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2009 26 August

The legal and tax study for starting a business

Whatever the country in which a company opens office or unit of production, there is legislation to comply.

The entrepreneur has the choice of legal status.

The choice of legal status will have an impact on the types of taxes and levies which will be subject the company and the leader of the company.

The legal status and tax status are not the same thing but are related to each other.

There are different legal forms with different names in different countries of the world, but there are strong similarities.

The first question is: Who will own the company? If it is a sole proprietorship, it will be an AR (individual company), or an EURL (sole proprietorships with limited liability).

If we know that now belong to several owners, it will choose to create an SA (Societe Anonyme) or an LLC (Limited Company Limited).

The difference between a single and a company "limited" liability for the debts of the company's heritage of entrepreneur. As its name implies, EURL SARL and separate the assets of the company and the creator of the company. If the company goes bankrupt, the assets of the contractor will not be affected. This is obviously more interesting, but it needs to make a minimum downpayment to the creation of the company.

Other statuses are possible: SAS, SCOP, ... which also have different implications with a different mode of operation, especially in making important decisions, the sale of shares in the company ...

There may have obligations to choose a legal status, according to the activity. Similarly a specific activity may require the fulfillment of certain prior obligations (diplomas for doctors, ...)

It is better to choose the legal status at the start, because changing these statutes is expensive, but if in theory this remains possible.