Corporation (Sociedad Anónima or SA)

• 2 or more shareholders
• The local management is in charge of a board of directors, which may have at least 1 member with no maximum number (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between 1 and 3 years in office, as provided in the bylaws. They may be re-elected. The majority of the board of directors must be composed of Argentine residents.
• The president of the board is the legal representative of the company
• Statutory auditor is optional. Mandatory if capital stock exceeds ARS50 million
• Typical charter document: bylaws
• Corporate Books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and attendance records book
• Should cash be paid out as consideration for the stock: only 25 percent must be paid up front, and the balance is paid within 2 years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

Single-Shareholder Corporation (Sociedad Anónima Unipersonal or SAU)

• Only 1 shareholder
• The local management is in charge of a board of directors, which may have at least 1 member with no maximum number (at least 3 directors and 1 alternative director in case the company's capital stock exceeds ARS50 million). Directors shall last between 1 and 3 years in office, as provided in the bylaws. They may be re-elected. The majority of the board of directors must be composed of Argentine residents
• The president of the board is the legal representative of the company
• Permanent control by government
• Statutory auditor is mandatory (at least 1 regular and 1 alternate statutory auditor)
• Typical charter document: bylaws
• Corporate books: stock ledger, shareholders' meeting minutes, board of directors' meeting minutes and attendance records book
• Capital stock shall be fully paid up upon execution of bylaws
• SAUs are not allowed to be incorporated or wholly owned by another SAU

Simplified Corporation (Sociedad por Acciones Simplificada or SAS)

• 1 or more shareholders
• The managers must be individuals, who may be appointed for an indefinite period. At least 1 director must be an Argentinean resident (provided that the Argentinian resident director is the legal representative of the company)
• Statutory auditor is optional
• Corporate books: carried by electronic means (stock ledger, minutes and attendance records book)
• Should cash be paid out as consideration for the stock: only 25 percent needs to be paid up front, and the balance is paid within 2 years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

• 2 or more members
• The local management is in charge of single or several managers with full powers who may act individually, or a board of managers acting by majority. Managers may be appointed for an indefinite term. The majority of the board of managers must be composed of Argentine residents
• The legal representative of the company may be a single manager. All managers or a president of the board of managers are entitled with full powers
• Statutory auditor is optional. Mandatory if capital stock exceeds ARS50 million (at least 1 regular and 1 alternate member)
• Typical charter document: bylaws
• Corporate books: manager and quotaholders’ meeting minutes.
• Should cash be paid out as consideration for the stock: only 25 percent must be paid up front, and the balance is paid within 2 years after that. When considerations for the stock are contributions in kind, the stock must be fully paid off at the time of subscription of the shares.

Branch

• To establish a branch, the foreign company must be registered with ASIC and assigned an Australian Registered Body Number (ARBN).
• A branch is not a separate legal entity. The foreign company has full legal responsibility for the actions of the Australian branch.
• Must appoint at least 1 local agent.
• The local agent is responsible for the foreign company's compliance with the Corporations Act and may be personally liable for any breaches or penalties.
• Must maintain a registered office in Australia.
• Taxed as a separate entity in Australia; taxed on all income sourced from Australia.
• Foreign Investment Review Board approval may be required before agreements to acquire shares, assets or real property can be entered into.

Proprietary company

• Must have at least 1 but no more than 50 shareholders, excluding employee shareholders.
• Generally, no personal liability of the shareholders beyond the amount agreed to be subscribed for shares.
• Taxed on its earnings at the corporate level; can frank dividends distributed to shareholders.
• Usually has a constitution setting out operational procedures.
• Board of directors has overall management responsibility.
• Shareholders purchase shares in the company at an issue price per share which is generally determined by the board of directors from time to time by reference to their directors' duties. May have numerous classes of shares.
• Cannot engage in fundraising activities that would require disclosure to investors under the Corporations Act (eg, requiring a prospectus to be issued).

Public company

• Must have at least 1 shareholder, but there is no maximum.
• Generally, no personal liability of the shareholders beyond amount agreed to be subscribed for shares.
• Taxed on its earnings at the corporate level; can frank dividends distributed to shareholders.
• Usually has a constitution setting out operational procedures.
• Board of directors has overall management responsibility.
• Shareholders purchase shares in the company at an issue price per share which is generally determined by the board of directors from time to time by reference to their directors' duties. May have numerous classes of shares.
• Can offer shares to the public, but must comply with requirements of the Corporations Act, including issuing a disclosure document, such as a prospectus.

Note: In addition to the above, there are other legal entities that can be established under Australian law, such as unlimited liability companies, companies limited by guarantee and no-liability companies. However, these are very rarely used for business purposes and are not considered further.

Stock corporation (Aktiengesellschaft or AG)

• In theory, unlimited number of shareholders (limited only by the number of shares as 1 share must correspond to at least EUR1).
• Generally, there is no personal liability of the shareholders.
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends.
• Minimum stated capital: EUR70,000; 1 share must at least correspond to EUR1.
• Two-tier board system: the management board is responsible for the day-to-day management, the supervisory board supervises management and grants its consent (in some cases mandatory) to certain business and transactions.
• Typical charter documents include: articles of incorporation, standing orders and organizational resolutions by the management board, the supervisory board and the AGM/EGM. Shares must be registered shares (except for listed entities which must (in nearly all instances) have bearer shares); therefore, a share register is required.

• Shareholders typically purchase stock in the corporation. Usually common stock but rarely preferred stock.

  Annual financial statements must be audited by an auditor and filed with Austrian companies registry.

Limited liability company (Gesellschaft mit beschränkter Haftung, GmbH)

Unlimited number of shareholders allowed (limited only by the number of shares since 1 share must at least correspond to EUR70).

Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends Minimum stated capital: EUR35,000; 1 share must at least correspond to EUR70.

One-tier management or two-tier board system, depending on the size of the company: the management is responsible for the day-to-day management; the supervisory board, if established, supervises management and grants its consent (in some cases mandatory) to certain business and transactions.

Typical charter documents include:

Articles of incorporation
Standing orders and

Organizational resolutions by the management board, if applicable, the supervisory board and the AGM/EGM.

The shares of each shareholder is registered with the Austrian companies registry.

Depending on the size (established by the balance sheet total, turnover and number of employees), annual financial statements must be audited by an auditor and filed with the Austrian companies registry.

With Limited Liability (WLL)

• No minimum or maximum number of shareholders.

• Shareholder's liability limited to their share in the capital.

• May not engage in the business of insurance and banking on behalf of other parties.

• Parties may not issue any shares, negotiable warrants or debentures to the public.

• Capital must be divided into shares of equal value.

• A percentage of the profits of the WLL must be set aside each year for depreciation.

• Ten percent of the profits thereafter must be set aside to build-up a compulsory reserve until the amount of the reserve equals 50 percent of the capital of the company.

Closed Shareholding Company (BCS(c))

• Incorporated with no fewer than 2 shareholders.

• Shares cannot be offered to the public.

• Allowed to carry out banking and insurance activities.

• Minimum capital of BHD 250,000 divided into equal shares.

Foreign Branch (Branch)

• The competent department at the Ministry of Industry and Commerce (MOIC) shall maintain a special register to enter the names of the foreign companies incorporated abroad and undertaking its activities in Bahrain.

• Legally regarded as part of its parent company (no separate legal identity).

• Activities limited to those of its parents, as stated in its parents’ objects.

Public limited company (société anonyme/naamloze vennootschap)

• At least 1 incorporator (natural person or legal entity) -– unlimited number of shareholders

• Limited liability of the shareholders
• Subject to corporate income tax
• Typical charter documents include:
  • Articles of incorporation
  • Bylaws
  • Shareholders' resolutions
  • Board resolutions and
  • Share register
• Subject to the board structure that is chosen (ie, monistic or dualistic), the board of directors or the sole director has the overall management responsibility. In the dualistic board structure, the board of supervision has the reserved competences, and the executive board has the residual as well as the operational competences

• Shares are freely transferable

• Different types of stock may be issued (eg, shares with or without voting rights, profit sharing certificates or stock options) – can issue financial instruments such as bonds
• Annual accounts to be filed with the National Bank of Belgium

Limited company (société à responsabilité limitée/besloten vennootschap)

• At least 1 incorporator (natural person or legal entity) – unlimited number of shareholders
• Limited liability of the shareholders
• Subject to corporate income tax
• Typical charter documents include:
  • Articles of incorporation
  • Bylaws
  • Shareholders' resolutions
  • Board resolutions and
  • Share register

• Every director has the authority to conduct all acts which are necessary or useful to realize the limited company's corporate purpose, unless the articles of association provide otherwise or unless the law provides that such acts are the exclusive responsibility of the general meeting. Daily management may be attributed to 1 or more persons acting alone, jointly or as a college

• Shares are not freely transferable (unless the articles of associations provide otherwise) – form less used for joint ventures

• Different types of stock may be issued (eg, shares with or without voting rights or stock options) – can issue financial instruments such as bonds

• Annual accounts to be filed with the National Bank of Belgium

Belgian branch office of a foreign company

• The competent corporate body of a foreign company may decide to open a Belgian branch office
• No separate legal entity; therefore, the foreign company shall be liable for all the obligations entered into
• Physical existence in Belgium for a branch office in which a foreign company carries out its activities
• Presence in Belgium of a legal representative who may bind the foreign company
• Regular exercise activities in Belgium
• Various documents related to the foreign company must in principle be translated into one of the official Belgian languages and filed with the clerk's office of the competent enterprise court, such as the deed of incorporation or the latest version of the articles of association
• A legal representative must represent the foreign company in Belgium
• The (consolidated) annual accounts of the foreign company must, on an annual basis, be filed with the National Bank of Belgium

Although the Brazilian Law sets forth other types of companies, the Brazilian companies usually adopt the form of a limited liability company, (Sociedade Empresária Limitada) or of a corporation, (Sociedade Anônima).

Limited liability company (Sociedade Limitada)

• A Sociedade Limitada may have one or more quotaholders
• Capital divided into quotas. The ownership of quotas and any burden over such quotas are reflected in the articles of organization. It is possible to issue preferred quotas
• In principle, the liability of the quotaholders is limited to the total subscribed capital which has not been paid in by them
• Managers (quotaholders or not) are responsible for the day-to-day management of the company's business and for representing the company before third parties
• A Sociedade Limitada can also have a Board of Directors, with overall management responsibility;
• An annual meeting shall be held by the quotaholders in the first 4 months after the end of the previous fiscal year in order to approve the management's accounts as well as the company's balance sheet and economical results
• No public subscription or participation in the capital is allowed and a Sociedade Limitada cannot publicly trade its quotas or list on a stock exchange
• Taxed on its profits and gross revenues at a corporate level and quotaholders are exempt from income tax on dividend distribution

Note: Pursuant to the enactment of Law No. 13.874/19, which converted Provisional Measure No. 881/2019 into law and instituted the Declaration of Economic Freedom Rights, the Sociedade Limitadas were allowed to be incorporated by a sole quotaholder. Prior to such law, Brazilian Civil Code established that a Sociedade Limitada should have a minimum of two quotaholders.

 

Corporation (Sociedade Anônima)

• A Sociedade Anônima must have at least two shareholders. Exception is made to the incorporation of a whole owned subsidiary (sole shareholder company) provided that the incorporation must be made through a public deed and the sole shareholder must be a Brazilian company.
• Capital divided into shares. Different classes of shares allowed
• Generally, the ownership of shares and any burden over such shares are reflected in the corporate books
• The liability of the shareholders is limited to the total subscribed capital which has not been paid in by them
• Typical charter documents include: bylaws, minutes of shareholders' general meetings, resolutions of the board of officers and board of directors, corporate books
• Board of directors, if existing, has overall management responsibility; officers have day-to-day responsibility
• Shareholders typically subscribe and pay for stock issued by the corporation, either common or preferred
• An annual meeting shall be held by the shareholders in the first 4 months after the end of the previous fiscal year in order to approve the management's accounts and the corporation's financial statements
• A Sociedade Anônima may be a publicly traded company and offer its securities for sale to the general public
• Taxed on its profits and gross revenues at a corporate level and shareholders are exempt from income tax on dividend distribution

Corporate subsidiary

Corporation form (limited liability corporation)

• Incorporate under either federal or provincial/territorial law
• Most foreign businesses choose this form rather than branch office
• Certain industries are subject to specific legislation and must incorporate under these laws (eg, banking or insurance companies)
• For corporations under federal law, 25 percent of directors must be residents of Canada. If a corporation has less than 4 directors, at least 1 director must be a resident Canadian. Certain corporations in prescribed activities require a majority of resident Canadian directors
• A number of provinces/territories have similar residency requirements for directors; some have no residency requirements
• Cannot consolidate income and loss with operations in other corporate entities for Canadian tax purposes

Flow-through form

• Unlimited liability companies (ULCs) may be created by incorporating in the provinces of Nova Scotia, British Columbia, Alberta or Prince Edward Island
• For Canadian income tax purposes, ULCs are treated as regular corporations, subject to Canadian tax on their worldwide income; however, for US tax purposes, ULCs may be treated either as partnerships or "check-the-box" flow-through entities, possibly offering cross-border opportunities

Branch (permanent establishment)

• A corporation or a foreign (ie, non-Canadian) corporation must register in each province or territory where it plans to own real property located in such province or territory or if its intended business falls under the definition of “doing business.”

• Must have a Canadian place of business or address where corporate records are kept. Books and records must also be available for audit by the Canadian Revenue Agency

• Canadian branch operations of foreign corporations are subject to Canadian federal and provincial/territorial tax on income and gains sourced in Canada (primarily income from a business carried on in Canada). The branch is required to calculate income or loss from the business carried on in Canada and may deduct expenses only in respect of that business carried on in Canada

• A 25 percent branch tax (subject to reduction under an applicable tax treaty) levied on after-tax Canadian earnings from business carried on in Canada less amounts that are re-invested in Canadian business (which is intended to mirror the 25 percent withholding tax that would be payable on taxable dividends from a Canadian subsidiary corporation). Financial and tax accounting and reporting obligations may be more complex as the branch is not a legal entity. The rate of branch tax may be reduced under certain tax treaties between Canada and the country of residence of the foreign corporation

• The parent company remains liable for debts and obligations of the branch

• It is common to create a wholly-owned subsidiary in home jurisdiction to consolidate losses from the Canadian branch operations but avoid direct liability

Note 1: The mechanics and operation of corporations are governed by the federal or provincial/territorial laws of incorporation.

Note 2: The shareholders of a federal corporation or the shareholders of most provincial/territorial corporations may enter into a unanimous shareholder agreement which provides for, among other matters, the regulation of the rights and liabilities of the shareholders, the regulation of the election of directors and the management of the business of the corporation including the right to restrict in whole or in part the powers of the directors.

Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)

• Minimum of 2 partners and maximum of 50 partners.
• 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.
• Rules for distribution of profits shall be included in the bylaws. Partners have the freedom to decide about this matter in the bylaws.
• Typical charter documents include:
  • Articles of incorporation
  • Bylaws and its amendments
  • Powers of attorney and
  • Accounting and tax records.
• Bylaws may establish different management options, such as appointing a certain partner or partners, third parties or even a board of directors.
• Equity rights may only be transferred with the unanimous approval of the partners.
• No publication of financial statements is needed.

Corporation (Sociedad Anónima or S.A.)

