Corporation (Sociedad Anónima or SA)

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

Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

Separate and distinct legal entity. Admits exclusively 1 shareholder. SAUs are not allowed to be incorporated or wholly owned by SAUs. Managed by a board of directors who are elected by the only stockholder of the corporation.

Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

Separate and distinct legal entity. Admits 1 or more shareholders. Managed by a board of directors who are elected by the stockholders. Its incorporation and development are entirely digital.

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

Separate and distinct legal entity. Admits a minimum of 2 members and a maximum of 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.

Branch

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

Proprietary company

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

Public company

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

General Partnership (Offene Gesellschaft, OG)

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

Limited Partnership (Kommanditgesellschaft, KG)

An entity performing trading activities, with 1 or more general partners who have unlimited joint and several liability for all debts of the partnership, and 1 or more limited partners who restrict their liability for its debts to a certain amount which they pay to the entity. Those whose liability is restricted are excluded from the management of the limited partnership. External managers must not be appointed.

Limited Liability Company (Gesellschaft mit beschränkter Haftung, GmbH)

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

Flexible Company (Flexible Kapitalgesellschaft, FlexKapG)

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

Stock Corporation (Aktiengesellschaft, AG)

Separate and distinct legal entity. Managed by its management board (comprising of at least 1 individual) which is responsible for making major business decisions and overseeing general affairs of a corporation. The management board is elected by the supervisory board of a corporation. The supervisory board (mandatory for stock corporations) must comprise at least 3 individuals and is responsible for the supervision of the management board.

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

With Limited Liability (WLL)

A WLL in Bahrain is a private company with 1 or more shareholders; each of them shall only be liable to the extent of their respective shareholding in the company. A WLL can be owned by a single natural or legal person. WLLs can neither engage in banking and insurance activities nor can they issue any shares, negotiable warrants or debentures to the public.

Closed Shareholding Company (BSC(c))

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

Foreign Branch (Branch)

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

Public limited company (société anonyme/naamloze vennootschap)

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

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

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

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

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

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

Limited company (société à responsabilité limitée/besloten vennootschap)

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

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

Belgian branch office of a foreign company

No separate and distinct legal entity from the foreign company. The legal representative must represent the foreign company with regard to the activities of its Belgian branch office.

Limited liability company (Sociedade Limitada)

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

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

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

Corporation (Sociedade Anônima)

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

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

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

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

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

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

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

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

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

Corporation (Sociedad Anónima or S.A.)

This type of company is mainly regulated by Law No. 18.046 (the Corporations Act) as well as by the Corporations Regulations (Reglamento de Sociedades Anónimas).

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

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

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

Simplified Corporation (Sociedades por Acciones or SpA)

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

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

Management is flexible. Bylaws may establish different management options, such as appointing certain shareholder or shareholders, 3rd parties or a board of directors.

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

Branch of a Foreign Legal Entity (Agencia)

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

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

Independent legal entity. In terms of companies set up by or with foreign investors, they need to follow the general company law (and partnership law as applicable) pursuant to the new Foreign Investment Law which took effect from January 1, 2020. Therefore, depending on the foreign shareholding ratio in a limited liability company (LLC) or a company limited by shares as discussed below, it would still work to make reference to a wholly foreign owned enterprise (WFOE) or a Sino-foreign joint venture enterprise in an economic sense. However, a WFOE or JV, including an equity joint venture (EJV) or contractual joint venture (CJV), would no longer exist as a legal form. All foreign invested enterprises (FIEs) in China will take the legal form of either a company (LLC or company listed by shares) or a partnership. Note that China just amended the general company law on December 29, 2023 with the revisions to take effect on July 1, 2024, we have discussed the relevant requirements in this guide in accordance with the revised PRC Company Law.

Limited liability company (LLC)

• Managed by board of directors or a sole director (usually adopted by LLCs with a limited number of shareholders or relatively small size of operation), responsible for making major business decisions and overseeing general operations of an LLC.

• The highest authority of an LLC is the shareholders’ meeting or the sole shareholder.

• Director is appointed/elected by the shareholder(s) of an LLC.

• Senior management officers run the day-to-day operations of an LLC, as led by a general manger who usually is appointed by the board of directors or the sole director.

