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  • Form of entity

    Corporation (Sociedad Anónima or SA)

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

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

  • Entity set up

    Corporation (Sociedad Anónima or SA)

    • Two or more shareholders
    • The local management is in charge of a board of directors, which may have at least one member, no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS$50 million). Directors shall last between one and three years in office, as provided in the bylaws. They may be reelected. 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 ARS$50 million
    • Typical charter document: bylaws
    • Corporate Books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and attendance records book
    • Should cash be paid out as consideration for the stock; only 25% needs to be paid up upfront, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • Only one shareholder
    • The local management is in charge of a board of directors, which may have at least one member, no maximum number (at least three directors and one alternative director in case the company's capital stock exceeds ARS$50 million). Directors shall last between one and three years in office, as provided in the bylaws. They may be reelected. 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 needs to 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% needs to be paid up upfront, and the balance is paid within two years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

    Corporation (Sociedad Anónima or SA)

    Minimum capital of SA is ARS$100,000.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Minimum capital of SAU is ARS$100,000.

    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 March 2019: ARS$23,800).

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    No minimum capital requirement.

  • Legal liability

    Corporation (Sociedad Anónima or SA)

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

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

  • Tax presence

    Sociedad Anónima (Corporation) and SRL (LLC)

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

  • Incorporation process

    Corporation (Sociedad Anónima or SA)

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

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

  • Business recognition

    Corporation (Sociedad Anónima or SA)

    Well regarded and widely used.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

  • Shareholder meeting requirements

    Corporation (Sociedad Anónima or SA)

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

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

  • Board of director meeting requirements

    Corporation (Sociedad Anónima or SA)

    The board shall meet at least once every three 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 (financial statements of the company before the Public Registry and the Tax Authority). Every appointment or resignation of directors, change of domicile or bylaws' amendments must be filed with the Public Registry for registration.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    Initial registration is required. Only SRLs which capital stock exceeds ARS$50 million shall file their annual financial statements with the Public Registry. However, all SRLs must file their fincancial statements with the tax authorities.

  • Business expansion

    Corporation (Sociedad Anónima or SA)

    No need to change as business expands.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    If the number of shareholders exceeds one, the SAU must convert to an SA 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-shareholders corporations must pay annual fee to the Public Registry.

  • Director / officer requirements

    Not applicable for this jurisdiction.

  • Local corporate secretary requirement

    Not applicable for this jurisdiction.

  • Local legal or admin representative requirement

    Not applicable for this jurisdiction.

  • Local office lease requirement

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

  • Other physical presence requirements

    Not applicable for this jurisdiction.

  • Sufficiency of virtual office

    Not applicable for this jurisdiction.

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

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

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

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

  • Nationality or residency requirements for shareholders, directors and officers

    Corporation (Sociedad Anónima or SA)

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

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least one director needs to be Argentinean resident (provided that 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 need to 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)

    • Two or more shareholders
    • Board of directors, which must have at least one member, no maximum number requirement (at least three directors and one alternative director in case the company's capital stock exceeds ARS$50 million)

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    • One shareholder
    • Board of directors, which must have at least one member, no maximum number requirement (at least three directors and one alternative director in case the company's capital stock exceeds ARS$50 million)

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    • Two or more members (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 two or more shareholders.

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

    Only one shareholder is admitted.

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

    At least one shareholder.

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

    At least two or more members.

  • Removal of directors or officers

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

  • Required and optional officers

    Not applicable for this jurisdiction.

  • Board meeting requirements

    Not applicable for this jurisdiction.

  • Quorum requirements for shareholder and board meetings

    Corporation (Sociedad Anónima or SA)

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

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

    Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

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

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

    Not applicable for this jurisdiction.

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

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

  • Requirement regarding par value of stock

    Not applicable for this jurisdiction.

  • Increasing of capitalization if needed

    Not applicable for this jurisdiction.

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

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

  • Restrictions on transferability of shares

    Corporation (Sociedad Anónima or SA)

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

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

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

    Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

    Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

  • Obtaining a name and naming requirements

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

  • Summary of "know your client" requirements

    Not applicable for this jurisdiction.

