Choosing the form of ownership for a business.

Every entrepreneur who wants to start his own business thinks about how to choose the right form of ownership for his business. On the choice of the form of ownership affects what tasks will perform the business, what is the planned turnover of funds, etc.

The most common forms of ownership in Ukraine are the IP, PE, LLC and JSC. In this article, we will try to answer the questions, how to determine which form is suitable for your business project, and what advantages and disadvantages it has.

Sole proprietorship (sole proprietorship) Individual Entrepreneur

To register as an IP requires a minimum package of documents, and the registration process itself does not take much time. It can even be done online. One person registers an IP and the name is his last name. No charter capital or bank account is needed for registration. IP cannot transfer its business to other people. It is also necessary to close the IP independently. A legal address is not required when opening an IP. The main disadvantage of IP is the increased financial responsibility. IP is responsible for its business obligations with all of its property.

PE Private enterprise

PE can be registered if you have partners and co-founders. Business partners and co-founders of the sole proprietorship are not liable with their property for their business obligations.

The amount of the authorized capital and the term of its contribution are not regulated by law. PE is a legal entity.

Limited Liability Company

To register an LLC you need a charter capital and a charter. If there are several partners-owners, in the charter it is necessary to spell out the shares of the co-founders. Subsequently, the co-founders can sell or donate these shares to other people. Director is elected at the meeting of founders. Availability of legal address for LLC is mandatory.

JSC A joint-stock company

The difference between a JSC and an LLC is that the authorized capital of a JSC is divided into shares of equal nominal value. There are public and private JSCs. The difference is whether the shares are listed on the stock exchange or a limited number of shareholders have access to them.

Evaluate the pros and cons of each form of ownership in Ukraine, think about which one best suits your type of business and make the right choice. Registering a business in other jurisdictions is advisable if you intend to operate primarily in foreign markets, and also if you want to attract partners or investments from abroad. We will tell you more about this in the next article.