Company limited by shares

• Independent legal entity.

• Board of directors (or a single director if adopted by companies with a limited number of shareholders or relatively small size of operation) has overall management responsibility, making major business decisions and overseeing general operations of a company.

• The highest authority of a company listed by shares is the shareholders’ assembly.
• Director is appointed/elected by shareholders of a company.

• Senior management officers run the day-to-day operations of a company limited by shares, as led by a general manger who usually is appointed by the board of directors or the sole director

Partnership enterprise

• NOT a separate legal person entity.

• Partnership agreement sets forth how the business is to be managed; 1 or several general partners can be designated to manage the business.

Under Colombian law, there are 5 types of commercial entities that can be incorporated:

General partnership (Sociedad Colectiva)

Partners have subsidiary personal liability, and the partnership board is the highest corporate body. A minimum of 2 partners is required at all times. General Partnerships are closed companies where partners must manage the company themselves or unanimously authorize a third person to do so, as well as unanimously authorize total or partial assignment of participation in the company, or the possibility for partners to carry out similar lines of business on their own.

Limited partnership (Sociedad en Comandita Simple y por Acciones)

A hybrid type of company, where partners can either be managing partners or limited partners. Each type of partner has different levels of liability, functions, voting rights and participation in the company. There are also 2 types of limited partnerships under Colombian law. The simple limited partnership, where partner's contributions are established as participation quota or membership interests; and the share limited partnership, where partner's contributions are established as shares.

Limited liability partnership (Sociedad de Responsabilidad Limitada)

The limited liability partnership is a hybrid type of company where partners can limit their responsibility to the amount of their contributions as a general rule, but there are certain exceptions, such as responsibility regarding taxation, labor regulation or if such extended responsibility is included in the company's bylaws. Limited liability companies must have a minimum of 2 partners and a maximum of 25.

Corporation (Sociedad Anónima)

Generally, shareholders have limited liability to the amount of the partners´ contributions. Nonetheless, the following exceptions may apply: (i) liability for outstanding obligations of the affiliate when the bankruptcy has been produced due to or as a result of the actions of the parent company; and (ii) subsidiary liability in  compulsory liquidation proceeding when it has been proved that shareholders utilized the company to defraud creditors.

A corporation must have the Shareholders General Assembly as the highest corporate body, a board of directors, a legal representative designated by the board of directors and a statutory auditor. A minimum of 5 shareholders is required, and it is generally used for large enterprises or financial institutions that are subject to control and surveillance of the Colombian Superintendence of Finance.

Simplified stock company (Sociedad por Acciones Simplificada)

Most recent and flexible type of the commercial entity created under Colombian legislation. Shareholders have no personal liability, as long as they refrain from employing the company for unlawful activities or engaging in actions aimed at defrauding 3rd parties. A simplified stock company must have a Shareholders General Assembly as the highest corporate body and a legal representative. It can have a board of directors if shareholders require it. A minimum of one shareholder is required and there is no maximum requirement.

Article 261 of the National Development Plan 2022-2026 (Law 2294 of 2023) of the current government modified the simplified stock companies’ regime (Law 1258 of 2008) in order to authorize these types of companies to be issuers of securities, under the terms and conditions determined by the National Government through the Ministry of Finance and Public Credit. However, as of this date, the regulation for the issuance of securities by simplified stock companies has not been enacted, hence, the authorization granted for these purposes has not yet entered into force.

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

A company in which at least 2 partners run their business under a common business name and are liable for all the partnership's debts to the full extent of their assets. Company does not need to have any registered capital. Monetary contributions of the shareholders to the company are voluntary. Each partner has a right to manage a partnership within the guidelines agreed by partners. 1 or more partners may, however, be entrusted with management responsibilities. All decisions are made jointly by all partners, unless articles of association stipulate that a majority vote is sufficient. Transfer of ownership interest is currently forbidden (may be inherited or may pass to a successor in title if permitted by the memorandum of association).

Limited partnership (komanditní společnost, k.s.)

A company with 1 or more partners who are liable for the debts of the company to the full extent of their assets (unlimited partners), and 1 or more partners who are liable for the debts of the company up to the amount of their unpaid capital contributions (limited partners). A limited partner must contribute to the registered capital of a company in the amount provided for in the partnership contract. Unlike unlimited partners, limited partners are able to transfer their ownership interests. The limited partner must provide a monetary contribution.