• Minimum of 2 shareholders.
• May be public or private. May also be special corporations.
• The liability of shareholders is limited to the amount of their contributions to capital.
• Profits distribution decision corresponds to the general ordinary shareholders’ meeting. Public corporations shall annually pay, as dividend, at least 30 percent of net profits of each fiscal year.
• Typical charter documents include:
  • Articles of incorporation
  • Bylaws and its amendments
  • Stock certificates
  • A shareholders’ registry
  • A book of minutes of shareholders’ meetings
  • A book of minutes of board of directors’ meetings
  • A book of executives and attorneys and
  • Accounting and tax records.
• 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 power to the CEO and other officers.
• No limitations to shares transfer. Restrictions may be included in the company's bylaws (not allowed in public corporations) and/or in shareholders' agreements.
• In private corporations, the shareholders' meeting shall appoint account inspectors or external auditors. In public corporations, the shareholders' meeting shall appoint an external auditing firm, which shall be registered with the CMF.

Simplified Corporation (Sociedades por Acciones or SpA)

• Minimum of 1 or more shareholders.
• The liability of shareholders is limited to the amount of their contributions to capital.
• Bylaws shall establish profit distribution agreements and what corporate body shall approve distributions. In case of silence, shareholders shall approve distributions at annual shareholders’ meetings.
• Typical charter documents include:
  • Articles of incorporation
  • Bylaws and its amendments
  • A stock certificate – however, the company’s bylaws may establish that the shares may exist without the need of issuance of a document that physically represents the shares
  • A shareholders’ registry
  • A book of minutes of shareholders’ meetings
  • If the management of the company is vested in a board of directors, meeting minutes must be kept – and
  • Accounting and tax records.
• Management is flexible. Bylaws may establish different management options, such as appointing a certain shareholder or shareholders, third parties or a board of directors.
• No limitation to shares transfer. Restrictions may be included in the company's bylaws and/or in shareholders' agreements. Bylaws may establish minimum or maximum percentages of capital to be controlled, directly or indirectly, by a 1 or more shareholders.
• Publication of financial statements, if requested by the bylaws.

Branch of a Foreign Legal Entity (Agencia)

• No minimum or maximum requirement for shareholders or partners of the parent. The parent is ruled by applicable foreign laws.
• The parent company is liable for the actions of the branch in Chile.
• No limitations on remittance of profits from the branch to the parent. Subject to compliance of tax obligations and applicable exchange rules.
• Typical charter documents include:
  • Articles of incorporation of the parent
  • Bylaws of the foreign entity
  • A certificate of good standing of the parent
  • General power of attorney granted by the foreign company to the agent who will represent it in Chile
  • A statement made by the agent and
  • Accounting and tax records.
• Managed by an agent appointed by the parent, granting them extensive powers to acts on its behalf in Chile.
• Every year, the agent shall publish the annual balance of the branch in a local newspaper within 4 months following the closing of the financial period.

Limited liability company (LLC)

• Up to 50 shareholders.
• Generally no personal liability of shareholders.
• Taxed at 2 levels (commonly referred to as double taxation). First, an LLC pays an enterprise income tax on its corporate income; then, the LLC distributes its after-tax profits as dividends to shareholders who then pay income tax on those dividends.
• Typical charter documents include:
  • Articles of association, to be registered with the Administration for Market Regulation (AMR)
  • Business license
  • For foreign-invested LLCs, additional documents such as joint venture contract or shareholders’ agreement, which are not required for registration with the Administration of Market Regulation (AMR) under the current company law, plus record on certain foreign investment information, such as the information on each investor and its ultimate actual controller, that has been reported to the Ministry of Commerce (MOFCOM).
• Shareholders typically subscribe and contribute to the registered capital of an LLC according to the articles of association.
• An annual report should be filed with the AMR through the AMR’s online platform. For foreign-invested companies, a joint annual report should, in addition, be filed with various authorities through the same AMR’s online platform for the annual report.

Company limited by shares

• There must be 2 to 200 promoters, of whom more than half must have domiciles in China.
• Generally no personal liability of shareholders.
• Taxed on its earnings at a corporate level, and shareholders are taxed on any distributed dividends.
• Typical charter documents include:
  • Promoters' agreement
  • Articles of association
  • Business license
  • For foreign-invested companies limited by shares, additional documents such as joint venture contract or shareholders’ agreement, which are not required for registration with the AMR under the current company law, plus record on certain foreign investment information, such as the information on each investor and its ultimate actual controller, that has been reported to the MOFCOM.
• Shareholders typically purchase stock in company, but generally only 1 class of stock is allowed. China allows listed or non-listed public companies (with more than 200 shareholders) to issue preferred stock on a trial basis.
• An annual report must be filed with the AMR and MOFCOM.

Partnership enterprise

• At least 2 partners; up to 50 partners for limited partnership unless otherwise provided by law.
• General partners have unlimited joint and several liability for the debts of the partnership; limited partners have liability for the debts of the partnership to the extent of the capital contributions they have subscribed for.
• Not taxed on earnings at partnership level, and profits and losses are passed through to the partners who are subject to taxes.
• Typical charter documents include:
  • Partnership agreement
  • Business license.
• Partners typically contribute money, property, intellectual property, land use right or other property right to the partnership. General partners may contribute labor services to the partnership. Partners receive an interest in profits and losses.
• An annual report must be filed with the AMR

Note: Because the LLC is the most common investment vehicle used by foreign investors, we only discuss the LLC in detail in the following sections and can provide information on other forms of entities upon request.

General partnership (Sociedad Colectiva)

• Minimum of 2 partners, and there is no maximum
• Partners have subsidiary personal liability; creditors must first pursue the General Partnership's patrimony
• At a corporate level, general partnerships are taxed based on their earnings; at a natural person's level, partners are taxed based on distributed dividends
• Private companies, meaning 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
• Incorporation must be through public deed registered by the Registry of Commerce
• Partnership board has overall management responsibility
• Partners have a veto right and can oppose any proposal, and such opposition suspends the proposed activity or project until majority vote is obtained
• Partnership board must meet by the end of every business activity and approve the company's financial statements at least once a year
• Colombian law requires any foreign investment to be declared through the Colombian Central Bank
• Colombian law does not require general partnerships to have a statutory auditor, unless the company exceeds a certain amount of assets

Limited partnership (Sociedad en Comandita Simple y por Acciones)

• 2 types of partners: managing partners (1 or more) and a limited partner (1 or more). In case of a share limited partnership, there must be at least 5 share limited partners
• Managing partners have personal liability, and limited partners have limited liability
• At a corporate level, limited partnerships are taxed based on their earnings; at a personal level, partners are taxed based on distributed dividends
• Limited partnerships are hybrid companies, meaning that, to transfer participation of a managing partner, partners of the company must agree unanimously and amend company's bylaws. On the other hand, to transfer participation of a limited partner, rest of limited partners must agree unanimously and amend  company's bylaws
• Incorporation must be through public deed registered by the Registry of Commerce
• Partnership board is the highest corporate body; managing partners have the responsibility of managing and legally representing the company
• Company's capital is composed by the limited partner's contribution. However, managing partners may also contribute to the company's capital
• Managing partners each have a vote in the partnership board. Limited partners have a number of votes that proportionally corresponds to their ownership in the company
• Partnership board must meet and approve the company's financial statements at least once a year
• Colombian law requires any foreign investment to be declared through the Colombian Central Bank
• Colombian law does not require limited partnerships to have a statutory auditor, unless the company exceeds certain amount of assets

Limited liability company (Sociedad de responsabilidad limitada)

• Must be at least 2 partners and no more than 25 partners
• Partners have no personal liability
• At a corporate level, limited liability companies are taxed based on their earnings; at a personal level, partners are taxed based on distributed dividends
• In a limited liability company, transfer of participation must be carried out through a bylaw reform, following procedures regarding pre-emptive rights
• Incorporation must be through public deed registered by the Registry of Commerce
• Partnership board is the highest corporate body
• Company's capital must be totally paid by the time of incorporation, and any modification of the capital must be established through a registered amendment to the bylaws of the company
• Partners' votes proportionally correspond to their participation in the company
• Partnership Board must meet and approve the company's financial statements at least once a year
• Colombian law requires any foreign investment to be declared through the Colombian Central Bank
• Colombian law does not require a Limited liability company to have a statutory auditor, unless the company exceeds certain amount of assets

Corporation (Sociedad Anónima)

• Must have a minimum of 5 shareholders with no maximum requirements
• Shareholders have no personal liability
• At a corporate level, corporations are taxed based on their earnings; at a personal level, shareholders are taxed based on distributed dividends
• Shareholders have pre-emptive rights to subscribe and pay shares if the Shareholders General Assembly agrees to increase its capital
• The incorporation must be through public deed registered by the Registry of Commerce
• Shareholders General Assembly is the highest corporate body, and the board of directors is the managing body. Corporations must also have a legal representative and a statutory auditor
• Company's capital is divided into stock
• Shareholders typically incorporate a corporation or may purchase shares from existing shareholders
• Shareholders of a corporation may execute a shareholders' agreement or determine certain provisions in the company's bylaws like certain rights and obligations regarding negotiation of shares, vote rights, majorities for decision-making, drag-along and tag-along rights, put and call options, deadlock solution procedures, issuance of non-voting shares, etc.
• Shareholders General Assembly must meet and approve the company's financial statements at least once a year
• Colombian law requires any foreign investment to be declared through the Colombian Central Bank
• Colombian law does require a corporation to have a statutory auditor

Simplified stock company (Sociedad por Acciones Simplificada)

• Must have a minimum of 1 shareholder with no maximum requirements
• Shareholders have no personal liability
• At a corporate level, simplified stock companies are taxed based on their earnings; at a personal level, shareholders are taxed based on distributed dividends
• Shareholders have pre-emptive rights to subscribe and pay shares if the Shareholders General Assembly approves to increase its capital
• The incorporation must be through public deed registered by the Registry of Commerce
• Shareholders General Assembly is the highest corporate body. A simplified stock company must have a legal representative and can have board of directors if shareholders prefer to
• Company's capital is divided in stock
• Shareholders typically incorporate simplified stock company or may purchase shares from existing shareholders
• Shareholders of a corporation may execute a shareholders' agreement or determine certain provisions in the company's bylaws, such as certain rights and obligations regarding negotiation of shares, vote right, majorities for decisions, drag-along and tag-along rights, put and call options, deadlock solution procedures, issuance of non-voting shares, etc.
• Shareholders General Assembly must meet and approve the company's financial statements at least once a year
• Colombian law requires any foreign investment to be declared through the Colombian Central Bank
• Colombian law does not require a simplified stock company to have a statutory auditor, unless the company exceeds certain amount of assets

Limited liability company

• Unlimited number of shareholders allowed (limited only by the number of shares since 1 share must at least correspond to CZK1 unless articles stipulate otherwise).

• Taxed on its earnings at a corporate level, and shareholders are taxed on any distributed dividends.
• Minimum stated capital: none prescribed; however, 1 share must at least correspond to CZK1.

• Single-tier management (or 2-tier board system, if supervisory board is set up), depending on the size of the company. Management is responsible for the day-to-day management; the supervisory board, if established, supervises management and grants its consent (in some cases mandatory) to certain business and transactions.

• Typical charter documents include:
  • Articles of incorporation
  • Organizational resolutions by managing directors, if applicable, the supervisory board and AGM/EGM and
  • List of shareholders.
• Share of each shareholder is registered with the Czech commercial register; share certificates may be issued.
• Depending on the size (established by the balance sheet total, turnover and number of employees), annual financial statements must be audited by an auditor and filed with the Czech commercial register.

Joint stock company

• In theory, unlimited number of shareholders.
• Taxed on its earnings at a corporate level, and shareholders are taxed on any distributed dividends.

• Minimum stated capital: CZK2 million or EUR80,000.

• Governance system may be two-tier with a board of directors (predstavenstvo) and supervisory board (dozorci rada), or single-tier with an administrative board (spravni rada); the first arrangement is more common.
• Typical charter documents include:
  • Articles of incorporation and
  • Organizational resolutions by the management board, supervisory board and AGM/EGM.
• Shares must be either registered shares or, if bearer shares, then issued only as dematerialized shares registered by securities depository.
• Depending on the size (established by the balance sheet total, turnover and number of employees), annual financial statements must be audited by an auditor and filed with Czech commercial register.

Limited company (Kapitalselskab)

• There are 3 types of limited companies: public limited companies (Aktieselskaber or A/S), private limited companies (Anpartsselskaber or ApS) and limited partnership companies (Partnerselskaber or P/S)

• Minimum 1 shareholder and no maximum.
• Generally no personal liability of the shareholders.
• Limited companies are taxed on their earnings at a corporate level, and shareholders are taxed on distributed profits and salary from the company.
• Limited companies are subject to a Danish corporate income tax rate which currently amounts to 22 percent.

• Typical corporate documents include:

  • memorandum of association
  • articles of association
  • rules of procedure for the board of directors
  • minutes of the general meetings
  • shareholders’ agreement and
  • register of shareholders.
• The board of directors holds the overall and strategic management responsibility; the executive board has day-to-day management responsibility of the company.
• Separate classes of shares with different rights (voting, dividends, etc.) are commonly used.
• Annual reports must be filed annually with the Danish Business Authority.

General partnership (Interessentskab, I/S)

• Minimum 2 partners are required, which can be either natural persons or legal entities such as limited companies.
• No startup capital requirement.
• Founded by an agreement between the partners; registration with the Danish Business Authority is possible and mandatory if all partners are legal entities.
• A general partnership is tax transparent. Each partner is taxed individually for its part of the profits of the general partnership (income tax).
• The partners are personally liable for the debt of the general partnership.
• An authorized or approved auditor and filing of annual reports are required where the general partnership meets certain criteria regarding partners, number of employees, balance sheet total and net turnover.

Limited partnership (Kommanditselskab, K/S)

• Minimum two partners are required, which can be either natural persons or legal entities, such as limited companies.
• At least one partner of the limited partnership must take status as the general partner (Komplementar) and at least one as the limited partner (Kommanditist).
• The general partner has unlimited, personal liability (jointly and severally) for the agreements and debt of the limited partnership. The limited partner is only liable for the subscribed capital, which is similar to the liability of limited companies. The liability includes debt that already exists at the time of becoming a partner.
• There is no startup capital requirement for the general partner, but a capital requirement for each limited partner is minimum DKK1.
• A limited partnership is tax transparent like a general partnership. Partners are taxed individually for their part of the profits of the limited partnership (income tax and social security contributions).
• A limited partnership is incorporated by filing with the Danish Business Authority.
• An authorized or approved auditor and filing of annual reports are required where the limited partnership meets certain criteria regarding partners, number of employees, balance sheet total and net turnover.

Branch office (Filial)

• A company based within the EU or EEA or based in the US, Switzerland, South Korea or Georgia that engage in business activities in Denmark may register a branch office with separate management in Denmark. Companies based in other countries may register a branch in Denmark as well; however, a declaration from the business authorities in the country in which the company is incorporated is required.

• A branch is not a separate legal entity but is part of the foreign-based company.

• It has no independent capital and the assets and liabilities are a part of the total assets of the foreign-based company.

• 1 or more branch managers must be appointed to run the business activities in Denmark.

• The branch is subject to a Danish corporate tax rate which currently amounts to 22 percent.

• The branch is incorporated by filing with the Danish Business Authority.

• The business name must contain the name of the foreign-based company and the word "filial" added hereto.

• A branch must file annual reports of the foreign company with the Danish Business Authority.

