CONSULTING ON 3 POPULAR BUSINESS TYPES
Do you want to start your own business and don't know which type is right for you? What are the advantages and disadvantages of the current popular type?
Thinh Tri Law - Consulting for all types of businesses
03 types of businesses are popular today, including: private enterprises; Joint Stock Company and Limited Company. Here, let's learn about the advantages and disadvantages of each type of business with Thinh Tri Law in the article below.
KEY CONTENT SUMMARY
1.Features of the type of private enterprise.
2. Features of the type of joint stock company.
3. Features of limited liability companies.
a) Features of the type of one-member limited liability company.
b) Features of the type of limited liability company with 2 or more members.
1.Characteristics of the type of sole proprietorship
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A private enterprise owned by an individual who is liable with all his civil assets. In addition, each individual may only establish one private enterprise. The owner of a private enterprise must not be the owner of the business household or a member of a partnership. The characteristic of a sole proprietorship is that it has no legal status. Private enterprises are not allowed to issue securities; are not entitled to contribute capital to establish an enterprise or purchase shares or contributed capital in a partnership, limited liability company or joint-stock company.
- Chủ sở hữu doanh nghiệp tư nhân có toàn quyền quyết định tất cả hoạt động kinh doanh, sản xuất của doanh nghiệp, toàn quyền quyết định việc sử dụng lợi nhuận sau khi nộp thuế và thực hiện các nghĩa vụ tài chính khác theo quy định của pháp luật. Vốn đầu tư của doanh nghiệp tư nhân do chủ doanh nghiệp tự đăng ký. The owner of a private enterprise has the full right to decide on all business and production activities of the enterprise, the full right to decide the use of profits after tax payment and to fulfill other financial obligations as prescribed. under the law. Investment capital of a private enterprise is registered by the business owner. All capital and assets used in business activities of the enterprise are fully recorded in the accounting books and financial statements of the enterprise. In the course of business operations, the owner of a private enterprise has the right to increase or decrease his investment capital. In case the decrease in investment capital is lower than the registered investment capital, the owner of the private enterprise must declare to business registration agency. The owner has unlimited liability for all debts and property obligations of the enterprise, with all his civil assets in the business and outside the business of that enterprise.
- Pros
- The owner has full authority to decide on all business activities of the enterprise without having to go through any members.
- The enterprise organizational structure is simple and easy to manage.
- Cons:
- The owner must be solely responsible for the business and production of the enterprise with all his civil property.
- Private enterprises are not allowed to issue securities.
- Each individual is only allowed to set up one private enterprise.
- The owner of a private enterprise may not concurrently be the owner of a business household or a general partner of a partnership.
- A sole proprietorship has no legal status.
- Private enterprises are also not allowed to contribute capital or buy shares in other forms such as partnership, limited liability company, joint stock company.
- If customers have questions about the business establishment process, Please dont hesitate to contact us via Hotline: 1800 63 65
2. Characteristics of the type of joint stock company
- A joint stock company is a type in which the charter capital is divided into equal parts called shares. From the date of issuance of the business registration certificate, the joint stock company will have legal status.
- Shareholders in a joint stock company can be organizations or individuals. The minimum number of shareholders is 03, there is no limit to the maximum number. A joint-stock company that wants to be established must have at least 03 founding shareholders. Joint-stock companies converted from state-owned enterprises or from limited liability companies, divided, split, consolidated or merged from other joint-stock companies do not necessarily have founding shareholders.
- Within 3 years from the date of being granted the Certificate of Business Registration, founding shareholders are entitled to freely transfer their shares to other founding shareholders, and at the same time may only transfer ordinary shares to other founding shareholders. who is not a founding shareholder, provided that it is approved by the General Meeting of Shareholders. The restriction on common shares of founding shareholders is removed after 03 years from the date the enterprise is granted the Certificate. The limitation of the above regulation does not apply to shares that founding shareholders have more after registering the establishment of enterprises or shares that founding shareholders transfer to persons who are not founding shareholders of the company. .
- Shareholders in a joint-stock company are only liable for debts and other property obligations to the extent of the amount of capital contributed to the Company. Charter capital of a joint-stock company at the time of enterprise registration is the total par value of shares of all kinds which have been registered for purchase and recorded in the company's charter. Shareholders must pay in full for the number of shares registered for purchase within 90 days from the date of issuance of the Certificate of Business Registration, unless otherwise provided for in the company's charter or contract for registration of share purchase in another shorter period.
- Joint-stock companies have the right to issue securities in accordance with law. Shares are certificates issued by a joint-stock company, journal entries or electronic data certifying the ownership of one or more shares of that company.
- Pros:
- A Joint Stock Company has legal status from the time it is granted the Enterprise Certificate.
- A joint-stock company has the right to issue bonds, shares and other securities.
- Shareholders of a joint-stock company are only liable for debts and other property obligations to the extent of their capital contribution to the enterprise.
- The capital structure is flexible, enabling many people to contribute capital and the issue of transferring capital of shareholders is relatively easy.
- Cons:
- In the process of operating a joint stock company, there will be difficulties because of the large number of shareholders and potential conflicts of interest.
- The establishment and management of a joint-stock company is somewhat more complicated than other types of businesses because it is bound by the provisions of the law, especially the accounting and financial regimes.
- If you have questions about the business establishment process, please dont hesitate to contact us via Hotline: 1800 63 65
Features of the type of limited liability
- One-member limited liability is a type owned by an organization or individual. Unlike a sole proprietorship, the Owner is only liable for the company's debts and other property obligations to the extent of the company's charter capital.
- A one-member limited liability company has legal status after being granted a business registration certificate.
- Pros:
- Single member limited liability company with legal status.
- The owner of a one-member limited liability company has the full right to decide on all business and production activities of his enterprise.
- The financial obligations and debts belong to the company, the business owner is only liable to the extent that the charter capital has been contributed to the company.
- Bonds are allowed to issue.
- Cons:
- One-member limited liability companies may not issue shares, unless the enterprise wishes to convert into a joint-stock company.
- Restricted in raising capital contribution.
- Features of the type of limited liability company with 2 or more members A limited liability company with 2 or more members is a type with a minimum of 02 members and a maximum of 50 members. Members can be organizations or individuals. All members are responsible for the debts and property obligations of the enterprise to the extent of their contributed capital, unless otherwise provided for by law.
- Pros:
- Limited liability companies with 2 or more members have legal status from the time of issuance of the certificate of company establishment.
- Members are only liable for debts and property obligations within the scope of their contributed capital.
- Limited liability companies with 2 or more members are entitled to issue bonds.
- Cons:
- Not entitled to issue shares, unless the enterprise wants to convert to the form of Joint Stock Company.
- All decisions of the enterprise must be approved by all members.
→ See more:
→ Consulting on 3 popular types of businesses today.
→ Should I set up a private enterprise
→ Should I set up a joint stock company or a 2 member limited company?
→ Some notes when converting the type of business.
- Through this article, we hope to have provided useful information to our customers. If customers have questions about the business establishment process, please contact us:
THINH TRI LAW COMPANY LIMITED
Hotline: 1800 63 65