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

Separate and distinct legal entity. Managed by 1 or more managing directors who are responsible for making major business decisions and overseeing general affairs of a corporation as well as the day-to-day operations of a stock corporation. One of the most common types of company in the Czech Republic. Registered capital consists of contributions by shareholders who are jointly and severally liable for the debts of a company up to the amount of the sum of their unpaid contribution to the registered capital. The company is liable for its debts to the full extent of its assets. A supervisory board may also be established; however, it is not mandatory.

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

Separate and distinct legal entity. Registered capital consists of shares with a certain nominal value. It is liable for its debts to the full extent of its assets. The governance system may be 2-tier with a board of directors (představenstvo) and supervisory board (dozorčí rada) or single-tier with an administrative board (správní rada).  The company may issue registered or bearer shares. Bearer shares can be, however, issued only as dematerialized shares registered by the securities depository.

Limited liability company (Kapitalselskab)

There are 3 types of limited companies: public limited companies, private limited companies and limited partnership companies. They are all separate and distinct legal entities. A limited liability company is owned by the shareholders, and the shareholders' meeting is the ultimate authority of the company. However, the shareholders mainly control the company by instructing and supervising the board of directors and/or the general manager. In general, only the company is liable to creditors for corporate debts, and once the share contribution has been paid, the shareholders have no obligation to contribute further to the capital of the company.

Joint Stock Company (JSC)

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

Limited Liability Company (LLC)

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

One-Person Company (OPC)

• Newly introduced to the Egyptian market (Law No. 4 of 2018 amending the Companies Law).
• Formed by a sole founder, who can be either a natural or a juridical person.
• An OPC's equity cannot be listed or traded on any stock exchange.
• An OPC cannot issue bonds or other financial debentures that are offered to the public.
• Similarly to a JSC and LLC, there are generally no restrictions on foreign ownership except for activities that foreigners are prohibited from participating in (eg, commercial agency, importation activities for trading purposes and acquiring land and/or real estate in Sinai).
• Managed through the founder (ie, sole proprietor) of the company or 1 or more appointed manager(s).
• Companies Law states that the rules governing the LLC are applicable to an OPC, unless otherwise provided.

JSC, LLC and OPC collectively to be called "corporate entities" or "corporations" in some provisions in this guide.

Corporate entities are subject to the Companies Law. The Companies Law regulates, inter alia, the operations of the company's corporate bodies such as the board of directors/managers, the general assembly and the matters related to the management and control of the company.

Further, depending on the type of the undertaken activities, Corporate entities may be established under the Investment Law No. 72 of 2017 and Executive Regulations in accordance with the Prime Minister's Resolution No. 2310 of 2017 (the Investment Law). In such case, the Companies Law would apply to the extent that the Investment Law is silent to a certain matter. 

There are other entity types in Egypt but the ones listed above are the most commonly used.

Branch of a Foreign Corporation (Branch)

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

Representative Office (RO)

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

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

Limited Liability Company (Osakeyhtiö, Oy)

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

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

Société par actions simplifiée (SAS)

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

• The law does not impose a particular management structure for the SAS; the president is the only compulsory corporate body
• There is greater freedom for organizing the management and operating structures of an SAS and
• The SAS does not have access to the capital markets and its shares cannot be listed on a stock exchange.

Société à responsabilité limitée (SARL)

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

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

Société anonyme (SA)

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

Branch of a foreign company

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

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

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

• A branch is a mere emanation of the parent company in France, with no legal existence or distinct assets or liabilities and
• A subsidiary is an independent entity with its own legal existence, bylaws and capital contributions.
• As a consequence, the parent company:
• Has unlimited liability for any debts and liabilities incurred by the branch in France and
• Has limited liability for the debts and liabilities incurred by its subsidiary (provided that the subsidiary is not incorporated under the form of a partnership, ie, SNC or civil company) in case it becomes insolvent (ie, limited to its initial capital contribution and the amount of any shareholder's loan which cannot be reimbursed within the context of a liquidation due to insufficiency of assets).

GmbH – limited liability company

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

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

Societe anonyme (S.A.)