JSC

• Minimum of 3 shareholders is required with no maximum limit; can be a natural or juridical person (given that it has in its purposes the establishment of such company).
• Foreign shareholders in JSC are permitted. Foreign shareholders must pass security clearance.
• Taxed on its annual net profits and on its distributed dividends.
• Typical charter documents include:
  • Articles of Association (AoA)
  • Bylaws
  • Organizational board resolutions
  • General assembly resolutions
  • MCDR (as defined below) registration certificate
  • and Commercial register.

In an effort to achieve dematerialization by moving to replace materialized share certificates (ie, physical shares) with centralized electronic book keeping, the amendments recently introduced to the Companies Law require all existing JSCs to register and deposit their shares with Misr ("Misr" means "Egypt" in the Arabic language) for Central Clearing, Depository and Registry (the MCDR).

• BoD has overall day-to-day management responsibility.

LLC

• Minimum of 2 quotaholders and a maximum of 50 quotaholders
• Taxed on its annual net profits and on its distributed dividends
• Typical charter documents include:
  • Articles of incorporation (AoI)
  • General assembly resolutions and
  • Commercial register.
• The company's AoI sets forth how the business is to be managed. It must be managed by 1 or more managers appointed from its quotaholders or from third parties.

OPC

• Wholly owned by 1 person; can be a natural or juridical person.
• Taxed on its annual net profits and on its distributed dividends.
• Typical charter documents include:
  • AoI
  • Founder's resolutions and
  • Commercial register.
• Founder has overall management responsibility in person or through appointed manager(s).

Branch

• No partners are required.
• GAFI approval is required to establish a branch, and it must be registered with the Commercial Registration Department (CRD).
• Typical charter documents include:
  • Commercial register and
  • A foreign-based company's resolution of establishing a branch in Egypt.
• A branch must comply with applicable companies, taxation, labor, social insurance law and foreign exchange control regulations.

RO

• No partners are required.
• A parent company submits an application to establish RO to GAFI, and it must be registered with the CRD.
• Such application must specify the foreign parent company's name, nationality, purpose, capital, head office location abroad, Egyptian branch (if any) and the type of the RO required to be established in Egypt, its purpose and permanent/temporary address.
• All the aforementioned are to be attached with:
  • The parent company's bylaws, AoA and a translation of their summary
  • The resolution of the parent company approving the establishment of the RO in Egypt
  • The name of the RO's manager or temporary agent and
  • The proper fees.
• Typically, a charter document includes:
  • Commercial register and
  • A parent company's resolution of establishing an RO in Egypt.
• RO must comply with applicable taxation, labor and social insurance law, and foreign exchange control regulations.

Osakeyhtiö (Oy)

• Unlimited number of shareholders
• Generally no personal liability of the shareholders
• Taxed on its earnings at a corporate level (currently 20 percent), and shareholders are taxed on any distributed dividends
• Typical charter documents include:
  • Articles of association
  • Agreement of incorporation
  • Organizational board resolutions
  • Stock certificates
  • Stock ledger
• Incorporated by registration with the Finnish Trade Register (Kaupparekisteri)
• Board of directors has overall management responsibility; managing director has day-to-day responsibility
• Shareholders typically purchase stock in the company; separate classes of shares with different rights (eg, voting, dividends) are commonly used
• Annual report is filed annually with the Finnish Trade Register (Kaupparekisteri)

Société par actions simplifiée (SAS)

• Unlimited number of shareholders.
• Generally no personal liability of the shareholders.
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends.
• Typical charter documents include bylaws, organizational shareholders' meeting resolutions, share transfer register and shareholders’ accounts.
• The president is the only required corporate body by law who gets the broadest powers to act in the name and on behalf of the company and to represent the company towards third parties
• Shareholders typically purchase stock in the SAS, either common or preferred.
• SAS does not have access to the capital markets and its shares cannot be listed on a stock exchange.

Société à responsabilité limitée (SARL)

• Up to 100 shareholders; only one class of stock allowed.
• Generally no personal liability of the shareholders.
• Typical charter documents include bylaws and organizational shareholders' meeting resolutions.

• Manager(s) get(s) the broadest powers to act in the name and on behalf the company and to represent the company towards third parties.

Société anonyme (SA)

• SA enables public offering of shares.
• Unlimited number of members allowed and at least 2.
• Generally no personal liability of the members.
• Typical charter documents include bylaws, organizational shareholders' meeting resolutions, share transfer register and shareholders’ accounts. Shareholders typically purchase stock in the SA, either common or preferred.

Partnerships

GbR (Gesellschaft bürgerlichen Rechts), oHG (Offene Handelsgesellschaft), KG (Kommanditgesellschaft), GmbH & Co. KG

• Require no minimum share capital and
• At least 1 partner is personally unlimited liable.

Corporations

GmbH (Gesellschaft mit beschränkter Haftung) – Limited Liability Company:

• 1 or more shareholders
• EUR25,000 minimum share capital
• Liability limited to share capital
• Most popular legal form in Germany and
• Individual formation possible due to very few mandatory provisions.

UG (Unternehmergesellschaft haftungsbeschränkt) – Limited Liability Entrepreneurial Company:

• 1 or more shareholders
• EUR1 minimum share capital
• Liability limited to share capital and
• Strict requirements to accumulate yearly earnings.

AG (Aktiengesellschaft) – Stock Corporation:

• 1 or more shareholders
• EUR50,000 minimum share capital
• Liability limited to stock capital
• Generally addresses a larger number shareholders and
• Stocks fungible and can be traded at the stock markets.

KGaA (Kommanditgesellschaft auf Aktien) – Partnership limited by Shares:

• 2 partners or more: at least 1 as general partner and 1 as limited partner
• EUR50,000 minimum share capital
• General partner is personally liable without limitation (but a limited liability partner can be the general company) and
• Limited partner's liability is limited to his share.

Societe anonyme (S.A.)

• Unlimited number of shareholders but can be also formed as a single member company, namely as a company with 1 shareholder, either a natural or a legal person.

• Generally, no personal liability of the shareholders

• Typical documents:
  • The Act of establishment of a societe anonyme and
  • The Articles of Association of a societe anonyme, which are subject to publicity.
• Shareholders are not personally liable, but the company is liable with its own assets
• Taxed on its earnings at a corporate level, and partners are taxed on any distributed dividends (withholding tax)
• The societe anonyme can be formed before a notary public with a notarial deed or with a private document where the articles of association are included
• Board of directors has overall main management responsibilities; officers have day-to-day responsibilities.

Limited liability company (L.T.D.)

• Can be formed as a single member company, namely as company with 1 partner who is either a natural or a legal person.
• A natural or legal person cannot participate as a sole partner in more than one single member limited liability companies.
• There is no restriction to the number of partners, who can be either individuals or legal entities
• Partners are not personally liable, but company is liable with its own assets
• Taxed on its earnings at a corporate level, and partners are taxed on any distributed dividends (withholding tax)
• The LTD can be formed before a notary public with a notarial deed or with a private document where the articles of association are included
• Articles of association set forth how the business has to be managed
• Partners typically contribute in cash or in kind (eg, real estate property), only capital contributions are made.

Private company (P.C.)

• Can be formed as a single member company, namely as a company with 1 partner who is either a natural or a legal person.
• There are no restrictions on the number of partners, who can be either individuals or legal entities
• Partners are not personally liable, but the company is liable with its own assets
• Taxed on its earnings at a corporate level and partners are taxed on any distributed dividends (withholding tax)
• Formed by a private document with few exceptions, where the articles of association are included
• Articles of association set forth how the business is to be managed
• Partners typically contribute in cash or services to the PC (capital and non-capital contributions)
• Any person can become a partner only by accepting the obligation to cover any company debt to any third party at any time in the future up to a specific amount, which has to be stated in the articles of association, either during incorporation or during any other future amendments thereof (guarantee contributions)

Limited private companies

• Up to 50 shareholders
• Right to transfer shares restricted
• Invitation to public to subscribe for any shares or debentures prohibited
• Generally no personal liability of the shareholders
• Taxed on its profits at a corporate level. No tax on capital gains or dividends with exceptions for certain foreign-sourced income
• Typical corporate documents include:
  • Articles of association
  • Certificate of incorporation
  • Business registration certificate
  • Board resolutions
  • Shareholders' resolutions
  • Share certificates
  • Common seal (optional) and
  • Registers.

Board of directors has overall management responsibility.

Annual return, notification of changes (such as share capital and directors) and creation of certain charges must be filed with the Companies Registry.

Limited public companies

No restrictions on number of shareholders, right to transfer and invitation to public to subscribe for shares or debentures.

Interim and annual report also to be filed with Hong Kong Stock Exchange if the public company is listed in Hong Kong Stock Exchange.

Companies limited by guarantee (without a share capital)

Same as limited private companies, except liability of shareholders limited by the company's articles to the amount that the shareholders undertake to contribute to the assets of the company in the event of it being wound up.

Private company limited by shares (Zrt.)

• Unlimited number of shareholders.

• Generally, no personal liability of shareholders.

• Taxed on its worldwide income at a corporate level. Dividends paid to (resident and non-resident) corporate shareholders are exempt from taxation in Hungary. Only dividends paid to (resident and non-resident) individual shareholders are subject to withholding tax.

• Typical charter documents include the articles of association, stock certificates and stock ledger.

• Board of directors has overall management responsibility.

• At least 1 shareholders' meeting must be held each year (to resolve on the acceptance of the annual financial statements and the payment of dividend).

• Upon the foundation of the Zrt. as well as on any subsequent capital increases fresh capital can be injected in the form of cash or in-kind contributions.

• The type of shares that a Zrt. can issue can be structured flexibly, including ordinary shares, preferred and deferred shares as well as employee shares (with limited transferability).

• Annual financial statements to be filed electronically by uploading them to a website operated by the Ministry of Justice (e-beszamolo.im.gov.hu) and these can be accessed by the general public.

Limited liability company (Kft.)

• Unlimited number of quotaholders allowed.

• Generally, no personal liability of quotaholders.

• Typical charter documents include the articles of association (in the case of sole quotaholder Kft. this is called “deed of foundation”) and list of quotaholders.

• At least I shareholders' meeting must be held each year (to resolve on the acceptance of the annual financial statements and the payment of dividend).

• Quotaholders contribute cash or in-kind contributions to Kft.

• If the articles of association so provides, the quotaholders may be required to provide a Kft. with supplementary capital contributions in order to cover losses. These payments do not increase the quotaholders’ quota in the company. The Kft must repay these contributions to the quotaholders as soon as its financial position allows it.

• Taxed on its worldwide income at a corporate level. Dividends paid to (resident and non-resident) corporate shareholders are exempt from taxation in Hungary. Only dividends paid to (resident and non-resident) individual shareholders are subject to withholding tax.

Private limited company

• Preferred choice of corporate entity by foreign investors because it is simpler to administer.
• India is an exchange-controlled economy, and there are certain restrictions or conditions in case of foreign investment in identified sectors. Under the Foreign Direct Investment (FDI) policy of India, 100-percent FDI is permissible in various sectors (including manufacturing, services sectors, single brand product retail trading). FDI is prohibited in a few sectors (such as gambling and lottery business). In certain sectors, there are limits on the permissible FDI under the automatic route (such as 74% FDI is permitted in brownfield pharmaceutical). In sectors like print media and multi brand retail trading, the prior approval of the government is required for FDI.
• The Indian foreign exchange control regime was amended in April 2020 to restrict FDI from certain countries. The prior approval of the government will be required in case of investment from an entity of a country which shares land borders with India (such as, among others, China and Hong Kong), or where the beneficial owner of an investment into India is situated in or is a citizen of any such country. Similarly, in case of transfer of ownership of any existing or future FDI in an entity in India, directly or indirectly, resulting in the beneficial ownership falling within the purview of para above, such subsequent change in beneficial ownership will also require approval of the government.
• All issuances and transfers of shares involving foreign investors have to comply with the prescribed ‘pricing guidelines’ issued by the Reserve Bank of India (RBI) from time to time. The shares of unlisted companies can be acquired by a foreign investor at a price which is not less than the fair value of the shares of the Indian company determined by a chartered accountant or a SEBI registered merchant banker or a practicing cost accountant, in accordance with internationally accepted accounting principle and on an arms’ length basis.
• For tax purposes, companies are broadly classified as follows under the (Indian) Income Tax Act 1961:
  • domestic company: an Indian company formed under the Companies Act, 2013 or Companies Act,1956
  • foreign company: a company which is not a domestic company

Indian companies are taxed in India on their worldwide income, irrespective of its source and origin. Foreign companies are taxed only on income which accrues from operations carried out in India. In certain cases foreign companies may be taxed on income which is deemed to have arisen in India and includes royalty, fees for technical services, interest, gains from sale of capital assets situated in India (including gains from sale of shares in an Indian company) and dividends from Indian companies.

Limited liability partnership

• The Limited Liability Partnership (LLP) Act, which was notified in 2009, allowed LLPs to be incorporated in India.
• LLP is a hybrid form of business with the features of both a legal entity as well as traditional partnership.
• Government approval dispensed with for foreign investments in the LLP where FDI is allowed under the automatic route; in sectors or activities where 100-percent FDI is allowed and no-FDI linked performance condition has been stipulated.
• Minimum of 2 partners (ie, owners) are required. There is no limit to the maximum number of partners. A legal entity or an individual can be a partner of an LLP.
• Every LLP must have at least 2 designated partners who are individuals, and at least 1 of them must be a resident in India. In case of an LLP where all partners are legal entities or 1 or more partners are individuals and legal entities, at least 2 individuals who are partners of such LLP or nominees of such legal entities must act as designated partners.

• Designated partners are responsible for all acts of an LLP, and designated partners must be accountable for regulatory and legal compliances. No minimum capitalization requirements.

• Similar process of incorporation to a private limited company.
• Designated partners must secure a Designated Partners Identification Number (DPIN) and digital signature prior to incorporation. If designated partners already have a DIN, the DIN may be used.
• Recently, LLPs have also been permitted to convert into a company under the automatic route.
• Typical charter documents include the LLP agreement. Partners typically contribute to the LLP as defined in the LLP agreement and agree on a profit-sharing ratio.
• An LLP is required to get audit done only if:
  • Contributions of an LLP exceed INR 2.5 million or
  • Annual turnover of an LLP exceeds INR 4 million
• An LLP’s income is subject to tax at 34.94 percent (assuming highest applicable surcharge and cess). No further tax on repatriation of the profits of an LLP to an overseas parent entity, and, hence, the effective tax rate in the case of an LLP is 34.94 percent.
• The FDI policy allows foreign direct investment under an automatic route in an LLP in specified sectors and has removed the specific prohibition on LLPs availing external commercial borrowings (ECBs). An LLP which has existing foreign investment is permitted to make downstream investments in another company or LLP in sectors in which 100-percent FDI is allowed under the automatic route and there are no FDI-linked performance conditions.

• May not be suitable for all types of business. Suited best for professionals and small to medium businesses.

Branch office

• A foreign company needs prior approval from the RBI to establish a branch and is not permitted to expand its activities or undertake any new trading, commercial or industrial activity other than that expressly approved by the RBI.

• Must register itself with the Registrar Of Companies and file audited accounts.
• Only specified activities permitted; cannot undertake any manufacturing activity in India.

Liaison office

• Suitable for foreign companies that wish to set up a representative office as a first step to explore and understand the business and investment climate in India.
• Serves as a communication channel between the parent company overseas and its present or prospective customers in India.
• Must obtain prior approval from RBI before establishing a liaison office.
• Must register itself with the Registrar of Companies and file audited accounts.
• Limited activity: may establish business contacts and may gather market intelligence to promote the products or services of the overseas parent company but cannot undertake any business activity in India or earn any income in India.