  • Approval requirements for amending charter document

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

  • Licenses required to conduct business in jurisdiction

    Not applicable for this jurisdiction.

  • Process of purchasing and utilizing a shelf company

    Not applicable for this jurisdiction.

  • Key contacts
    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 can be held personally liable to the company, shareholders and third parties if they fail to comply with their general legal duties or specific duties contained in Argentine Law 19,550.

Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

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

Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

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

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

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 one or more general partners who have unlimited joint and several liability for all debts of the KG and one 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.

Single Person Company (SPC)

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 three 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 three 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 him/her. 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 can be disregarded ("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 ("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 of the corporation.

Chile

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

Foreign corporation is liable for all activities and business carried out by the Chilean branch.

Corporation (Sociedad Anónima)

Shareholders are only liable in the amount they agreed to regarding subscribed shares.

Limited liability company (Sociedad de Responsabilidad Limitada)

Partner liability is limited to the amounts each has agreed to contribute, or to a higher amount specified in by-laws.

Limited liability partnership (Sociedad en Comandita)

Limited partner liability is capped at the amounts the partners have agreed to contribute. General partners have unlimited liability.

Partnership pimited by shares (Sociedades por Acciones)

Shareholders are only liable in the amount they agreed to regarding subscribed shares.

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 there is any unpaid amount of their contribution to the registered capital.

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.

Their general liability is 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

Quota-holders 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 his 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 co-mingled

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 liabile 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 board of directors members are liable towards the company for any fault committed by them during the management of the company's affairs.

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

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

Furthermore, the BoD members 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.

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.

Hong Kong

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 the debts of a Zrt.; however, in extreme cases (such as insolvency), shareholders may be held liable for the debts of a Zrt. Liability of shareholders is limited to their respective share capital contributions.

Limited liability company (Kft.)

Quotaholders are generally not liable for the debts of a Kft.; however, in extreme cases (such as insolvency), shareholders may be held liable for the debts of a Kft. Liability of quotaholders is limited to their capital contributions.

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.

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.)

The quotaholders have no personal liability.

Quotaholders 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 quotaholders are jointly liable with the directors in case they have intentionally decided or authorized the performance of harmful activities on the company, the quotaholders 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 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 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.

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 U.A. 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

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. It is possible for a company to become an “unlimited” liability company, where the shareholders' liability will be unlimited, and this can enable a company to check-the-box for US tax purposes. 

Branch

A foreign company has full legal responsibility for the actions of the New Zealand branch, and can sue and be sued in New Zealand.

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 corporation's 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 (ie, evade taxes, escape liabilities to third parties, confuse legitimate issues of employer-employee relationship, protect fraud, etc.), 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 and joint-stock companies are not liable towards creditors if share contribution has been paid in full, with exceptions provided for by statute.

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

Sole shareholder private limited liability company (LDA with 1 shareholder)

There is no personal liability for the shareholder, with the exception of when a company is going through bankruptcy, if evidenced that the shareholder did not comply with provisions regarding the division of the shareholder’s patrimony and that of the company.

Private limited liability company (LDA)

No personal liability of shareholders.

Joint stock company (SA)

No personal liability of shareholders. In case of joint stock companies with one sole shareholder, liability of shareholders may be triggered:

  1. In case of bankruptcy of a company, if evidenced that the shareholder did not comply with provisions regarding division of shareholder’s patrimony and of a company and
  2. Responsibility of a shareholder vis-à-vis the company’s creditors once a 30- day moratorium has elapsed

In the latter situation, the personal liability of the shareholder may also be triggered if the shareholder no longer holds 100% of the share capital of the company, but still owes at least 90% of the share capital.

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.

Liability of a shareholder in a private company is limited to that shareholder's capital contribution.

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.

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.

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 (Sw. aktiebolag, AB)

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

Trading partnership (Sw. 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 (Sw. kommanditbolag, KB)

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

Taiwan

Company limited by shares

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

Closely-held company limited by shares

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

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 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 his or her 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. Managers are jointly and severally liable for public debts which cannot be paid by a company. Liability is joint and several, with a right to recourse against other managers.

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 JSC) and owner(s) (in respect of LLCs) are not personally 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.