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

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

Directors are elected by the general meeting of the shareholders of the company.

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

Limited liability company (L.L.C.)

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

Private company (P.C.)

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

Limited private companies

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

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

Private company limited by shares (Zrt.)

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

A Zrt. is established with a predetermined amount of share capital. Such share capital is represented by shares with a face (par or nominal) value. The shares may be issued either as printed shares or dematerialized (ie, e-shares registered on a securities/investment account).

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

Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the Zrt. Shareholders may also decide to appoint a single director instead of a board to perform the duties of the board of directors (references to “board of directors” throughout this guide should be interpreted accordingly).

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

Limited liability company (Kft.)

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

A Kft. is established with a predetermined amount of initial capital provided by its quotaholders. Equity contribution of such quotaholders is not – and must not be – embodied in any negotiable instrument (eg, share certificate). It is rather an abstract membership interest called business quota ( üzletrész). A business quota may be split into several smaller business quotas, and a quotaholder can own more than 1 business quota (each of which can be transferred or encumbered separately). Liability of the quotaholders is limited to their capital contributions.

Managed by managing directors appointed by quotaholders. Shareholders may also decide to set up a board of directors instead of appointing 1 or more individual managing directors (references to “managing directors” throughout this guide should be interpreted accordingly). Company managers (who must be employees of the company) may also be appointed by quotaholders to assist managing directors in the day-to-day operations of the corporation.

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

Private limited company

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the company, subject to the Articles of Association of the company, and within the provisions of the Companies Act, 2013. Directors are elected by the shareholders of the company.

Limited liability company

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

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

Private company limited by shares (LTD)

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

External company

A company with limited liability incorporated under the laws of another jurisdiction and which establishes operations in Ireland is obliged to register as an external company (ie, a branch) in certain circumstances. The requirement to register a branch generally arises where the Irish operations of the foreign company has:

• A physical place of business
• The appearance of permanency
• A person to manage the place of business and

• Authority to independently negotiate and contract directly with 3rd parties on an independent basis

From an Irish perspective, the branch is not a separate legal entity to the "home" or "parent" company.

Company

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

Branch / representative office

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

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

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

• A sole director or
• A board of directors, composed by 2 or more members or
• Two or more directors acting jointly or severally

Directors can also be quota-holders. Directors are elected by the quota-holders with a proper decision.

Registered branch

This form is often used by foreign companies seeking to gain presence and do business in Japan without establishing a subsidiary. A foreign company must appoint at least 1 representative in Japan.

Kabushiki-Kaisha (KK)

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

Godo-Kaisha (GK)

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

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

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

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

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

Special limited partnership (Société en commandite spéciale or SCSp)

Largely inspired by the Anglo-Saxon limited partnership regimes, the special limited partnership has been designed to bolster Luxembourg’s position as the main alternative investment fund structuring hub in the EU at a time when the manager regulation is seen as a potential substitute for product regulation. With no legal personality, the SCSp is formed by written agreement – a limited partnership agreement – for a limited or unlimited duration, between 1 or more general partner(s) (associés commandités) jointly and severally liable for the partnership's commitments and 1 or more limited partner(s) (associés commanditaires) whose liability does not extend beyond their commitment. High level of contractual freedom and structuring flexibility characterize the SCSp as most of the relevant provisions applicable to the SCSp may be contractually set forth in the limited partnership agreement.

To start a business in Malaysia, the 1st step is to set up a business entity with the Companies Commission of Malaysia. There are 2 types of business entities:

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

The unincorporated entities are:

• Sole proprietorship and
• Partnership.

A sole proprietorship is an entity with 1 person, whereas a partnership is a business entity that is owned by at least 2 persons but not more than 20 persons. Both the sole proprietorship and partnership do not constitute separate legal entities, and the business partners can sue and be sued in their personal names. A business owner or partners are exposed to personal risks and liabilities.

The incorporated separate legal entities are:

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

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

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

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

• Limited liability partnerships and

• Variable capital company

Companies are categorized between private companies and public companies.

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

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

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

S.A. de C.V.

Separate legal entity, independent from its shareholders. 2 shareholders are required at all times. Shareholders’ meetings are the supreme organ of the corporation. Managed by a board of directors or a sole administrator, which is responsible for taking major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors or the shareholders’ meeting.