Limited liability company

A separate legal entity.

The typical charter documents and main features include the following:

• The deed of establishment containing the articles of association and its approval from the Ministry of Law and Human Rights (MOLHR)
• The shareholders’ resolutions containing any amendments to the articles of association and their receipts of notice or approvals from the MOLHR
• The limited liability of the shareholders
• The board of directors has overall management responsibility and
• The board of commissioners has overall supervisory responsibility.

The general meeting of shareholders must be convened annually (within 6 months of the end of the financial year) and an extraordinary general meeting of shareholders may be convened at any time as required to make necessary decisions.

• Private company limited by shares (LTD)
• External company (ie, an Irish branch)

Company

• Unlimited number of shareholders. However, having over 50 shareholders will subject the company to different reporting requirements.
• Generally no personal liability of the shareholders.
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends.
• Typical charter documents include: Certificate of Incorporation; and Articles of Association.
• Board of directors has overall management responsibility; general manager has day-to-day responsibility within the framework set by the board of directors and is subject to the board’s supervision.
• Shareholders typically purchase shares in the corporation, either common or preferred.
• The Company is subject to various annual corporate maintenance requirements such as: annual fee to the Registrar of Companies, appointment of auditors and filing of an annual report with the Registrar of Companies.

Branch / representative office

• Registration of an already existing corporate entity (excluding a partnership) organized outside of Israel (the Original Entity) with the Israeli Registrar of Companies
• Defined under the Israeli Companies Law – 1999, as a “Foreign Company”, and
• Not a separate legal entity (same entity as the Original Entity)

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

Typical documents include: (i) a list of Italian company’s quota-holders and all information regarding the foreign company wishing to incorporate it; (ii) power of attorney, notarized and apostilled, if necessary, issued in favor of the persons who are requested to carry out the incorporation meeting in Italy; (iii) certificate of existence and good standing of the quota-holders; (iv) specific information about the company management; (v) Italian Fiscal Code of the Italian company’s directors and of the auditing body (if any) (at this respect, please note that any non-Italian citizen director must request the issuance of an Italian tax code); (vi) bylaws and deed of incorporation of the company, which must have the specific requirements provided by the Italian Civil Code. 

At least 25 percent of the contributions in cash of the corporate capital must be deposited in a temporary deposit, in proportion of the interest underwritten by each quota-holder and all of the capital must be duly underwritten; otherwise, the incorporation meeting cannot take place. The remaining contributions of the corporate capital must be paid in when requested by the board of directors or the sole director. In case of sole quota-holder, the entire amount of the corporate capital must be paid in at time of incorporation.

Società per azioni (S.p.A.)

Typical documents include: (i) a list of Italian company’s shareholders and all the information regarding the foreign company wishing to incorporate it; (ii) the company shareholder’s ledger and shares’ certificates; (iii) Italian Fiscal Code of the Italian company's directors and of the auditing body (please note that any non-Italian citizen director must request the issuance of an Italian tax code); (iv) bylaws and deed of incorporation of the company, which must have specific requirements provided by the Italian Civil Code. 

The entity setup is subject to the following: (i) the share capital must be entirely underwritten; (ii) the provisions contained in Articles 2342, 2343 and 2343-ter of Italian Civil Code must be respected; (iii) the authorizations and the other conditions provided by special laws for the incorporation of the company, in relation to its particular purposed, shall apply.

Branch office

• Not a separate legal entity from its parent company
• However, it still has the power to permanently represent the parent company in Italy
• It is autonomous with respect to the way in which it organizes its activities in Italy
• It has decision-making ability to carry on the business of its parent company in Italy
• 1 or more persons are granted with the ability to represent the branch office in Italy (the so-called “preposto/i”)
• It is taxed on its earnings at a corporate level. Once the gross profits have been taxed in Italy at the branch level, they can be transferred to the parent company (foreign headquarter) without further Italian taxation (technically they are not dividends since the net profit of an Italian branch already belongs to the parent company)

• Typical charter documents include, but are not limited to, the following: registration with the appropriate Companies’ Register, issuance of an Italian fiscal code and VAT code for the branch office, issuance of an Italian fiscal code for the legal representative(s) of the branch office, statement of new activity in Italy, a resolution adopted by the competent corporate body of the parent company upon the incorporation of the branch and granting of powers to the preposto.

Representative office

• Not a separate legal entity from its parent company
• It does not have the power to represent the parent company in Italy
• It can only carry out promotional and advertising activities in Italy, receive and provide information on behalf of the parent company, carry out scientific research activity, create relationships with possible clients and monitor the Italian market
• Cannot bind the parent company to any 3rd party
• It is not subject to taxation in Italy (by definition a representative office does not carry out a business activity), and
• Typical charter documents include: registration with the Economic and Administrative Register (REA) and issuance of an Italian fiscal code for the representative office and for its legal representative

Registered branch

• This form is used by foreign companies which wish to gain presence in Japan without establishing a subsidiary.
• Appointment of a representative in Japan who has an address in Japan is needed. Other than that, there are no requirements regarding corporate maintenance.
• This form is taxed on its income arising within Japan in principle.

Kabushiki-Kaisha (KK)

• Unlimited number of shareholders
• No personal liability of the shareholders
• Taxed on its earnings at a corporate level, and shareholders are taxed on any distributed dividends
• The corporate formalities are fairly strict.
• Directors have overall management responsibility. A KK may be established with or without a board of directors.

Godo-Kaisha (GK)

• Unlimited number of members allowed
• Liability of members is limited to the amount of equity participation.
• Taxed on its earnings at a corporate level, and members are taxed on any distributed profits
• There are few formal corporate governance requirements that must be observed.
• Members are designated to manage the business.

The forms of entities that are most commonly used in Luxembourg are the private limited liability company (société à responsabilité limitée or S.à r.l.), the public limited liability company (société anonyme or SA) and the special limited partnership (société en commandite spéciale or SCSp).

Other forms of entities commonly used in Luxembourg include the common limited partnership (société en commandite simple or SCS) and the corporate partnership limited by shares (société en commandite par actions or SCA).

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

• From 1 to 100 shareholders
• Share capital may be divided into several classes of shares
• Generally no personal liability of the shareholders
• Typical incorporation documents include a notarial incorporation deed including articles of incorporation

• Register of shareholders to be maintained at the registered office of the company

• Managed by a sole manager or a board of managers
• Annual accounts must be filed with the Luxembourg Register of Commerce and Companies
• For US tax purposes, an S.à r.l. qualifies as a check-the-box company

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

• At least one shareholder and no maximum number
• Share capital may be divided into several classes of shares
• Generally no personal liability of the shareholders

• Managed by a sole director (possible only if the company has a sole shareholder) or a board of directors composed of at least 3 directorsor by an executive board (directoire) and a supervisory board (conseil de surveillance).

• Typical incorporation documents include a notarial incorporation deed including articles of incorporation
• Shares register to be maintained at the registered office of the company

• If organized as a one-tier company (which is the most common), managed by a sole director (only if a sole shareholder) or a board of directors composed of at least 3 directors

• Annual accounts must be filed with the Luxembourg Register of Commerce and Companies. For US tax purposes, an S.A. does not qualify as a check-the-box company

Special limited partnership (Société en commandite spéciale or SCSp)

• At least one general partner (associé commandité) and one limited partner (associé commanditaire)

• No legal personality and tax transparent

• No minimum capital requirement; partnership units may be issued

• Generally liability of the limited partners, limited to their contribution

• The general partner(s) jointly and severally liable for the partnership's commitments

• The partnership may be managed by its general partner(s) or by a board of managers

• Typical formation documents include a limited partnership agreement and a register of partnership interests

• High level of contractual freedom and structuring flexibility

• Annual accounts, if any, must be filed with the Luxembourg Register of Commerce and Companies for statistical purposes, but they are not published

Private Limited Company (Sendirian Berhad)

• Liability of shareholders is limited to the amount of shares held by the shareholder.
• The minimum number of shareholders is 1 and the maximum number of shareholders is 50. If the number of shareholders exceeds 50, a private limited company will have to convert its status to a public company, which is an unlimited public company.
• Director will be appointed by the shareholders of a private limited company to manage such company. A director may or may not be a shareholder of the company.
• A private limited company is restricted from offering any of its shares to the public.
• The Companies Act 2016, Malaysia, largely regulates the power and duties of a private limited company.

Limited Company

The limited liability company requires a minimum of 1 shareholder at incorporation of any nationality and country of residence, 1 director who must be ordinarily resident in Mauritius and a minimum of share capital of MUR1. There are restrictions with regards to foreign ownership in the tourism, sugar and telecom industries.

The company is incorporated at the Registrar of Companies of Mauritius (Registrar of Companies). The application must contain the name of the registered office, the full name and address of each applicant, director and secretary of the company. There is a payment of MUR3,000 to make for the incorporation of a company.

A small private company (company which has a turnover of less than MUR50 million) is not required to appoint a secretary or auditor.

Protected Cell Company

A protected cell company consists of a core (non-cellular) and an indefinite number of cells (cellular) whereby each cell is isolated from one another and operates separately. This allows for the segregation of risks, assets and liabilities of different individual and/or corporate entities under a shared structure. A protected cell company must have the words “PCC” or “Protected Cell Company” at the end of its name, with each cell having its own designation or name.

Global Business Corporation

The Global Business Corporation can be set up with a minimum capital of USD1, 1 shareholder and 2 directors who must be ordinarily resident in Mauritius. Additional evidence that the company is managed from Mauritius is also required to be shown to the FSC, such as having at all times its principal bank account in Mauritius and keeping and maintaining its accounting records at its registered office in Mauritius. The Global Business Corporation must be administered locally by a management company.

Authorized Company

The Authorized Company can be set up with a minimum capital of USD1, 1 shareholder and 1 director who does not need to be resident in Mauritius. The setting up of an authorized company requires a resident registered agent, which shall be the management company, and which is in charge of maintaining company records. It is mandatory for an authorized company to file a return of its income with the Mauritius Revenue Authority and it must conduct business and have its place of effective management and control outside of Mauritius.

Limited Liability Partnerships

A limited liability partnership can be set up with a minimum of 2 partners who can both be non-residents. A minimum capital of USD1 is required per partner and, unless 1 of the partners is resident in Mauritius, every limited partnership shall at all times have and maintain in Mauritius a registered agent. The partnership must be registered with the Registrar of Limited Partnerships and if the partnership will conduct business outside of Mauritius, a license from the FSC is also required. The name of the limited partnership must end with the words “Limited Partnership,” “L.P.” or “LP.” The registered office of the limited partnership must be in Mauritius.

Variable capital company

A variable capital company (VCC) is a company incorporated under the Companies Act and which carries its activities through its sub-funds and Special Purpose Vehicles (SPVs). A VCC must be authorized by the FSC as a VCC Fund pursuant to the Variable Capital Companies Act 2022 of Mauritius.

A VCC Fund which meets the criteria provided under section 71 of the Financial Services Act 2007 of Mauritius is required to hold a Global Business Licence from the FSC.

A sub-fund of a VCC Fund, subject to the approval of the FSC, operates as a Collective Investment Scheme (CIS) or a Closed-End Fund (CEF) of any category and may elect to have a separate legal personality from that of the VCC Fund. The FSC expects a VCC Fund to appoint the same company secretary (management company, in case it holds a Global Business Licence) for all of its incorporated sub-funds/SPVs.

There are 3 types of commercial entities that generally are incorporated or formed under Mexican federal law:

• Sociedad Anónima de Capital Variable (S.A. de C.V.), which is similar to a corporation in the US
• Sociedad de Responsabilidad Limitada de Capital Variable (S. de R.L. de C.V.), which is similar to an LLC in the US) and
• Sociedad Anónima Promotora de Inversión de Capital Variable (S.A.P.I de C.V.), a subtype of S.A. de C.V., regulated under the Stock Markets Law (Ley del Mercado de Valores).

S.A. de C.V.

Unlimited number of shareholders.

Generally no personal liability of the shareholders.

Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends.

Shareholders have preemptive rights to subscribe and pay shares if the S.A. de C.V. approves to increase its capital.

Typical charter documents include the articles of incorporation, bylaws, stock certificates and (a) stock ledger, (b) shareholders’ meetings ledger (c) board of directors ledger and (d) capital variations ledger.

Board of directors (or sole administrator) has overall management responsibility; officers have day-to-day responsibility.

Shareholders typically incorporate the corporation or may purchase shares from existing shareholders.

Shareholders can enter into shareholders’ agreements in which they agree to certain rights and obligations such as drag-along and tag-along rights, put and call options, deadlock solution procedures and the issuance of non-voting shares, among others. Such provisions can likewise be included in the company’s bylaws.

Relevant law requires a shareholders’ annual meeting to approve:

• Preceding year-end financial statements
• Ratification or appointment of new director(s) and statutory examiners
• The fees paid to directors and statutory examiners and
• Separation of 5 percent of the profits, if any, for a legal reserve, which shall reach an amount equivalent to the 20 percent of the social capital.

Federal law requires, when there is foreign investment in the capital of the S.A. de C.V., to register before the National Registry of Foreign Investments and file an annual report with such agency, reporting the preceding year’s year-end financial statements.

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

Up to 50 partners; contributions of the partners to the capital are represented by equity interests (not shares) which are not negotiable instruments.

Generally no personal liability of the partners.

Taxed on its earnings at a corporate level and partners are taxed on any distributed dividends.

Subject to US tax law (check the box related) requirements, the Mexican S. de R.L. de C.V. may qualify as a pass-through entity.

Partners have preemptive rights to subscribe and pay equity interests if the S. de R.L. de C.V. approves to increase its capital, as well as to acquire any equity interest of a selling partner, in case the relevant sale is made to a non-partner.

Typical charter documents include articles of formation, bylaws and (a) partners ledger, (b) partners’ meetings ledger, (c) board of directors ledger and (d) capital variations ledger.

Board of directors (or sole administrator) has overall management responsibility; officers have day-to-day responsibility.

Partners typically form the company or may acquire equity interests from existing partners, subject to the waiver of other partners’ preemptive rights.

Relevant law requires a partners’ annual meeting to approve:

• Preceding year-end-financial statements
• Ratification or appointment of new director(s) and statutory examiners, if any
• The fees paid to directors and statutory examiners, if any, and
• Separation of 5 percent of the profits for a legal reserve, which shall reach an amount equivalent to 20 percent of the social capital.

Federal law requires, when there is foreign investment in the capital of the S. de R.L. de C.V., to register before the National Registry of Foreign Investments and file an annual report with such agency, reporting the preceding year’s year-end financial statements.

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

Same legal requirements and provisions for the S.A. de C.V., although relevant law provides certain differences in the operation of the S.A.P.I. de C.V., particularly in the possibility to adopt the administration regime of the S.A.B. (public company) and the possibility of the company to acquire its own shares.

A S.A.P.I de C.V. must be managed by a board of directors (a sole administrator is not allowed).

