Defining the corporate structure
4. Defining the corporate structure
Determining the structure of a company essentially depends on the number of partners chosen and the entry social capital, to maximise the benefits involved and minimise the existing weaknesses.
Limited Single-Member Company
What is it?
Constituting a company with a single partner, which may be a natural or legal person.
Strengths
1. Liability for social capital
2. Control over the activity of the company
3. Easy to wind-up
Weaknesses
1. Impossible to obtain tax benefits, resulting from the aggregation of the company’s income in the tax base due to the company’s structure being on their own behalf
2. Difficulty in raising new capital or funding, due to the restructuring of the company
Minimum social capital
€1
Registration
Applicable to all | Cost: €~700 | Duration: ~2 weeks | Process: See here
Administration and monitoring
1 or more manager(s)
Supervisory board is not compulsory However, it is necessary to proceed to the designation of a Certified Public Accountant from certain limits of activity to proceed to the statutory audit.
Rights of minority stakeholders
Not applicable.
Shareholder liability
The liability of the single member is limited to the paying-up of the social capital.
Social participations authorised in the constitution
The paying-up of 50% of the contributions in cash may be differed for a period of up to 5 years. Contributions in cash may be deposited in a bank account opened under the name of the company up to the end of the first fiscal year.
Constituting a company with a single partner, which may be a natural or legal person.
Strengths
1. Liability for social capital
2. Control over the activity of the company
3. Easy to wind-up
Weaknesses
1. Impossible to obtain tax benefits, resulting from the aggregation of the company’s income in the tax base due to the company’s structure being on their own behalf
2. Difficulty in raising new capital or funding, due to the restructuring of the company
Minimum social capital
€1
Registration
Applicable to all | Cost: €~700 | Duration: ~2 weeks | Process: See here
Administration and monitoring
1 or more manager(s)
Supervisory board is not compulsory However, it is necessary to proceed to the designation of a Certified Public Accountant from certain limits of activity to proceed to the statutory audit.
Rights of minority stakeholders
Not applicable.
Shareholder liability
The liability of the single member is limited to the paying-up of the social capital.
Social participations authorised in the constitution
The paying-up of 50% of the contributions in cash may be differed for a period of up to 5 years. Contributions in cash may be deposited in a bank account opened under the name of the company up to the end of the first fiscal year.
Private Limited Company
What is it?
Constituting a company with more than one partner, where the capital is divided among participations
Strengths
1. Liability for the company's total social capital
2. Higher probability of obtaining necessary funds due to the diversification of the capital of the company
Weaknesses
1. A partner may be called to respond before the creditors for the whole of the capital
2. Limited control of the company’s governance
3.Difficulty in constituting and winding-up the company due to formal imperatives (need for an agreement between the partners)
Minimum social capital
€2
Registration
Applicable to all | Cost: €~700 | Duration: ~2 weeks | Process: See here
Administration and monitoring
1 or more manager(s)
Supervisory board is not compulsory However, it is necessary to proceed to the designation of a Certified Public Accountant from certain limits of activity to proceed to the statutory audit.
Rights of minority stakeholders
The legal requirement is for 3/4 of the capital votes to be approved regarding certain topics, namely the Articles of Association.
Shareholder liability
The liability of the single member is limited to paying up the capital, but the partners are jointly responsible for the subscription of the total of the social capital.
Social participations authorised in the constitution
The paying-up of contributions in cash may be differed for a maximum period of 5 years. Contributions in cash may be deposited in a bank account opened under the name of the company up to the end of the first fiscal year.
Constituting a company with more than one partner, where the capital is divided among participations
Strengths
1. Liability for the company's total social capital
2. Higher probability of obtaining necessary funds due to the diversification of the capital of the company
Weaknesses
1. A partner may be called to respond before the creditors for the whole of the capital
2. Limited control of the company’s governance
3.Difficulty in constituting and winding-up the company due to formal imperatives (need for an agreement between the partners)
Minimum social capital
€2
Registration
Applicable to all | Cost: €~700 | Duration: ~2 weeks | Process: See here
Administration and monitoring
1 or more manager(s)
Supervisory board is not compulsory However, it is necessary to proceed to the designation of a Certified Public Accountant from certain limits of activity to proceed to the statutory audit.
Rights of minority stakeholders
The legal requirement is for 3/4 of the capital votes to be approved regarding certain topics, namely the Articles of Association.
Shareholder liability
The liability of the single member is limited to paying up the capital, but the partners are jointly responsible for the subscription of the total of the social capital.
Social participations authorised in the constitution
The paying-up of contributions in cash may be differed for a maximum period of 5 years. Contributions in cash may be deposited in a bank account opened under the name of the company up to the end of the first fiscal year.
Public Limited Company
What is it?
Constituting a company where the social capital is divided among shares that may be freely transacted
Strengths
1. Easy to transfer shares
2. Easy to obtain new and further capital (issue shares)
3.Liability for total participation
4.Minority protection of partners
Weaknesses
1. More dilution of the control over the company
2. More regulation and external control of the company's governance (especially facing creditors in case it is listed by shareholders)
Minimum social capital
€50,000
Registration
Applicable to all | Cost: €~700 | Duration: ~2 weeks | Process: See here
Administration and monitoring
Possible structures:
(I) Board of Directors (CA)*+ Tax Board; (ii) CA (with Auditing Committee) + Certified Public Accountant (ROC); (iii) Executive CA* + General Board and Supervisory Board + ROC *or Single Administrator in case social capital is inferior to €200,000
Rights of minority stakeholders
The legal requirement is for 2/3 of the capital votes to be approved regarding certain topics, namely the Articles of Association.
Shareholder liability
The liability of the shareholders is limited to the amount of capital subscribed by each.
Social participations authorised in the constitution
The paying-up of 70% of the contributions in cash may be differed for a period of up to 5 years. The paying-up of the issuance award (if applicable) may not be differed.
Constituting a company where the social capital is divided among shares that may be freely transacted
Strengths
1. Easy to transfer shares
2. Easy to obtain new and further capital (issue shares)
3.Liability for total participation
4.Minority protection of partners
Weaknesses
1. More dilution of the control over the company
2. More regulation and external control of the company's governance (especially facing creditors in case it is listed by shareholders)
Minimum social capital
€50,000
Registration
Applicable to all | Cost: €~700 | Duration: ~2 weeks | Process: See here
Administration and monitoring
Possible structures:
(I) Board of Directors (CA)*+ Tax Board; (ii) CA (with Auditing Committee) + Certified Public Accountant (ROC); (iii) Executive CA* + General Board and Supervisory Board + ROC *or Single Administrator in case social capital is inferior to €200,000
Rights of minority stakeholders
The legal requirement is for 2/3 of the capital votes to be approved regarding certain topics, namely the Articles of Association.
Shareholder liability
The liability of the shareholders is limited to the amount of capital subscribed by each.
Social participations authorised in the constitution
The paying-up of 70% of the contributions in cash may be differed for a period of up to 5 years. The paying-up of the issuance award (if applicable) may not be differed.