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

Separate legal entity, independent from its partners. 2 partners are required at all times. Partners’ meetings are the supreme organ of the company. Managed by a board of directors or a sole administrator, which is responsible for taking major business decisions and overseeing the general affairs of the company. Directors are elected by the partners of the company. Officers, who run the day-to-day operations of the company, are appointed by the directors or the partners’ meeting.

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

Separate legal entity, independent from its shareholders. 2 shareholders are required at all times. Shareholders’ meetings are the supreme organ of the corporation. Managed by a board of directors, which is responsible for taking major business decisions and overseeing the general affairs of the corporation. Directors are elected by the shareholders of the corporation. Officers, who run the day-to-day operations of the corporation, are appointed by the directors or the shareholders’ meeting.

Branch office

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

B.V. (private company with limited liability)

Separate and distinct legal entity. Managed by a board of directors, which is responsible for making major business decisions, overseeing the general affairs and running the day-to-day operations of the BV. Directors are appointed by the shareholders of the BV. A BV can have a supervisory board to supervise the policies of the board of directors and the general course of affairs of the BV and its affiliated business. It is also possible to create a so-called 1-tier board, consisting of executive and non-executive directors.

Co-operative U.A.

Separate and distinct legal entity. Managed by a management board, which is responsible for making major business decisions, overseeing the general affairs and running the day-to-day operations of the co-operative. Directors are appointed by the members of the co-operative. A co-operative can have a supervisory board to supervise the policies of the management board and the general course of affairs of the co-operative and its affiliated business. It is also possible to create a so-called 1-tier board, consisting of executive and non-executive directors.

C.V. (a limited partnership)

A CV is not a legal entity under Dutch law. It is a partnership agreement between 1 or more general partners and 1 or more limited partners. The general partner has overall management and day-to-day responsibility. The partnership agreement can provide for the possibility that the partners elect a management committee, which will manage the day-to-day business activities of the CV and carry out the business and activities of the CV on behalf of the general partner in accordance with the power granted to them by the general partner.

Limited liability companies

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

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

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

Branch

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

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

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

• Company limited by shares (private/public company)

• Unlimited company (private/public)

• Company limited by guarantee

• Limited liability partnership

• Limited partnership

• Business names incorporated

• Trustees

Private limited liability companies (private LLCs)

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

Public limited liability companies (public LLCs)

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

Partnerships with unlimited liability

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

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

Corporation (Sociedad Anónima or S.A.)

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

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

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

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

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

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

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

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

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

The management of a S.R.L. is entrusted to 1 or more managers (whether partners or not), who shall represent it in all matters relating to its company purpose. The managers are prohibited to engage (for their own account or for the account of others) in the same type of business that corresponds to the company purpose.

Branch of a Foreign Legal Entity (Sucursal)

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

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

Subsidiary

A subsidiary is a domestic stock corporation, either wholly or partially owned (but controlled) by a foreign corporation. It has a separate and distinct legal entity from its parent. It is managed by its board of directors, which exercises all corporate powers, conducts all business and controls all property of the corporation.

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

Branch office

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

Representative office

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

Regional or area headquarters

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

Regional operating headquarters

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

Partnership

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

One Person Corporation

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

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

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

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

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

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

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

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

• Commercial companies (limited liability companies and joint-stock companies, in the future also simplified joint-stock companies)
• Partnerships (general partnerships, professional partnerships, limited partnerships and limited joint-stock partnership)
• Branch offices of foreign companies
• Representative offices of foreign companies

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

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

• Limited liability companies by quota (or Sociedade por Quotas).

LDA. Companies

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

The share capital in these companies is divided in quotas^[1]. As a rule, and upon incorporation, each shareholder has 1 single quota, which nominal value may vary from EUR1 to any given amount. Consequently, the minimum share capital of LDA. companies is EUR2, and for the Sociedade Unipessoal sub-type, the minimum share capital is EUR1.

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

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

• General Meeting (which in the case of a Sociedade Unipessoal is assured by the sole shareholder)

• 1 or more directors.

• These companies are also required to enroll 1 accountant (TOC).