Branch office (local office of a non-Dutch legal entity in the Netherlands)

• Not a separate legal entity. The branch office is a local business office of a non-Dutch legal entity in the Netherlands (the head office)
• A branch office is ‘established’ by a resolution of (the appropriate corporate body under the governing law of) the head office to establish a branch office, followed by registration thereof in the Dutch Trade Register
• Governing law of the head office applies in respect of all corporate legal matters (such as liability of the shareholders, charter documents, responsibility of directors and capital requirements), and
• If the head office under its governing law requires to file annual accounts in its country of origin, then such annual accounts shall also be filed for the branch office with the Dutch Trade Register

B.V. (a private company with limited liability)

• Unlimited number of shareholders
• Generally no personal liability of the shareholders
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends
• Typical charter documents include: articles of incorporation (included in its deed of incorporation or later deed of amendment, which both require to be executed before a civil-law notary in the Netherlands) and shareholders register
• Board of directors has overall management and day-to-day responsibility
• Shareholders typically acquire shares at incorporation of the BV or by deed of issue thereafter. Shares in the capital of a BV are registered shares for which, in general, no (non-transferable) share certificates are issued. Different types of shares can be created (common, preferred, without voting rights or without profit entitlement), and

• A BV requires to file annual accounts with the Dutch Trade Register. Exemptions can apply – for instance, in the case of consolidation and when certain conditions are met.

Co-operative U.A. (a co-operative association with exclusion of liability)

• Unlimited number of members (with a minimum of 2)

• Generally, no personal liability of the members (which is indicated by use of “U.A.” in the name of the co-operative). Please note there can also be co-operative associations in the Netherlands with a different level of liability for its members to contribute to a deficit upon liquidation, such as the co-operative BA (with limited liability of its members) and the co-operative WA (with statutory liability for its members). This overview is limited to the (most commonly used) co-operative UA (with exclusion of liability for its members), hereinafter also referred to as “co-operative.”

• Taxed on its earnings at a corporate level, and members are taxed on any distributed dividends

• Typical charter documents include: articles of incorporation (included in its deed of incorporation or later deed of amendment, which both require to be executed before a civil law notary in the Netherlands), a membership agreement (agreement between the members and the co-operative) and a members' register
• Management board has overall management and day-to-day responsibility

• Members typically acquire a membership interest at incorporation of the co-operative or at a later date by being admitted as a new member of the co-operative. A co-operative does not have a capital divided by shares. Capital contributions made by each member to the co-operative are kept in the member accounts kept by the co-operative in the name of each member, and

• A co-operative requires to file annual accounts with the Dutch Trade Register

C.V. (a Dutch limited partnership)

• Unlimited number of partners (with a minimum at least 1 general partner and at least 1 limited partner)
• A general partner is jointly and severally liable for any indebtedness of the CV towards third parties. The liability of a limited partner is limited to the amount of its contribution to the CV, provided that the limited partner does not act on behalf of or for the benefit the CV towards third parties
• A CV is not a legal entity under Dutch law. It is an (partnership) agreement between 1 or more general partners and 1 or more limited partners. The partners can either be legal persons or natural persons
• Since the CV is not a legal entity, it is not possible for the CV to own goods. Therefore, in most limited partnership agreements, it is provided that the general partner will hold all assets (for example, shares in subsidiaries) of the CV from a property law perspective. The general partner and the limited partner will jointly hold the beneficial ownership of the assets on behalf of the CV
• A CV that qualifies as a so-called open CV, meaning that the limited partners may be admitted or replaced without the consent of all partners (both limited and general partners), is opaque for Dutch tax purposes. A closed CV is transparent for Dutch tax purposes
• Typical charter documents include: partnership agreement to be signed by all partners and a partners register
• 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
• A CV is being established by means of execution of the partnership agreement and contribution of capital or other assets as to be agreed by the partners. Capital contributions made by each partner to the CV are kept in the capital accounts kept by the CV in the name of each partner, and
• A CV only requires preparing and filing annual accounts with the Dutch Trade Register if, in short, all its general partners are capital companies under foreign law.

Limited liability company

Limited liability companies must have 1) a registered office and an address for service at a physical address in New Zealand; 2) at least 1 shareholder appointed and 1 share issued to a shareholder; 3) at least 1 director appointed who either lives in New Zealand or lives in Australia and is also a director of a company incorporated in Australia.  In addition, limited liability companies must provide to the Registrar of Companies the details of the relevant ultimate holding company (to the extent applicable).

Limited liability companies are taxed on their earnings at the corporate tax rate and can attach imputation credits to their distributions to shareholders.

Limited liability companies can elect to adopt a constitution that sets out the operational procedures and other matters applying to their operations and governance. However, there is no mandatory requirement for companies to adopt a constitution. If a constitution is not adopted, the default provisions of the Companies Act will apply.

Directors are subject to a number of legislative and common law duties that are generally owed to the company to which they are appointed.

Companies can issue shares to shareholders and to third parties in accordance with the requirements set out in the Companies Act and their constitutions (as may be applicable and to the extent that they have adopted a constitution). The Board is generally responsible for determining the issue price per share, which must be fair and reasonable to the company and all existing shareholders.

Companies may issue different classes of shares that have different rights and interest attaching to them, but this right is subject to the provisions of the Companies Act and/or their constitution.

Capital raisings must be done in accordance with the requirements of the FMCA and other applicable law.

Branch

To establish branches, overseas companies must be registered with the Companies Office and be assigned a New Zealand Company Number.

Branches are not separate legal entities, and overseas companies have the full legal responsibility and liability for the actions of their New Zealand branch operations in New Zealand.

Branches must appoint one person who is authorized to accept service of documents in New Zealand.

 

Branches must also notify the Companies Office of the date that they begin to carry on business in New Zealand as well as their “principal place of business in New Zealand.” Branches are taxed as separate entities in New Zealand and are taxed on all their New Zealand taxable profits, which include income sourced from New Zealand less any attributable expenses. A foreign company with a branch in New Zealand may be required to provide its financial statements (or specifically prepared financial statements) to the Companies Office and/or Inland Revenue.

As with limited liability companies, Overseas Investment Office approval under the Overseas Investment Act 2005 may be required before a branch of an overseas company can acquire shares and assets of a certain value, or to purchase certain land that is considered “sensitive land” (which is a term defined in the Overseas Investment Act 2005).

Branches are not required to display the identity of their shareholders on the Companies Office.

Private company

A private company is a company which expresses in its Memorandum of Association (Memo) to be a private company. Private limited companies are the most commonly used business vehicles in Nigeria.

The features of a private company include:

• It must have a maximum of 50 members (excluding the shares held under an employee share scheme and persons who have continued to hold the shares in the company after the determination of their employment). A single-member private company is now recognized under Nigerian Law.

• It must by its articles of association (articles) restrict the transferability of its shares and also provide that the company shall not without the consent of all its members, sell assets having a value of more than 50 percent of the total value of the company’s assets
• That a member shall not sell its shares to a 3rd party without first offering such shares to existing members;
• A member or group of members acting together, shall not sell or agree to sell more than 50 percent of the shares of the company to a non-member unless such 3rd party has offered to buy all the existing members’ interests on the same terms.
• It must have a stated issued share capital of not less than NGN100,000.00.
• Unless authorized by specific law, a private company is prohibited from inviting the public to subscribe for any of its shares or debentures or deposit money for fixed periods or payable call whether or not bearing interest.

• The name of a private company limited by shares must end with “Limited” or “LTD.”

• A private company may pass a written resolution signed by all members where a general meeting cannot be held.

• A private company shall not invite the public to 1) subscribe for any share or debenture of company or 2) deposit money for fixed periods or payable at call, whether or not bearing interest.

Public company

A public company is any company other than a private company, and which is expressed in its Memorandum to be a public company. The features of a public company include:

• It can raise money from the public by offering its shares or debentures to the public and inviting them to subscribe to its shares.
• It must have a minimum of 2 members. However, there is no maximum limit to the number of members of a public company.

• It must have a minimum of 2 directors at all times.

• The stated issued share capital of a public company shall not be less than NGN2 million.
• Where a person who is 70 years and above is to be appointed as a director of a public company, special notice of the appointment must be given to the company and such director must disclose the fact of their age to the members of the company.

• A public company must have at least 3 independent directors who must qualify to be so appointed subject to the definition of an independent director according to the Companies and Allied Matters Act 2020 (the Act). An independent director, according to the Act, is a director or relative of the director who satisfies the following requirements in the 2 years before their proposed appointment:

  1. Was not an employee of the company
  2. Did not make payments to or receive payments of more than NGN20 million from the company
  3. Did not directly or indirectly own more than 30 percent of shares in an entity that made payments to or received payments of more than NGN20 million from the company
  4. Did not act as a partner, director or officer of a partnership or company that made payments to or received payments of more than NGN20 million from the company
  5. Did not directly or indirectly own 30 percent of the shares in the company, directly or indirectly
  6. Was not engaged directly or indirectly as an auditor for the company.

  It is also worthy that the Nigerian Code of Corporate Governance 2018, (the Governance Code) provides a more stringent definition of an independent director as a person who:

  1. Does not own more than 0.01 percent of the paid-up share capital of the company
  2. Does not represent a shareholder which can significantly influence or control management
  3. Is not employee of the company and has not been employed by the company or group within the previous 5 years
  4. Is not closely related to any of the company's advisers, directors, senior employees, substantial shareholders, customers, creditors, auditors, consultants or suppliers
  5. Does not have or has not had a material business relationship with the company in the last 5 years with the company or as a partner, director, shareholder or senior employee of an entity that has such relationship with the company
  6. Has not served at directorate level or above at the company's regulator within the last 3 years
  7. Does not render any professional, consultancy or other advisory services to the company or the group other than in their capacity as a director
  8. Does not receive additional remuneration from the company other than standard directors' fees and sitting allowances
  9. Has not served on the Board for more than 9 years.

  The Governance Code applies to listed and unlisted public companies, private companies that are holding companies of public companies or other regulated entities, concessioned or privatized companies, and all regulated private companies.

  Regulated private companies are such entities that file returns to any regulatory authority other than the Federal Inland Revenue Service and the Corporate Affairs Commission.

• In addition to possessing the requisite knowledge and experience, the company secretary of a public company may be a legal practitioner; a chartered accountant; a chartered secretary; or a firm of any of them, or must have held the office of company secretary of a public company for at least 3 of the 5 years immediately preceding their appointment in a public company.

• A public company must hold its statutory meeting within 6 months of incorporation.

• A public company is statutorily required to have an audit committee.

• In addition to the statutory notice required to be given to those entitled to attend general meetings of a public company, such notice must be published in at least 2 daily newspapers.

• The name of a public company limited by share must end with “Public Limited Company” or “PLC.”

Unlimited company

An unlimited company is a company incorporated with an issued share capital not less than the minimum issued capital having its members personally liable in full for the debts of the company while a member of the company. The registered name of the company must end with “Unlimited” or “ULTD.” An unlimited company may either be private or public. In practice, an “unlimited company” is generally unattractive for business purposes due to the unlimited liability of its members.

Company Limited by Guarantee

Where a company is formed for the promotion of commerce, art, science, religion, sports, culture, education, research, charity or other similar objects, it may be registered as a company limited by guarantee. Other features include the following:

• The income and property of the company are to be applied solely towards the promotion of its objects and no part is to be transferred directly or indirectly to the members of the company.
• A company limited by guarantee cannot be incorporated for the purpose of making and distributing profits to its members.
• The memorandum of a company limited by guarantee cannot be registered without the authority of the Attorney General of the Federation, if after 30 days, the Attorney General does not authorize the Memorandum, promoters of the Company may advertise in 3 national daily newspapers and invite objections (if any).
• Where no objection is received, the Commission shall assent to the application and register same.
• The name of a company limited by guarantee must end with the words “Limited by Guarantee”
• The total liability of members to contribute to the assets of the company in the event of being wound is to a minimum of NGN100,000.00.
• Each member undertakes that, if the company is wound up while they are a member or within 1 year after ceasing to be a member, they shall contribute  to the assets of the company such amount as may be required for 1) payment of debts and liabilities of the company contracted before they cease to be a member and payment of the costs, charges and expenses of winding up; and 2) adjustment of the rights of the contributories among themselves, not exceeding a specified amount.

Limited Liability Partnership

• The Nigerian Company Law provides for a Limited Liability Partnership as a vehicle for conducting business in Nigeria. A limited liability Partnership is a body corporate separate from the partners and has perpetual secession.
• Every Limited Liability Partnership must have at least 2 partners and also appoint at least 2 designated partners who are individuals and at least 1 of the designated partners must be resident in Nigeria.
• A Limited Liability Partnership must have the words “Limited Liability Partnership” or “LLP” as the last words of its name.
• A Limited Liability Partnership can sue and be sued in its registered name.

Limited Partnership

• The name of a Limited partnership must end with the words “Limited Partnership” or “LP.”
• The members of a limited partnership is limited to a maximum of 20 members. It shall have 1 or more persons called general partners.
• A limited partner is not allowed to take part in the management of the partnership business otherwise such limited partner will be liable for all debts and obligations of the firm incurred while they took part in the management.
• The death, bankruptcy or incapacity of a limited partner is not a ground for winding up a limited partnership.

Incorporated Trustees

An incorporated Trustee is formed where 2 or more trustees are appointed by any community of persons bound by custom, religion, kinship or nationality for any religious, educational, literary, scientific, social, development, cultural, sporting or charitable purpose. The features include the following:

• The minimum number of trustees is 2.
• An incorporated trustee is a corporate body which can sue and be sued in the name of its trustees with perpetual succession and may have a common seal.
• The name of an incorporated trustee must contain the words “Incorporated Trustees of”
• The replacement of some or all the trustees and the appointment of additional trustees is done by a resolution at the general meeting subject to approval by the Corporate Affairs Commission (CAC).
• The income and property of the company is to be applied strictly to the promotion of the objects of the company and no portion is to be paid directly or indirectly by way of dividend or bonus to the members.
• Mergers between 2 or more incorporated trustees, having similar aims and objects is permitted subject to certain conditions.
• The Commission has the power to suspend the trustees of an association and appoint an interim manager, subject to oversight by the court.

Small Company

A company qualifies as a small company if it meets the following qualifying conditions;

• It is a private company.
• Its yearly turnover is not more than NGN25 million. 
• Its yearly net value is not more than half the value of the prescribed turnover.
• None of its members are alien.
• None of its members is a government, government corporation or agency.
• The directors between themselves hold at least 51 percent of its equity share capital.

Private LLCs

• Unlimited number of shareholders
• No personal liability for shareholders
• Taxed on its earnings at a corporate level. Shareholders are taxed on any distributed dividends
• Typical charter documents include: memorandum of incorporation, articles of association and shareholders' register
• Board of directors has the overall management responsibility. General manager has the day-to-day responsibility
• Shareholders subscribe for shares in a company. A company may have different share classes, for instance ordinary shares and preference shares
• Incorporation has to be registered in the Norwegian Register of Business Enterprises (the NRBE), within 3 months of incorporation

Public LLCs

• Unlimited number of shareholders
• No personal liability for shareholders
• Taxed on its earnings at a corporate level. Shareholders are taxed on any distributed dividends
• Typical charter documents include memorandum of incorporation and articles of association
• Shareholders are registered in a shareholders' register at a securities depository

Partnerships with unlimited liability

• Unlimited number of partners
• As a general rule, partners jointly have unlimited liability for all of the company's obligations. However, partners may agree in the partnership agreement that they will be severally liable according to its pro rata ownership in the partnership
• Not taxed on its earnings at a corporate level. Partners are taxed at their individual rates based on each partner’s part of the profits
• Typical charter documents include: partnership agreement
• Every partner has to sign the partnership agreement. Since this agreement is registered with the NRBE, the identity of partners is public information

Corporation (Sociedad Anónima or S.A.)

