders of a limited liability company are generally not liable for the debts of a company aside from their financial contribution to the company.

Joint-stock company (Sociedad Anónima)

Shareholders of a joint-stock company are generally not liable for the debts of a company aside from their financial contribution to the company.

Sweden

Limited company (aktiebolag or AB)

Shareholders of an AB are generally not liable for the debts of an AB.

Trading partnership (handelsbolag, HB)

Partners are personally responsible for keeping the agreements of the HB and for paying its debts. Partners are jointly and separately responsible. This means that a creditor can claim payment of the entire amount of a debt from any of the partners. Partners are responsible for the debts of an HB up to the full amount of their assets.

Limited partnership (kommanditbolag, KB)

The general partner has the same rights and liabilities as a partner in a partnership, including unlimited liability for all debts and obligations of a KB. Liability of a limited partner is limited to its contribution to a KB. A limited company may be a general partner of a KB.

Branch office (filial, Branch)

A branch is subject to Swedish law and decisions of Swedish authorities regarding legal matters in connection with its business activities in Sweden.

Switzerland

Stock corporation

Shareholders of a stock corporation are generally not liable for any debt or liability of a corporation, except for the payment of share price.

Taiwan, China

Limited company

Members are not liable for the debts of the company aside from their capital contributions to the company. Branch office of a foreign company

A branch office is considered as a part of its foreign head office, which will be liable for any activities or debts of the  branch office.

Branch office of a foreign company

A branch office is considered as a part of its foreign company, which will be liable for any activities or debts of the branch office.

Thailand

Private limited company

Risk borne by shareholders is generally limited to shares they subscribed to or acquired. In other words, liability of shareholders is limited to unpaid amount (if any) on the shares respectively held by them.

Public limited company

Risk borne by shareholders is generally limited to shares they subscribed to or acquired. In other words, liability of shareholders is limited to unpaid amount (if any) on the shares respectively held by them.

Partnerships

Unregistered ordinary partnership

The personal liabilities of each partner are generally unlimited.

Registered ordinary partnership

The personal liabilities of each partner are generally unlimited.

Limited partnership

A limited partner is liable in the amount of their own contribution to the capital; an unlimited partner is liable for all obligations of a partnership.

Turkey

Joint-stock company (JSC)

Shareholders of a JSC are generally not liable for the debts of a company aside from their financial contribution to the company. Board members are jointly and severally liable for public debts which cannot be paid by the company. Liability is joint and several, with a right to recourse against other board members.

Limited liability company (LLC)

Partners of an LLC are generally not liable for the debts of an LLC aside from their contribution to an LLC. However, both Partners and Managers are liable for public debts which cannot be paid by a company. Managers’ liability is joint and several, with a right to recourse against other managers. On the other hand, Partners’ liability is in pro rata to their shareholding in the company. Recent court precedents suggest that public debts may be collected from the Partners without the need to make any prior claims against the Managers.

Ukraine

Limited liability company (LLC)

Participants are not liable for debts of the company. Those participants who did not pay their participation interest (share) in full, bear joint and several liability for  LLC’s obligations within the unpaid amount of participation interest (share).

Private Joint-Stock Company

Shareholders are generally not liable for debts of the company. Those shareholders who did not pay their share in full remain liable for PJSC obligations within the unpaid share.

PJSC founders are jointly liable for obligations related to PJSC’s incorporation.  A PJSC is liable for the obligations of the founders related to establishment of PJSC only if actions of the founders are approved by the general meeting of shareholders, which must be held within 6 months after the state registration of the company.

United Arab Emirates

LLC

The shareholders are generally not liable for the debts of the LLC aside from their contribution to the LLC. 

Branch

A branch office is legally regarded as part of its parent company and does not have a separate corporate personality or legal identity from that of its parent company.  Consequently, the parent company of the branch office is fully responsible for any liability of the branch.

FZ-LLC

Same as LLC.

FZ-Branch

Same as Branch.

Dual Licence Branch

Same as Branch.

United Kingdom

Private limited company

Shareholders not liable for debts of the company.

Limited liability partnership (LLP)

Subject to certain exceptions (such as fraud), members are not liable for debts and obligations of the company.

Registered UK establishment

Subject to the requirements of the overseas company.

United States

C corporation

Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

S corporation

Shareholders of a corporation are generally not liable for the debts of a corporation aside from their financial contribution to the corporation.

Limited liability company (LLC)

Members are generally not liable for the debts of the LLC aside from their contribution to the LLC.

Vietnam

Generally, shareholders (in respect of the JSC), members (in respect of the LLC2) and owner (in respect of LLC1) are not personally financially liable for the debts of the company, aside from their obligation to make full payment for their shares in the charter capital of the company.