Additionally, 1 Independent Auditor (Revisor Oficial de Contas) or a Supervisory Board (Conselho Fiscal) is required should, for a period of 2 years, any 2 of the following thresholds are met:

• Balance exceeds EUR1.5 million.

• Total turnover and other revenue of at least EUR3 million.

• Average number of 50 or more employees.

S.A. Companies

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

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

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

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

1) Portuguese “traditional” system:

• General meeting
• 1 director (provided the share capital remains below EUR200,000), or a board of directors (more than 1 member and not necessarily in an odd number)
• Supervisory body, which may be:

  • 1 Independent Auditor (plus its substitute; both the auditor and the substitute must be chartered accountants or a chartered accountants’ firm), or

  • A supervisory board (minimum of 3 members plus 1 substitute; at least 1 of the effective members must be a chartered accountant or a chartered accountants’ firm), plus a chartered accountant or a chartered accountant firm (mandatory for Stock Exchange listed companies)

2) 2-tier system:

• General meeting
• A 2-tier board structure comprising: (i) 
• the general and supervisory board and (ii) the 

•  executive board of directors or 1 executive director (provided the share capital remains below EUR200,000).

• 1 independent auditor

3) 1-tier system:

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

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

Corporations

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

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

Limited Liability Companies

Limited liability companies (LLCs) are becoming the preferred method of doing business in Puerto Rico. LLCs may be organized by any natural or legal person by filing articles of organization (also referred to as the certificate of formation) in the Puerto Rico State Department. LLCs offer their owners the same limited liability protection granted by law to corporations and the flexibility to manage their internal affairs as a partnership, corporation or a combination of both in accordance with an LLC agreement (also referred to as an operating agreement), which typically governs the entity.

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

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

Joint stock company (JSC)

It is a separate and distinct legal entity. A JSC may be managed by:

• 1 or more directors (forming a board of directors), with the possibility of management delegation, in the 1-tier system; directors are appointed by the general meeting of shareholders while managers are appointed by the board of directors or
• An executive board and a supervisory board in the 2-tier system; members of the executive board are appointed by the supervisory board; members of the supervisory board are appointed by the general meeting of shareholders.

Generally, if a JSC is managed in a 1-tier system, a sole director/board of directors represent(s) the company through its president. Under the 2-tier system, representation power is exercised by members of the executive board.

Special provisions apply in case of public listed companies.

Limited liability company (LLC)

It is a separate and distinct legal entity.

An LLC may be managed by 1 or more directors, appointed by the general meeting of shareholders.

A company is represented by its directors.

Joint-stock company (public and non-public)

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

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

The company may also opt to have 2 or more managing directors who may act separately or jointly.

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

Limited liability company

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

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

The company may also opt to have 2 or more managing directors who may act separately or jointly.

Limited liability company

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

Limited liability company 

Separate and distinct legal entity with limited liability for its members. The business of a company shall be managed by, or under the direction or supervision of, a board of directors, which is responsible for making major business decisions and overseeing the general affairs of the company. Appointment of directors is generally left to the company's constitution as the Companies Act 1967 of Singapore (CA) does not prescribe the manner in which directors are to be appointed and they are typically nominated by the shareholders of the company. The favorable 1-tier corporate taxation regime proves to be advantageous to shareholders.

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

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

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

Joint-stock company (Jusik Hoesa)

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

Limited company (Yuhan Hoesa)

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

Branch (Sucursal)

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

Limited liability company (Sociedad Limitada)  

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

Joint-stock company (Sociedad Anónima)

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

Limited company (aktiebolag or AB)

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

Trading partnership (handelsbolag, HB)

Under the Partnership and Non-registered Partnership Act (Handelsbolagslagen), a trading partnership (Handelsbolag or HB) is constituted by an agreement between 2 or more individuals and/or legal entities to conduct business in association. The HB's most frequently cited advantage is its flexibility. Partners are free to organize their relations as they see fit without the restraints of a corporate form. Within the framework of an HB, complex structures can be set up to allow for many different characteristics and circumstances. The partners in an HB are personally liable for the partnership's agreements and debts.

Limited partnership (kommanditbolag or KB)

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

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

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

Branch office (filial, Branch)

A branch (Filial) is the branch office of a foreign company with a separate management in Sweden. A branch is not a separate legal entity. A foreign company may only have 1 branch in Sweden. A branch has no independent capital, and its assets and liabilities are a part of the total assets of the foreign company.