•  At least 2 shareholders and up to 749 shareholders.
• The liability of shareholders is limited to the amount of their contributions to capital.
• Profits distribution decision corresponds to the annual obligatory shareholders’ meeting.
• Typical charter documents include:
  • Bylaws and its amendments
  • Shares’ ledger
  • Share certificates
  • A book of minutes of shareholders’ meetings
  • A book of minutes of board of directors’ meetings
• Managed by a board of directors 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.
• Shares may be transferred without limitation, except if certain restrictions are established in the bylaws or in shareholders’ agreements.

Closed Stock Corporation (Sociedad Anónima Cerrada or S.A.C.)

• At least 2 shareholders and up to 20 shareholders.
• The liability of shareholders is limited to the amount of their contributions to capital.
• Profits distribution decision corresponds to the annual obligatory shareholders’ meeting.
• Typical charter documents include:
  • Bylaws and its amendments
  • Shares’ ledger
  • Share certificates
  • A book of minutes of shareholders’ meetings
  • A book of minutes of board of directors’ meetings (if the bylaws considers the board of directors as a corporate body).
• May be managed by a board of directors or only by a CEO appointed by the shareholders. The board (or the CEO, where applicable) is responsible for the administration and representation of the company.
• A right of first refusal applies, unless otherwise provided in the bylaws.

Open Corporation (Sociedad Anónima Abierta or S.A.A.)

• The corporation is open when one or more of the following conditions are met:

1. It has executed a primary public offering of shares or debentures convertible into shares;
2. It has more than 750 shareholders;
3. More than 35% of its capital is owned by 175 or more shareholders, without considering within this number those shareholders whose individual shareholding does not reach 2 per 1,000 of the capital or exceeds 5% of the capital;
4. It is incorporated as such; or,
5. All shareholders with voting rights unanimously approve the submission to such regime.

• The liability of shareholders is limited to the amount of their contributions to capital.
• Profits distribution decision corresponds to the annual obligatory shareholders’ meeting.
• Typical charter documents include:
  • Bylaws and its amendments
  • Share certificates
  • A book of minutes of shareholders’ meetings
  • A book of minutes of board of directors’ meetings.
• Managed by a board of directors 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.
• Shares may be transferred without limitation. Restrictions regulated in the bylaws or in shareholders’ agreements are not enforceable.
• Must be subject to an annual external audit that shall be carried out by external auditors registered before the External Audit Firms Registry (Registro de Sociedades de Auditoría Externa).

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

• At least 2 partners and up to 20 partners.

• The liability of the members of a S.R.L. is limited to the amount of their contributions.

• Rules for distribution of profits shall be included in the Partners have the freedom to decide about this matter in the bylaws.

• Typical charter documents include:

  • Bylaws and its amendments
  • A book of minutes of partners’ meetings
• The management of the S.R.L. is entrusted to one or more managers (whether partners or not), who shall represent it in all matters relating to its company purpose.
• A right of first refusal is always 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.

Branch of a Foreign Legal Entity (Sucursal)

• No minimum or maximum requirement for shareholders or partners of the parent company.

• The parent company is ruled by foreign laws, but shall comply with the applicable Peruvian legislation regarding the obligations undertaken by the branch in Peru.

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

• No limitations on remittance of profits from the branch to the parent company, subject to compliance of tax obligations.

• Typical charter documents include:

  • Certificate of good standing of the parent company
  • Bylaws of the parent company (which shall include a provision stating that such entity may establish branches abroad)
  • The minutes of the competent corporate body of the parent company containing, among others, the resolution regarding the establishment of a branch in Peru and the appointment of the permanent legal representative of the latter.

 

Subsidiary

• Two or more persons (but not exceeding 15) must act as incorporators and sign the articles of incorporation of the subsidiary.
• Any person, partnership, association or corporation singly or jointly may organize a corporation for any lawful purpose. Previously, only natural persons may act as incorporators.  The Revised Corporation Code has removed the minimum requirement of 5 incorporators, but has retained 15 as the maximum number of incorporators. The SEC rules, however, provide that the minimum number of incorporators is 2 (except for OPC which is one).
• No more than 15 natural persons should act as directors.
• There is no limitation on the number of shareholders. However, if the subsidiary would sell/issue shares of stock to more than 19 persons during a 12-month period, it must register its securities with the Philippines Securities and Exchange Commission (SEC). If the issuance would be to fewer than 20 persons (who are not existing shareholders) in a 12-month period, in lieu of registration, a notice of exemption may be filed with the SEC.
• Generally no personal liability of shareholders.

• Currently taxed at 25 percent of its taxable income from all sources within and without of the Philippines or, beginning on the 4th taxable year, immediately following the year in which such corporation commenced its business operations, 2 percent of its gross income from all sources within and without of the Philippines, whichever is higher. Dividends received by a nonresident foreign corporation from a Philippines subsidiary are subject to 25-percent withholding tax, subject to reduction pursuant to applicable tax treaties or to the dividends tax sparing rate of 15 percent under domestic law, subject to conditions.

• Typical charter documents: articles of incorporation and bylaws.
• Shares are either common (always voting) or preferred (voting or non-voting).
• Reportorial requirements to be submitted to the SEC annually, including audited financial statements (AFS).

Branch office

• As an extension of its head office/foreign parent, the liabilities of the branch are deemed liabilities of the head office.
• May operate only with a resident agent, who may also be the general manager, as its officer.
• Taxed at 25 percent of its taxable income or, beginning on the 4th taxable year immediately following the year in which such corporation commenced its business operations, 2 percent of its gross income, whichever is higher, from Philippine sources only. There is also a 15-percent branch profit remittance (to head office) tax.
• Reportorial requirements to be submitted to the SEC annually, including AFS.

Representative office

• As an extension of its head office/foreign parent, the liabilities of the representative office are deemed liabilities of the head office.
• May operate only with a resident agent.
• Not obligated to pay income tax, value added tax or local business taxes as it derives no income from the Philippines. Local government units, however, require the payment of fees for certain services provided to its constituents who conduct business within its jurisdiction.
• Reportorial requirements to be submitted to the SEC annually, including AFS.

Regional or area headquarters

• As an administrative branch of its head office/foreign parent, the liabilities of the regional or area headquarters are deemed liabilities of the head office.
• Not allowed to participate in any manner in the management of any subsidiary or branch that it might have in the Philippines.
• Granted tax incentives and benefits such as exemption from corporate income tax, and local taxes, fees or charges except real property tax on land improvements and equipment. It is subject to value-added tax except when the regional or area headquarters were already enjoying VAT exemption as of January 1, 2018.
• Reportorial requirements to be submitted to the SEC annually, including AFS.

Regional operating headquarters

• As an administrative branch of its head office/foreign parent, the liabilities of the regional operating headquarters are deemed liabilities of the head office.

• Regional operating headquarters are subject to regular corporate income tax.

• Reportorial requirements to be submitted to the SEC annually, including AFS.

Partnership

• At least 2 persons binding themselves to contribute money, property or industry to a common fund, with the intention of dividing the profits between/among themselves. A foreign individual or foreign company may be a partner in a domestic partnership. A foreign company must obtain a license to transact business in the Philippines from the SEC to be a general partner. No such license is required for a limited partner (foreign partner entered the partnership for investment purposes only and in no case will it participate in the management and control of the business operation).

  Partners are liable pro rata with all their property and, after all the partnership assets have been exhausted, for contracts entered into in the name and for the account of the partnership.
• Generally, every partner is an agent of the partnership, and the act of every partner binds the partnership. The articles of partnership is the contract or agreement of the partnership.
• A partnership is taxed as a corporation and is thus subject to regular corporate income tax of 30 percent of its taxable income. Since a partnership is taxed as a corporation, the tax rate might be reduced in light of the pending tax reforms in the Philippines, as indicated above.

Note: Under the Foreign Investment Act of 1991 (FIA), 100-percent foreign equity may be allowed in all areas of investment, except those reserved wholly or partially to Filipino citizens, by mandate of the Philippine Constitution and other existing laws. The Foreign Investment Negative List (FINL) indicates the industries where foreign equity is restricted.

Partnerships

General partnership (Spółka jawna, sp. j.)

• A partnership which runs an enterprise under its own business name and is not any other commercial partnership

• Has no legal personality of its own, which means that partners bear joint and several liability for the obligations of the partnership

• In general, each partner may represent the partnership and manage its affairs (unless otherwise specified in the deed of partnership)

• Decisions regarding management of the partnership are made at partner meetings

• No share capital requirements exist

Professional partnership (Spółka partnerska, sp. p.)

• Runs an enterprise under its own business name
• Formed for the purpose of practicing 1 or more freelance professions
• Partners may only be natural persons and must be licensed to practice a freelance profession, as defined by Polish law (ie, advocates, pharmacists, architects, building engineers, expert auditors, insurance brokers, tax consultants, securities brokers, investment advisers, accountants, physicians, dental surgeons, veterinary surgeons, notaries, nurses, midwives, legal counsels, patent agents, property experts and sworn translators)
• Partners are not liable for actions or omissions of other partners or personnel supervised by other partners
• Partners may appoint a management board to run and represent a partnership

Limited liability partnership (Spółka komandytowa, sp. k.)

• An enterprise under its own business name

• At least 1 partner (general partner) has unlimited liability for the partnership's obligations towards the partnership's creditors and at least 1 partner (limited partner) has limited liability in this respect

• Business name of a limited partnership must include surname(s) of 1 or more of general partners and an additional designation of "spóka komandytowa"

Limited joint-stock partnership (Spółka komandytowo-akcyjna, SKA)

• An enterprise under its own business name

• Considered to be a partnership, whilst incorporating elements of a joint-stock company (eg, it has a general meeting and a supervisory board – the latter only being mandatory in respect of larger enterprises)

• At least 1 partner (general partner) has unlimited liability towards partnership's creditors and at least 1 partner is a shareholder

• Initial capital is at least PLN50,000

• There must be at least 2 partners: 1 general partner and 1 limited partner

Corporations (commercial companies)

Limited liability company (Spóka z ograniczon odpowiedzialnoci)

• One or more shareholders (some restrictions re-establishment by a sole shareholder described below)

• PLN5,000 minimum share capital

• Liability limited to share capital

• Procedures of formation and dissolution prescribed by statute

• Most popular legal entity form in Poland

• Represented by its management board

• May be required to appoint a supervisory board (if share capital exceeds PLN500,000 and number of shareholders exceeds 25)

Joint-stock company (Spółka akcyjna)

• 1 or more shareholders

• PLN100,000 minimum share capital

• Liability limited to share capital

• Generally suited for a larger number of shareholders

• Stocks fungible and can be traded on stock markets

• Shares must have dematerialized form from 1 March 2021

• Represented by its management board

• Obligatory supervisory board and/or audit committee

Simplified joint-stock company (Prosta spółka akcyjna)

• Planned effective date of regulation – July 2021

• 1 or more shareholders

• PLN1 minimum share capital

• Liability limited to share capital

• Generally suited for a startup project

• Stocks cannot be traded on stock markets

• Represented by its management board or the board of directors

• Supervisory board not obligatory

Branches and representative offices of a foreign company

Branches

• May only conduct business activity of the same scope as that conducted by the foreign parent company in its home state
• Must be registered with the relevant registry court
• Must conduct business under a business name which includes the business name of the parent company as well as the designation "branch"
• Separate books and accounts must be kept in Polish and in PLN by the branch

Representative offices

• May only conduct promotion and advertising activity in Poland for the benefit of the foreign parent company (no sale of products or services in Poland is permitted)
• Must be entered in a register of foreign representative offices (with exceptions made for banks and credit institutions)
• Must include business name of the foreign parent company and a designation "representative office" in its name
• Registration needs to be renewed every 2 years

Phase 1: Definition of type of company and draft of the company’s bylaws. These include:

• Name
• Purpose
• Registered office;
• Share capital
• For LDA. companies, number of shareholders and distribution of share capital
• Management structure and binding form of the company
• For companies, supervision structure.

In case the shareholder is a non-resident entity (company or individual), it is mandatory to apply for a Portuguese Taxpayer Number (NIPC/ NIF). In case the shareholder(s) is(are) non-EU resident(s) it is mandatory to appoint a tax representative. The representative can be an individual or a company resident in Portugal.

Phase 2: Application for approval of the corporate name.

Phase 3: Opening of bank account, for the purposes of the deposit of the share capital.

Phase 4: Execution of the incorporation documentation, comprising the incorporation agreement and the bylaws. These documents are submitted to the Registrar of Companies for public registration purposes (regular registration requests cost EUR 475, urgent requests approx. EUR 950).

 

Phase 5: Ultimate Beneficial Owner (UBO) declaration submission declaration to the Central Registry of Beneficial Ownership (Registo Central do Beneficiário Efetivo)^[2].

The share capital may be contributed in cash or in kind (in which case additional formalities for the evaluation and/or registration of the contributions to the share capital may be required).

_{^[2] Under Directives (EU) 2016/2258 and 2015/849, on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and their transposition to Portuguese jurisdiction, through Laws no. 83/2017, August 18 and no. 89/2017, August 21, all Portuguese companies are now required to comply with information disclosure requirements regarding their ultimate beneficial ownership (UBO).}

Puerto Rico corporate matters are regulated by the Puerto Rico General Corporations Law and the Internal Revenue Code of 2011. Puerto Rico offers several attractive alternate vehicles for persons doing business in Puerto Rico. Corporations and limited liability companies are the most common entities by which investors enter the Puerto Rican marketplace.

Corporations

• Unlimited number of shareholders

• Generally no personal liability for shareholders

• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends

• Typical charter documents include articles of incorporation, bylaws, organizational board resolutions, stock certificates and stock ledger

• Board of directors has overall management responsibility; officers have day-to-day responsibility

Limited Liability Companies

• Unlimited number of members allowed
• Generally no personal liability for the members
• May elect to be treated as a corporation or partnership under Puerto Rico tax laws
• Under US tax laws, a Puerto Rico LLC is automatically treated as a foreign corporation. However, it  may elect to be treated as a partnership or disregarded entity by filing Form 8832 with the IRS
• Typical charter documents include: certificate of formation; operating agreement

• Operating agreement sets forth how the business is to be managed; a member (owner) or manager can be designated to manage the business (please note that operating agreements are private documents and are not filed in the Puerto Rico State Department)

• Members typically contribute money or services to the LLC and receive an interest in profits and losses

Joint stock company (JSC)

• Unlimited number of shareholders; minimum number of shareholders is two
• Personal liability of shareholders is limited to their contribution to the share capital; however, in certain situations, their liability may be extended (eg, piercing the corporate veil)
• A JSC is registered by default by the Trade Registry as a micro-enterprise and will automatically switch to the corporate income tax regime (ie, taxing the profits) after the level of taxable revenues reaches the threshold of EUR1 million
• A JSC may opt to apply the corporate income tax regime since incorporation provided that it fulfills certain conditions in terms of value of the share capital and number of employees
• A fiscal registration number is allocated by the Trade Registry at the moment JSC is incorporated; other types of fiscal registrations (eg, for VAT purposes, for social security contributions) should be considered depending on the economic activity to be performed
• The fiscal year is generally a calendar year with the possibility to change it with another period, but only if the JSC is subject to corporate income tax regime
• Typical charter documents:
  • Articles of association
  • Resolutions of the general meeting of shareholders
  • Resolutions of the board of directors
  • Shareholders' register
• Shares can be either common or preferred

Limited liability company (LLC)

• Up to 50 shareholders; may be incorporated/owned by a sole shareholder
• Personal liability of shareholders is limited to their contribution to the share capital; however, in certain situations, their liability may be extended (eg, piercing the corporate veil)
• An LLC is registered by default by the Trade Register as micro enterprise and will automatically switch to the corporate income tax regime (ie, taxing the profits) after the level of taxable revenues reaches the threshold of EUR1 million
• An LLC may opt to apply the corporate income tax regime since incorporation provided that it fulfills certain conditions in terms of value of share capital and number of employees
• A fiscal registration number is allocated by the Trade Registry at the moment LLC is incorporated; other
• types of fiscal registrations (eg, for VAT purposes, social security contributions) should be considered depending on the economic activity to be performed
• The fiscal year is generally the calendar year with the possibility to change it with another period, but only if the LLC is subject to the corporate income tax regime
• Typical charter documents include:
  • Articles of association
  • Resolutions of the general meeting of shareholders
  • Resolutions of the board of directors
  • Shareholders' register
• Only one class of shares is allowed

Public joint-stock company

• Unlimited number of shareholders
• Generally no personal liability of the shareholders
• Typical documents include the charter, regulations, board resolutions and resolutions of the general shareholders' meetings

• General shareholders’ meeting is the highest management body; board of directors (obligatory in the case of 50-plus shareholders) exercises overall management of the company; sole executive body (ie, the management board) responsible for day-to-day management

• The shares are freely transferable. It is prohibited to establish the company’s or its shareholders’ pre-emptive right (or, more correctly, the right of first refusal) to acquire shares alienated by the shareholders of the company

Non-public joint-stock company

• Generally no personal liability of the shareholders

• Typical documents include the charter, board resolutions (if any) and resolutions of the general shareholders' meetings

• General shareholders’ meeting is the highest management body; board of directors (if any) exercises overall management of the company; sole executive body (ie, management board) responsible for day-to-day management

• Non-public joint-stock company may not conduct open subscription for shares or otherwise offer them for acquisition to an unlimited number of people, and

• The company’s shareholders enjoy the pre-emptive right to purchase shares offered to be sold by other shareholders in the company at a price offered to a third party and in proportion to the number of the shares held by each of them unless another procedure is provided for by the company’s charter.

