What choose the form of business?

Kristofer Hivju
The idea for a business - inspiration

The choice of doing business is one of the most important decisions taken during opening their own business. From the fact it will determine later how and influence decisions in the company, responsibility for its conduct, the method of settlement of tax and profit sharing.

Each company has its own advantages and disadvantages, so choosing the most advantageous form of business, you should consider all the legal aspects, affecting its functioning. The total distribution company differentiates itself on the partnerships (civil partnerships, partnerships and limited partnerships) and capital companies (joint stock and limited liability).


Civil partnership is a simple form of organization of business, operating under the provisions of the Civil Code. There is no legal personality. This means that the income tax is calculated based on the law on personal income tax (PIT). They can wear it both individuals and existing businesses.

The advantage of this type of activity is that each partner can bring with them their own capital, his own work for the company and its unique skills. The disadvantage that you have to reckon with the co-responsible for the criminal actions of an accomplice. The creditor has the right to choose whether to meet their commitments to reach the company's assets or the assets of an individual partner. It can also reach at the same time and to the company's assets to individual estates entrepreneurs.

The most important legal aspects affecting the functioning of the partnership, should also be the fact that:

Each partner is entitled and obliged to manage the affairs of the company may also, without prior resolution of the shareholders perform the operation sudden, whose failure could expose the company to irreparable losses.

for a civil partnership are all forms of taxation VAT this means that its accounts can be carried out in the simplest form, so that it is not so expensive, civil partnership, based on the agreement signed between the shareholders, registered in the office of the municipality or city is therefore not a notary, but registration must make each partner individually, in accordance. 4 of the Code of Commercial Companies, a civil partnership to be converted into a public company, the net income in each of the last two financial years amounted to 1,200,000 euros.

General partnership

A partnership in many ways resembles a civil partnership. She also does not have a legal form is created, usually by a small number of partners, darzacych mutual trust and providing their own capital. On the other hand, what distinguishes it is the fact that it is governed by the provisions of the Commercial Companies Code and the Civil Code is not, as is the case in a civil partnership. It also requires the disclosure in the company name even one of the names of the co-owner of the company. In addition, the agreement of a general partnership must be in writing under pain of its invalidity. Then it is necessary to its registration in the National Court Register. The right to represent the company to all its partners. However, there is a choice of persons authorized to represent, through appropriate provisions in the agreement of a general partnership. In other words, shareholders have the right to choose among themselves one or more people who will be able to represent their company. While depriving one of the partners the right to represent (when previously he had the right to represent the company) may be made only pursuant to a final court decision.

Its competitiveness in relation to the civil partnership lies in the fact that in a partnership limited liability Asset shareholders. The creditor has the right to reach for one of the co-owners of the property only when it will be impossible execution of the company's assets.

A partnership

It is a specific form of economic activity serving only to the professions. Replace it can only natural persons do not have a business, eg. Doctors, lawyers, architects. As in the case of a general partnership regulated by the Commercial Companies Code. However, unlike previous company, its co-owners personally liable and jointly and severally liable with all its assets only for the company's obligations unrelated to the profession. Dana is also the possibility of appointing the board, although this privilege applied only to companies.

Limited partnership

This is a beneficial form of cooperation between units of different capital, allows shareholders a convenient form for the liabilities of the company and for the conduct of its affairs. It applies the same registration process, which in the case of all commercial companies. Its major advantage is the limited liability of shareholders for the financial obligations of the company. They are liable only up to the amount specified in the agreement concluded between them. While its biggest drawback is the need for costly, full accounting.

Limited liability company

Sp. o.o. It is a popular corporation, you can create one or more entities. Just as in the case of the previously mentioned forms of economic regulated by the same Code of Commercial Companies. At the end, however, its similarity to the above-mentioned companies. First of all, the financial liabilities of the company does not meet its co-owners, and the creditor has the right to make the execution only of the company's assets and it is only up to the amount of the share capital specified in the contract. Also differs agreement between the partners, which must be drawn up in the form of a notarial deed. This in turn means much higher costs of its creation. In addition, in order to submit it to the National Court Register, you need a capital of not less than 5 000 dollars. The most important fact remains, however, that Sp. o.o. He is a legal person, and it consequently involves the conduct of a costly, full accounting.

Also, the issue of representation of the company is significantly different from the structure of partnerships. The limited liability company is the board appointed and dismissed by its chairman, to whom is entrusted the function of running a company.

Joint-stock company

The joint stock company is the most complex form of commercial company. In structural terms reminiscent of a limited liability company. However, it requires the involvement of a much more capital, as it should be at least 100 000 dollars. As in the case of a limited liability company, joint-stock company status must be drawn up in the form of a notarial deed, on pain of nullity. It is a legal person and requires conducting a full accounting. The right to represent and rights of the company has only its board, whose members are appointed by the supervisory board. The biggest difference between a public company and other commercial companies is a way of raising capital. The joint stock company, the only one in all forms of business, you may obtain it on the stock exchange and through bonds.

The main advantages of a joint stock company undoubtedly include the fact that The co do not correspond to their own assets for its obligations. However, due to the considerable complexity of legal and tax and the need to continue to benefit from the services of solicitors, lawyers and specialized accounting, the organizational form of the company is mainly designed for large companies and large corporations.

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