Stock corporation

Legal form intended for large-sized companies with high capital requirements, but also popular among smaller companies. Managed by a board of directors, which is elected by the general meeting of shareholders. The articles of incorporation may limit the transferability of a company’s shares.

Company limited by shares

A company limited by shares must carry on a profit-seeking business and is a separate and distinct legal entity whereby its capital is divided into shares. A foreign investor must file a foreign investment application (FIA) with the Investment Commission and upon approval incorporate an FIA company in Taiwan.

Closely-held company limited by shares

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

Limited company

A limited company is owned by members whose respective ownerships are stated in terms of the amount of the members' capital contributions. A foreign investor must file an FIA with the Investment Commission and upon approval incorporate a limited company in Taiwan. A limited company has fewer corporate formalities than a company limited by shares. For example, a limited company does not have shareholders' meetings.

Branch office of a foreign company

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

Private limited company

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

Public limited company

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

Partnerships

There are 3 types of partnerships:

• Unregistered ordinary partnership (all partners are jointly and severally liable).
• Registered ordinary partnership (a partnership becomes a legal entity, separate and distinct from individual partners; all partners are jointly and severally liable for all obligations of a partnership).
• Limited partnership (partnership becomes a legal entity, separate and distinct from individual partners). Limited partnerships are comprised of 2 types of partners:
  • Partner(s) whose liability is limited to the amount of their capital contribution and
  • Partner(s) who are jointly and unlimitedly liable for all obligations of a partnership.

Joint-stock company (JSC)

Capital company with a legal personality. General assembly of shareholders is the highest decision-making body in a JSC. Power to manage business and affairs of a JSC is vested in its board members. Board members act as a corporate body and may have 1 or more members. Board members are not required to have a share in the company. Board members can transfer their duties and authorities to 1 or more director or a 3rd party.

Limited liability company (LLC)

Capital company with a legal personality. General assembly of partners is the ultimate decision-making body in LLC. Management rights and duties of LLC are conferred to the managers. At least 1 partner must have management rights and representation power of an LLC as a manager. It is also possible to appoint 3rd-party individuals, who are not partners of the LLC, as managers.

Other business forms
Branch offices (BO)

BOs may carry out the business their principal company is conducting and freely enjoy the right to pursue commercial activities. A foreign principal company remains liable for all debts of the BO. BOs have autonomous capital and accounting to carry out commercial transactions with 3rd parties, although they are closely associated with the principal company in respect of internal management. This means that rights, debts, profits and losses of the BOs are assumed by the principal company. A BO can only engage in activities of its principal company. Although there is no legal capital requirement for BOs, it is required that the principal company maintains capital that is sufficient to run the BO in practice.

Liaison Offices (LO)

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

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

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

Limited Liability Company (LLC)

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

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

From January 2023, LLC may choose to keep the shares records in the companies register as before or switch to the accounting system of shares maintained by the Central Depository in the manner established by the National Securities and Stock Market Commission (the Securities Commission) . The Securities Commission adopted the procedure for maintaining the accounting system for shares of limited liability company and additional liability company, approved by Securities Commission's decision No. 525 dated May 17, 2023 (shares accounting system), which became effective on January 1, 2024.

In order to switch to the new accounting system the following steps should be taken:

1. Taking a unanimous decision of a general meeting of participants to switch to the shares accounting in the shares accounting system with respect to all shares;
2. Entering into an agreement with the Central Depository regarding the shares accounting in the shares accounting system;
3. Submitting necessary documents to the Central Depository.

The Central Depository shall submit to the Ministry of Justice of Ukraine an application in electronic form for the state registration of information on accounting of company's shares in the shares accounting system no later than 3 working days after (i) receiving duly executed documents; and (ii) signing the agreement regarding shares accounting in the shares accounting system.   

Joint-Stock Company (JSC)

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

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

It is also possible to establish an entity in 1 of the free zones in the UAE. Entities registered in a free zone can be wholly foreign owned and no UAE participation is required. The free zone entity can take the form of a free zone limited liability company (FZ-LLC) or a free zone branch office (FZ-Branch).

LLC

Separate and distinct legal entity with limited liability.