Limited liability company (LLC)

• Up to 50 members

• Generally no personal liability of the members

• Typical documents include the charter, board resolutions (if any) and resolutions of the general shareholders' meetings

• Members have the right to sell its participatory interest in the charter capital or a part thereof to 1 or several members of the company. No consent shall be required from the company or other members of the company to do so unless otherwise stipulated by the company’s charter. The company’s members have the pre-emptive right to acquire participatory interest(s) from other participants; waiver from the pre-emptive right is allowed.

Limited liability company (LLC)

• LLC is one of the most common forms of legal entity chosen by foreign investors in the Kingdom of Saudi Arabia (KSA)

• Establishing an LLC is a multistep process. Incorporating an LLC may take up to several months from the date of submission of application to the Ministry of Investment of Saudi Arabia  (MISA)

• The Ministry of Commerce (MOC) subsequently issues a commercial registration certificate before the LLC is considered fully registered in KSA

• After the incorporation, various governmental files and documents must be applied for in order for the LLC to be fully operational. This post-incorporation phase can take a couple up to several months

Branch of a foreign company

• Foreign investors may also choose to establish a branch instead of an LLC to do business in the KSA
• A branch operates on behalf of the parent company (foreign registered company) and has no separate legal existence in KSA

• Registration of a branch in relation to issuance of the foreign investment license by MISA and the commercial registration certificate by MOC follows the same general procedure as that of an LLC

• Incorporation of a branch may take up to several months from the date of submission of application to MISA (subject to any delays caused by government authorities)

• The parent company of the branch has liability for the branch's activities that it undertakes in KSA
• The paid-up capital for a branch does not confer limitation of liability as compared to an LLC. The capital in a branch simply serves as a security for the Saudi market and
• With regard to tax and a number of other matters, a permanent branch is treated in the same manner as a 100 percent foreign-owned LLC

• After the registration, various governmental files and documents must be applied for in order for the branch to be fully operational. This post-registration phase can take up to a couple to several months

For future consideration, please note that an LLC can add shareholders if the company intends to expand in KSA. On the other hand, a branch cannot add shareholders as it is an extension of its foreign parent company.

Limited liability company

• Separate legal entity
• A company with a share capital may be incorporated as a private company if its constitution contains a limitation on the number of shareholders to not more than 50 members and provides for restrictions on the right to transfer its shares whereas a public company (ie, a company which is not a private company) can have more than 50 members and its Constitution need not provide for similar share transfer restrictions
• Limited liability for the shareholders, although in exceptional circumstances a court may lift the corporate veil and look up to the members of the company which may result in personal liability
• 1 tier tax system; taxed on its profits at a corporate level and dividends are distributed to shareholders tax free
• Typical charter document is company's constitution
• The business of the company is managed by and under the board of directors who may exercise all powers of the company except any powers reserved for the members in general meeting by the CA or its constitution. Ownership and management of a private company can be separated although we note that in some cases, a member of a private company may also be a director in the same company
• Shareholders subscribe and/or purchase shares in the company. Shares can come in the form of different classes such as ordinary or preference shares

The South African companies registrar is the Companies and Intellectual Property Commission (CIPC), whose functions include the registration and maintenance of companies. Upon making an application to register a company with the CIPC, the applicant will be required to submit the company’s adopted constitutional document which may either take the form of the standard Memorandum of Incorporation (MOI) as provided by law or a customized MOI which has been tailored to include the company’s powers and impose specific protocols to be complied with by the shareholders and directors in respect of their rights and obligations in and to the company, particularly, when dealing with or on behalf of the company.

We point out that a company is governed, firstly, by the South African Companies Act 71 of 2008, (Companies Act) and, secondly, by its MOI. The MOI's provisions must be consistent with the unalterable provisions of the Companies Act and can modify the application of alterable provisions of the Companies Act. Any provision of a MOI is void to the extent that it contravenes or is inconsistent with the Companies Act. Shareholders of a company may, although not mandatory, enter into a shareholders' agreement with one another relating to their rights and obligations in and to the company. Importantly, such agreement must be consistent with the Companies Act and the company's MOI and any provisions that are inconsistent with either, will be void to the extent of the inconsistency.

As it stands the CIPC does not require a specified minimum number of South African directors to be appointed when registering a company. However, any foreign shareholder of a South African company will need to have its share certificate endorsed "non-resident" as part of the South African exchange control regulations. All companies incorporated in South Africa must have a registered physical address in South Africa and it is the responsibility of each company to ensure that it keeps and maintains an accurate of its shareholders by way of a securities register.

Private company

A private company is a non-state owned company with an MOI prohibiting any share offering to the public and restricting transfer of its shares.

Depending on:

• the requirements of a private company's MOI
• whether it holds assets in a fiduciary capacity for unrelated persons and
• its public interest score (which is determined with reference to (i) its number of employees, (ii) the value of its third-party liability, (iii) its annual turnover and (iv) the number of holders of beneficial interests in the company securities),

A private company may be required to be audited and its audited annual financial statements filed with the CIPC. Depending on its public interest score, it may also be required to have a social and ethics committee.

A private company is a separate legal entity which is owned by shareholders with limited liability. There must be at least one shareholder. The relationship between shareholders and the company is regulated by the Companies Act as well as the company's MOI and may be further regulated by a shareholders' agreement.

A private company is required to have at least one director, in addition to the minimum number of directors required to satisfy any applicable requirement to appoint an audit and/or social and ethics committee.

A director of a private company can be held liable in the following instances:

• In terms of principles of common law relating to delicts for any loss, damage or costs sustained by the company as a consequence of any breach by a director of their fiduciary duties or duty of care, skill and diligence;

• In terms of those sections of the Companies Act which provide for director's liability; or

• In terms of any provision of the company's MOI which provides for director's liability.

Primarily, directors are required to act in the best interest of the company at all times. Accordingly, section 76 of the Companies Act makes provision for the partial codification of the South African common law duties of directors, as well as the standards of conduct required to be performed and exercised by a director. These include:

• To not use their position or any information obtained while acting in the capacity of a director to gain a personal advantage or for someone else, other than the company;
• To not gain a personal advantage, or for another person other than the company; or
• To knowingly cause harm to the company or a subsidiary of the company; and
• To communicate to the board any non-public, material information that comes to the director’s attention.

When compared to a public company a private company is subject to limited accountability and transparency requirements. For example, a private company is not necessarily required to prepare audited financial statements.

A private company must every year lodge its annual returns with the CIPC and must have a registered physical address in South Africa.

Public company

It is a requirement for a public company to be audited and its audited annual financial statements must be filed with the CIPC. It is also required to have an audit committee and a social and ethics committee.

A public company's shares may be freely transferred or traded. The shares of a public company may or may not be listed on a stock exchange such as the Johannesburg Stock Exchange.

A public company must have at least 3 directors, in addition to the minimum number of directors required to satisfy any applicable requirement to appoint an audit and/or social and ethics committee.

The circumstances under which a director of a public company could be held liable are the same as that of a private company.

A public company must lodge its annual returns with the CIPC every year and must have a registered physical address in South Africa.

Personal liability company

A company is a personal liability company if it satisfies the criteria for a private company and its MOI states that it is a personal liability company. The effect of a company being a personal liability company is that its directors, including its past directors, are jointly and severally liable, together with the company, for any debts and liabilities of the company that are, or were, incurred during their respective periods of office.

Personal liability companies are primarily used by associations of professional persons, like attorneys, accountants, auditors and quantity surveyors who are required under their professional codes, laws or regulations, to practice their profession in entities that permit personal liability.

External company (branch office)

A foreign company that does not want to incorporate a subsidiary in South Africa may set up a branch office or an external company in terms of the Companies Act.

A foreign company which conducts business in South Africa must register as an external company with the CIPC within 20 business days after it first begins to conduct business, or non-profit activities in South Africa. A foreign company will be regarded as conducting business in South Africa if it is either:

• a party to one or more employment contracts in South Africa; or
• engaging in conduct or a pattern of activities in South Africa over a period of at least 6 months, that would lead a person to reasonably conclude that the company intended to continually engage in business activities in South Africa.

To effect registration with the CIPC, the company will need to submit its foreign constitution and certificate of registration.

It is not required for a company to set up a local board of directors but there must be at least one representative present in South Africa for tax purposes.

An external company must lodge its annual returns with the CIPC every year, and must also have a registered physical address in South Africa.

Joint-stock company (Jusik Hoesa)

• Unlimited number of shareholders
• Generally no personal liability of the shareholders outside of their financial contribution in the form of purchased shares
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends
• Typical charter documents include: AOI; share certificates; and shareholders' registry
• Board of directors decides important matters related to daily operations and the representative director or executive officer has authority to make decisions binding the company
• Shareholders purchase shares in the company, either common or preferred

An external audit is required for:

• Publicly listed companies, or companies that will be publicly listed within that fiscal year or the following fiscal year
• Joint-stock companies with total assets or annual sales revenue of at least KRW50 billion or that satisfy two or more of the below conditions as of the immediately preceding fiscal year:
  • Total assets of at least KRW12 billion
  • Total debt of at least KRW7 billion
  • Total annual sales revenue of at least KRW10 billion
  • At least 100 employees

Limited company (Yuhan Hoesa)

• Unlimited number of members allowed
• Generally no personal liability of the members outside of their financial contribution in the form of purchased units
• Taxed on its earnings at a corporate level and members are taxed on any distributed dividends
• Typical charter documents include: AOI, and members' registry
• Directors decide important matters related to daily operations and director (in case a limited company has 1 director) or representative director who is elected at the general meeting of members (in case a limited company has two or more directors) has authority to bind the company
• Members purchase units in the company, but only 1 class of units is allowed
• An external audit is required for limited companies with total assets or annual sales revenue of at least KRW50 billion, or limited companies that meet three or more of the following thresholds
  • Total assets of at least KRW12 billion
  • Total debt of at least KRW7 billion
  • Total annual sales revenue of at least KRW10 billion
  • At least 100 employees
  • At least 50 members
• Companies that changed their corporate structure from a joint-stock company to a limited company after November 1, 2019 are subject to the external audit conditions that are applicable to joint-stock companies for five years after registering their change of corporate structure.

Branch

A foreign company intending to directly engage in business in Korea may appoint a representative in Korea and establish a branch in Korea with the following conditions:

• Not a separate and distinct entity; unlike other separate and distinct entities, legal liabilities extend to the foreign company (head office)
• Taxed on its domestic source income in Korea at a branch level; must file tax returns with tax office within three months after the end of each fiscal year
• Establishment process: report to foreign exchange bank; court registration; business registration is required
• Representative in Korea has authority to bind the branch; identity of the representative in Korea is publicly disclosed, and
• Net income can be remitted abroad from Korea after closing of accounts for each fiscal year; however, funds remitted to a branch as operating funds cannot be repatriated abroad from Korea until liquidation of the branch is completed.

Branch (Sucursal)

• Secondary establishment that is subordinated to the principal, economically and legally
• Autonomy to operate with its own organization different from the principal establishment Without legal personality (ie, branches are not a separate legal entity)
• Permanent activity
• Total or partial conduction of the principal establishment's activity
• Branches are taxed under the general provisions of the Corporate Income Tax. Moreover, if the branch is also a permanent establishment for VAT purposes, quarterly VAT tax returns will need to be filed (as a general rule)
• The organizational documents are the principal company's bylaws (estatutos sociales)

Limited liability company (Sociedad Limitada)

• Unlimited number of members is allowed
• Generally no personal liability of members
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends, although double taxation relief may apply
• The organizational documents are the company's own bylaws (estatutos sociales)
• Management body has management responsibility. Sole directors, joint directors (if they all sign, administradores mancomunados) and joint and several directors (administradores solidarios) have authority to bind the company. If the company has a board, directors do not have authority to bind the company unless powers are delegated to them. Powers can be delegated to attorneys
• Ordinary shares and preferred shares are possible. Shares are transferable but typically have some restrictions (i.e., preferential acquisition rights)
• Annual accounts are registered at the Commercial Registry, reporting the economic status of the company

Joint-stock company (Sociedad Anónima)

• Unlimited number of shareholders
• Generally no personal liability of the shareholders
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends, although double taxation relief may apply
• The organizational documents are the company's own bylaws (estatutos sociales)
• Management body has management responsibility. Sole directors, several directors (if they all sign, administradores mancomunados) and joint and several directors (administradores solidarios) have authority to bind the company. If the company has a board, directors do not have authority to bind the company unless powers are delegated to them. Powers can be delegated to attorneys

• Ordinary shares and preferred shares are possible. Shares are generally freely transferable. Can be listed in a stock market and

• Annual accounts are registered at the Commercial Registry, reporting the economic status of the company.

