Approximately 5 minutes
01
There is no single right entity
Risk, ownership, financing, investment plans, decision-making and expected growth should be considered together. Choosing only by formation cost may create a later need for restructuring.
02
The basic distinction
A sole proprietorship is operated by an individual and does not have a separate legal personality. Limited liability companies (LLCs) and joint-stock companies (JSCs) are separate legal entities. Exceptions apply to liability, management and public debts, so incorporation does not eliminate every personal risk.
- Sole proprietorship: a simpler structure with a direct link between the individual and the business
- Limited liability company (LLC): a capital company managed by one or more managers
- Joint-stock company (JSC): a share and governance structure that may better suit investment and complex growth
03
Questions before choosing
Will there be new partners or investors? Are share transfers expected? What are the commercial risks and programme eligibility conditions? The tax and accounting implications should be assessed with the relevant professionals.
This article is for general information. Programme rules and legislation may change; current documents and individual circumstances should be reviewed before action.