Federal Decree-Law No. 32 of 2021 on Commercial Companies was enacted to replace the previous companies’ law and to allow foreign investors to own 100 percent shares in UAE companies without requiring a UAE national partner, except for specific business activities and sectors. Each Emirate’s Department of Economic Development has a list of approved business activities for foreign companies.

The UAE actively encourages investment in growing sectors, such as fintech, e-commerce, agritech, healthcare, education, tourism, space, logistics services, ICT, manufacturing, medical tourism, renewable energy, media and entertainment, creative industries, gaming and smart cities. However, full ownership of companies within these sectors is subject to regulations of the respective governing bodies.

Branch

A branch is not regarded as a separate entity but treated as an extension of its parent company. Currently pursuant to the recent changes in the UAE law, a branch no longer requires a UAE national or a company wholly owned by UAE nationals to act as its national agent (colloquially known as a "sponsor" and is not to be confused with a commercial agent).

FZ-LLC

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

FZ-Branch

A Branch is not regarded as a separate entity but treated as an extension of its parent company.

Dual License Branch

A dual licence branch is a branch of an FZ-LLC registered in mainland UAE. It is not treated as a separate entity but treated as an extension of its parent company. Establishing a dual licence branch is possible in the case of FZ-LLCs registered in certain free zones only. Also, dual licences are only issued for FZ-LLCs conducting professional services – trading activities are not typically included on dual licences. It may operate from the same office as its parent company without the need for a separate registered address.

Private limited company

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

Public limited company

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

Limited liability partnership

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

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

Registered UK establishment

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

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

C corporation

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

S corporation

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

Limited liability company (LLC)

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

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

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

Joint stock company (JSC)

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

Limited liability company with 2 or more members (LLC2)

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

Limited liability company with 1 member (LLC1)

• Only 1 member is required, either an individual or a legal entity.
• Generally, no personal financial liability of a member as it is limited to its capital contribution in an LLC1.
• Company's earnings are subject to corporate income tax, but the sole member (either a corporate or an individual) is not taxed on any distributed profits.
• Typical corporate documents generally include:
  • Enterprise Registration Certificate (ERC)
  • Charter (usually called the articles of incorporation in certain jurisdictions) and
  • Decisions of the sole member, which may be made directly by a member or indirectly through either the member’s council or the company president.
• Either the member’s council or the company president has overall management responsibility. The General Director (or CEO) has day-to-day management responsibility.
• Member contributes capital to the charter capital of the LLC1 or purchase paid capital contribution from the former member.
•  Where the company owner is a legal entity, its distributed profits would be included in its tax finalization return (corporate income tax) at the end of the relevant fiscal year.

Partnership

• At least 2 unlimited liability partners (only individuals) and no restriction to the maximum number; no restriction to the minimum and maximum number of limited liability partners.
• Generally, no personal financial liability of limited liability partners as it is limited in their capital contributions in the partnership. However, unlimited liability partners are liable for the obligations of the partnership to the extent of all of their assets.
• Earnings of a partnership are subject to corporate income tax and partners (only individuals) are taxed on any distributed profits.
• Typical corporate documents generally include Enterprise Registration Certificate (ERC), charter (which is usually called articles of incorporation in certain jurisdictions), decisions of the Partners' Council and capital contribution certificates.
• Partners' Council has overall management responsibilities; unlimited liability partners have day-to-day management responsibilities.
• Partners contribute capital to the charter capital of a Partnership. The limited liability partners can purchase paid capital contribution in the Partnership from former limited liability partners.
• Individual partners are required to file tax returns (personal income tax) with local tax authorities upon receiving profits (where they would like to submit a self-declaration of their tax). With respect to corporate limited liability partners, the distributed profits would be included in their tax finalization returns (corporate income tax) at the end of the relevant fiscal year.

Private enterprise

• Only a sole individual owner
• The owner has personal liability for all activities of the private enterprise to the extent of all of their assets.
• Earnings of an enterprise are subject to corporate income tax, but the sole individual owner is not taxed on any distributed profits
• Typical corporate documents generally include an Enterprise Registration Certificate (ERC) and internal rules issued by the owner.
• Owner has overall and day-to-day management responsibilities.
• Owner registers the investment capital of a private enterprise.