Limited company (aktiebolag or AB)

• Minimum of 1 shareholder

• Generally no personal liability of shareholders

• An AB is taxed on its earnings at a corporate level, and shareholders are taxed on salary withdrawn and distributed profits from the AB. The AB is subject to a Swedish corporate income tax rate which currently amounts to 20.6 percent

• Typical charter documents include:
  • Articles of association
  • Minutes of shareholder meetings
  • Organizational board resolutions
  • Share certificates
  • Share ledger
• Board of directors has overall management responsibility; managing director and other officers have day-to-day responsibility
• Shareholders typically purchase shares in an AB. Separate classes of shares with different rights (eg, voting, dividends) are commonly used
• Annual report shall be filed annually with the Swedish Companies Registration Office (Bolagsverket or SCRO)
• There are 2 types of ABs: private and public

Trading partnership (handelsbolag or HB)

• 2 or more partners (natural persons or legal entities) are required
• No startup capital requirement
• HBs are tax transparent. Partners are taxed for their part of the HB's surplus (ie, income tax and social security contributions)
• Incorporated by registration with the Swedish Companies Registration Office (Bolagsverket or SCRO)
• Partners are personally responsible for the HB's debts, including debts that already exist when becoming a partner
• Business name must contain the word "handelsbolag"
• An authorized or approved auditor and filing of annual accounts are required where an HB meets certain criteria regarding the partners, number of employees, balance sheet total and net turnover

Limited partnership (kommanditbolag, KB)

• 2 or more partners (natural persons or legal entities) are required of which 1 shall be a general partner and 1 a limited partner
• General partners have unlimited personal responsibility (jointly and severally) for the agreements and debts of a KB. Limited partners are only responsible for the amount contributed. The responsibility includes debts that already exist when becoming a partner
• No startup capital requirement for general partners; capital requirement for each limited partner is at least SEK1
• KB is tax transparent. Partners are taxed for their part of the KB's surplus (ie, income tax and social security contributions)
• Incorporated by registration with the Swedish Companies Registration Office (Bolagsverket or SCRO)
• Business name must contain the word "kommanditbolag"
• An authorized or approved auditor and filing of annual accounts are required if a KB meets certain criteria regarding partners, number of employees, balance sheet total and net turnover

Branch office (filial, Branch)

• A foreign-based company that engages in business activities in Sweden can register a branch office, with separate management in Sweden

• A branch is not a separate legal entity but is a part of a foreign-based company

• Does not have independent capital and assets, and liabilities are a part of total assets of a foreign-based company

• 1 managing director is appointed to run the business activities in Sweden. The managing director and any deputy managing directors are normally required to be resident within the EEA

• A branch is subject to a Swedish corporate tax rate which currently amounts to 20.6 percent Incorporated by registration with the Swedish Companies Registration Office (Bolagsverket or SCRO)

• A business name must contain the word "filial"

• A branch is to keep its own accounting records, and these are to be kept separate from the foreign-based company. Annual report of a branch office and a foreign company are normally required to be filed with the SCRO

• An authorized or approved auditor is required where the branch office meets certain criteria regarding the number of employees, balance sheet total and net turnover

This is an overview of certain aspects of Swiss corporate law as of the date hereof which does not purport to be comprehensive, and may not be relied upon as legal or other advice or in any other way.

Stock corporation (Aktiengesellschaft, AG / Société Anonyme, SA)

• Unlimited number of shareholders allowed but at least 1 founder (individual or legal entity)

• The stock corporation has sole liability for its debts and liabilities

  Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends

• Board of directors is the managing body and has the authority to represent the stock corporation with respect to third parties. The day-to-day management may be delegated to third parties by respective board resolution and enacting of organizational by-laws and

• Annual audit report required (waiver possible for small companies).

Limited liability company (Gesellschaft mit beschränkter Haftung, GmbH / Société à Responsabilité Limitée, SARL)

• Unlimited number of quotaholders allowed but at least one founder (individual or legal entity)

• The limited liability company has sole liability for its debts and liabilities, although articles of incorporation may impose obligation to pay in additional capital

• Taxed on its earnings at a corporate level and quotaholders are taxed on any distributed dividends

• In absence of any rules to the contrary, the management is delegated to all partners
• Generally, annual audit report required (waiver possible for small companies) and
• Legal form intended for small and medium-sized companies.

• Company limited by shares
• Closely-held company limited by shares
• Limited company
• Branch office of a foreign company

Private limited company

• At least 2 shareholders are required.
• Unlimited number of shareholders.
• No personal liability of shareholders.

• Taxed on its earnings at a corporate level, and shareholders are taxed on any distributed dividends.

• Typical charter documents include:
  • Certificate of incorporation
  • Memorandum of association and articles of association
  • Company's affidavit
  • List of shareholders and share certificates and
  • Share register book.
• Board of directors has overall management responsibility.
• No invitation to subscribe for shares can be made to the public.
• 2 classes of shares may be issued concurrently (ie, common shares and preference shares).
• Private limited company may not own its own shares (ie, treasury shares are not allowed).
• A share is indivisible, but a share par value could be amended.
• A shareholder cannot avail himself or herself of a set-off against the company as to payments on shares
  (ie, debt to equity conversions in a private limited company are generally not permissible).

Public limited company

• At least 15 shareholders are required.
• Unlimited number of shareholders.
• No personal liability of shareholders.
• Taxed on its earnings at a corporate level, and shareholders are taxed on any distributed dividends.
• Typical charter documents include:
  • Certificate of incorporation
  • Memorandum of associations and articles of association;
  • Company's affidavit
  • List of shareholders and share certificates and
  • Share register
• Board of directors has overall management responsibility.
• Stock offerings can be categorized into 2 types: public offering and private placement. Public limited company may make a private placement of its shares without prior If a public limited company intends to make a public offering, it must obtain prior approval from the Securities and Exchange Commission of Thailand. Shares of public limited company may or may not be traded on the Stock Exchange of Thailand.

Partnerships

Unregistered ordinary partnership

• 2 or more partners join together for a common undertaking to share profits by virtue of a contractual relationship between member partners.
• Not legally recognized as a legal person which exists separately from the partners.
• All partners are jointly and unlimitedly liable for acts made by any partner in the ordinary course of business of a partnership. Even if partners agree to restrict the powers of certain partners, such restriction will not have effect on third persons. Creditors can directly seek performance from any individual partner without first claiming against the assets of the partnership.

Registered ordinary partnership

• 2 or more partners join together for a common undertaking to share profits by virtue of a contractual relationship between member partners.
• A legal entity separate from the partners themselves.
• Personal liabilities of each partner are generally Creditors may demand performance under an obligation from the partnership itself or any of its partners.

Limited partnership

• 2 or more partners join together for a common undertaking to share profits by virtue of a contractual relationship between member partners.
• A legal entity separate from the partners themselves.
• There are 1 or more partners who are limited in their liability to the extent of their contributions; there must be at least 1 partner who is unlimitedly liable for all obligations of a partnership and eligible to act as Managing Partner.

Incorporation procedures for a JSC and an LLC are very similar and include:

• Preparation of a company's articles of association
• Registration of a company with the relevant Trade Registry
• Announcement of a company in the Trade Register
• Registration with the relevant tax office

Limited Liability Company

LLC is a legal entity managed by one or more directors who are responsible for making major decisions and overseeing the general affairs of the company. Subject to the charter of the company and the Law of Ukraine “On Limited Liability and Additional Liability Companies” (“LLC Law”), participants or supervisory board (if established) have the power to appoint and remove directors.

Private Joint-Stock Company (PJSC)

PJSC is a legal entity managed by one or more directors who are responsible for making major decisions and overseeing the general affairs of the company. Subject to the charter (articles of association) of the company and the JSC Law, the shareholders or the supervisory board generally have the power to appoint and remove directors.

LLC

• Number of shareholders must not exceed 50 and must not be less than 21 (please note, however, that UAE  ownership may fall below 51 percent where there is 100-percent GCC ownership. This excludes entities conducting activities included on the strategic list published pursuant to the Cabinet Decision).
• Shareholders' liability limited to their share in the capital
• A UAE national or a company wholly owned by UAE nationals must hold at least 51 percent of the shares.
• May not engage in the business of insurance, banking or investment on behalf of other parties

Branch office

• Used by foreign companies wishing to establish a business presence in mainland UAE
• Permitted to perform contracts or conduct activities as specified in its license but is prohibited from conducting activities relating to direct trading in tangible goods.
• Legally regarded as part of its parent company (no separate legal identity). Activities limited to those of its parents, as stated in its parent's objects articles of association/bylaws.
• Required by law to appoint a national agent, who must be a UAE national or a company wholly owned by a UAE national and who has no entitlement to the business or the management of the branch office.
• Managed by a sole manager who will operate pursuant to a power of attorney issued by the parent company.
• Required to be registered with the UAE Ministry of Economy (MOE) and to provide a bank guarantee issued by a UAE registered bank in the amount of AED 50,000 that is payable in favor of the MOE and to provide a bank guarantee in the amount of AED 50,000 that is payable in favor of the MOE

Representative office

• Used by foreign companies wishing to establish a business presence in the UAE
• Activities limited to gathering information and soliciting orders and projects to be performed by the parent company's head office
• Serves as an administrative and marketing center for the parent company
• Required by law to appoint a national agent, who must be a UAE national or a company wholly owned by UAE national.
• Identical in all respects to a branch office except that it is not permitted to perform contracts or any other activities other than marketing of the parent company's products and services and not allowed to issue invoices in its name
• Required to be registered with the MOE and to provide a bank guarantee issued by a UAE registered bank in the amount of AED 50,000 that is payable in favour of the MOE

FZ-LLC

• Can be owned by 1 or more foreign shareholders (individuals or corporate bodies)
• No foreign ownership restrictions
• Used by foreign companies wishing to establish a business presence in the UAE
• As the free zone is deemed to be offshore, it allows for 100 percent foreign ownership
• Shareholders' liability limited to their share in the capital
• No corporate or income tax for a guaranteed 50-year period; 100 percent repatriation of capital possible
• Activities cannot be carried out directly in mainland UAE
• An FZ-LLC wishing to carry out business in mainland UAE should appoint a mainland UAE registered company to act as its distributor. Alternatively, it may set up a branch office in the respective relevant Emirate
• Exemption from customs duty for goods entering the free zone. Customs duties will apply to goods leaving the free zone into the mainland UAE market

FZ-Branch

• Used by foreign companies wishing to establish a business presence in the UAE
• Legally regarded as part of its parent company
• No share capital requirements as it is not a separate legal entity, and
• Can conduct all or some of the operations inherent in the parent company's business

Dual Licensee Branch

• Used by foreign companies wishing to establish a business presence in the UAE and to operate onshore
• It is only an option in certain free zones (such as Dubai International Financial Centre, Dubai Airport Free Zone, Dubai Multi Commodities Centre and in all of the Abu Dhabi free zones)
• Permitted to perform contracts or conduct activities as specified in its licensee but is prohibited from conducting activities relating to direct trading in tangible goods
• Legally regarded as part of its parent company (no separate legal identity). Activities limited to those of its parents, as stated in its parent's articles of association/bylaws
• Managed by a sole manager who will operate pursuant to a power of attorney issued by the parent company or the parent company's shareholder(s) 
• Can operate out of the same office as its parent company located in the free zone
• The parent company must not have any other branches in the UAE and cannot itself be a branch

The below summary provides an overview of three corporate structures that can be used in the UK. A further alternative, being a public limited company, could be useful in some instances (as it enables capital to be raised from the public), but is less commonly used.

Private limited company

• Separate and distinct legal entity. Subject to certain exceptions (such as fraud), shareholders are not liable for debts and obligations of the company
• Taxed on its earnings at a corporate level and shareholders taxed on any distributed dividends
• Management and organization governed by articles of association. Board of directors have overall management responsibility
• Must file a confirmation statement at least every 12 months confirming there have been no changes since the last filing, or otherwise setting out (amongst other things) details of any changes to the company's share capital, people with significant control and directors*
• Must maintain a register of individuals or legal entities that have control over them (people with significant control) and maintain the public register with details of such individuals or legal entities (as applicable)
• Must file annual accounts (subject to certain exceptions for small and dormant companies). Accounts are publicly available*
• Event-driven filings need to be made from time to time (such as changes to the directors or other corporate details)*

Limited liability partnership (LLP)

• Distinct legal entity separate from its members
• Must file a confirmation statement at least every 12 months setting out (amongst other things) details of LLP's membership*
• Must maintain a register of individuals or legal entities that have control over them (people with significant control) and maintain the public register with details of such individuals or legal entities (as applicable)
• Must file annual accounts (subject to certain exceptions for small and dormant LLPs). Accounts are publicly available*
• Event-driven filings need to be made from time to time (such as changes to the members of the LLP)*

Registered UK establishment

• Alternative to establishing a separate UK private limited company. Not a separate legal entity. Represents a local registration of the overseas company 
• Registration mandatory if operating an establishment in the UK. Registration must be effected within 1 month of opening the UK establishment. Cost of registration subject to the country of incorporation of the overseas company
• Generally subject to UK corporation tax on any profits attributable to the establishment
• Generally subject to similar reporting requirements as a UK private limited company. Requires a UK registered address
• If the overseas company is required (by the laws of its country of incorporation) to prepare annual accounts, such accounts must also be filed in the UK within a specified timeframe. The accounts must relate to the overseas company as a whole, not just the UK establishment. Other event-driven filings (such as changes to the registered office of the establishment) are required from time to time (in respect of both the establishment and the overseas company)

C corporation

• Unlimited number of shareholders
• Generally no personal liability of the shareholders
• Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends
• Typical charter documents include: articles/certificate of incorporation; bylaws; organizational board resolutions; stock certificates; and stock ledger
• Board of directors has overall management responsibility; officers have day-to-day responsibility
• Shareholders typically purchase stock in the corporation, either common or preferred, and

• Most states require an annual report to be filed with the Secretary of State, typically reporting the name identity of the officers and directors of the corporation

S corporation

 

• Up to 100 shareholders; only 1 class of stock allowed
• Generally no personal liability of the shareholders
• With the filing of an IRS Form 2553, a C corporation becomes a S corporation, whereby the profits and losses are passed through to the shareholders
• Typical charter documents include: articles/certificate of incorporation; bylaws; organizational board resolutions; stock certificates; stock ledger; IRS S corporation election form and any applicable state filings
• Board of directors has overall management responsibility; officers have day-to-day responsibility and
• Shareholders typically purchase stock in the corporation, but only 1 class of stock is allowed

Limited liability company (LLC)

Unlimited number of members allowed

Generally no personal liability of the members

Not subject to income tax (unless chosen to be taxed); profits and losses are passed through to the members

Typical charter documents include: articles of organization or certificate of formation; operating agreement

Operating Agreement sets forth how the business is to be managed; a member (owner) or Manager can be designated to manage the business and

Members typically contribute money or services to the LLC and receive an interest in profits and losses

Note: The mechanics and operation of corporations are governed by individual state corporate laws.

Joint stock company (JSC)

The JSC is a separate and distinct legal entity. Generally, it is managed by the GSM that makes decisions on the most important affairs of the JSC. The BOM is responsible for implementation of the GSM's decisions, making decisions on certain less important affairs of the JSC and overseeing the general affairs of the JSC. Members of the BOM are appointed by the GSM which consists of all shareholders with voting rights. The general director (or CEO), who runs the day-to-day operations of the JSC, is appointed by the BOM. When a JSC has 11 or more shareholders, a board of supervisors (BOS) appointed by the GSM assists the GSM to supervise all operational affairs of the JSC.

Limited liability company with two or more members (LLC2)

LLC2 is a separate and distinct legal entity. Generally, it is managed by the MC that makes decisions on the most important affairs of the LLC2 and oversees general affairs of the LLC2. The MC consists of all company members (or their authorized representatives) that collectively contribute their capital to the charter capital of the LLC2. The general director (or CEO), who is appointed by the MC, is responsible for running day-to-day operations of the LLC2.

Limited liability company with one member (LLC1)

The LLC1 is a separate and distinct legal entity. Company’s president or member's council , which consists of individual(s) appointed by the sole member of the LLC1, makes decisions on the most important affairs and oversees the general affairs of the LLC1. General director (or CEO), who is appointed by the company’s president or the member’s council, is responsible for running day-to-day operations of the LLC1.