Start a Business
Be entrepreneur There’s a lot to it. It means being in two places at once, doing six things simultaneously, and still finding time for activities outside the organization. If you already have an idea, get organized and start by figuring out the right structure to bring that vision to life.
Depending on each entrepreneur’s business goals, there is a business model that is best suited to their needs. Say U Consulting helps you understand the advantages and disadvantages of each:
Sole proprietor, ENI
A single individual as the account holder.
The fact that you have complete control over the business, do not need a minimum amount of capital, and still have low tax costs means that your personal assets are tied up in the business and that any potential debts could affect your household.
However, even though it is more difficult to obtain financing, there are always the advantages of having exclusive use of the company’s assets and the fact that dissolving the company is as simple a process as incorporating it.
Individual Limited Liability Business (EIRL)
Just as in the previous model, the ENI, there is also only one individual as the owner. The difference lies in how assets are registered: only the self-employed individual’s assets are tied to the business. This is the primary advantage, as only the business owner’s personal assets will be considered in the event of any debts. In other words, the household’s assets are not at risk.
The initial capital must be greater than or equal to 5,000 euros, with one-third to be paid in cash. There may be cases involving joint assets.
Single-Member Limited Liability Company
Composed of a single member whose liability is limited to the amount of the subscribed share.
The main advantage is having complete control over the business and the fact that the minimum investment required to incorporate a company is one euro. Another favorable factor is that the entrepreneur’s liability is limited to the company’s share capital. On the other hand, the process of setting up the company is highly complex, and given its nature, it is difficult to obtain certain tax benefits or financing. It is mandatory to hire a Certified Public Accountant.
Limited Liability Company
A company with two or more partners whose capital is divided among them in the form of shares.
At times, shared control of the company can complicate the decision-making process. However, individual liability is limited to the value of the subscribed share, which can be a significant advantage, and it is relatively easy to obtain loans and financing. There is also a distinction between the company’s assets and personal assets.
Corporation
As a rule, it consists of at least 5 shareholders, and its capital is divided into shares. It is called a “public limited company” because its shares can be freely traded.
In addition to the ease of transferring company shares, a shareholder’s liability is proportional to the value of the shares subscribed, and there are favorable conditions regarding credit and investments. On the other hand, the amount of share capital is high (it cannot be less than €50,000), and if the company is listed on the stock market, regulatory oversight is extremely strict.
General Partnership
A company with more than one partner who has limited liability with respect to the company and joint and several liability with respect to the other partners.
The three main advantages are: the admission of industry partners, no minimum capital requirement, and joint and several liability among business owners toward creditors. As for the disadvantages, there is a merger of personal and corporate assets, which means that in the event of debt, personal assets will be liable, and the remaining partners will bear subsidiary liability.
Limited Partnership
A type of limited partnership in which there are two types of partners: those who contribute services or goods (general partners) and those who contribute capital and manage the partnership (limited partners).
The minimum required capital is €50,000; there is joint and several liability among partners, and their roles are clearly defined.
Cooperative
A non-profit collective capital association in which revenues are distributed among the members based on their respective investments. In this regard, limited or unlimited liability depends on the member’s status, and it is possible to attain different statuses within the cooperative (division of control). The minimum capital is €2,500, and the cooperative may be established by public deed or private instrument.
We all know that, regardless of the business model, communication is essential. The Say U Consulting is ready to take on the challenge. Ready to chart your company's course?