Currently, with regulations on limitation of liability for owners in business activities of the company with the above types, few people choose the form of Private enterprise. But there are still some wishes to set up a private business and agree to take unlimited responsibility for the operation process and develop personal reputation. On average, only about 20 private businesses are established each week.
Basic legal features of Private enterprise:
- Owned by an individual.
- No legal personality.
- The owner of a sole proprietorship has unlimited liability for all debts incurred during the operation of the sole proprietorship.
Currently, the number Partnerships very little is registered, there are weeks when no company of this type is established. Although the management of a partnership is not too complicated, due to the unlimited liability regime, the risk level of the general partners is very high. They have to contribute both prestige and unlimited responsibility in the company’s activities, so these people need to trust each other very much.
The main features of Partnerships:
- There should be at least 02 members who are common owners of the company, doing business together under a common name. In addition to general partners, the company may have additional capital contributors.
- General partners must be individuals, responsible with all their assets for the obligations of the company.
- Capital contributors are only liable for the company’s debts to the extent of the amount of capital contributed to the company.
- A partnership company has legal status from the date of issuance of the Certificate of Business Registration.
- During the course of business operations, the partnership may not issue any securities.
Joint Stock Company
On average, our country has about 500 . per week Joint Stock Company newly registered. A joint stock company has the following main characteristics:
- The minimum number of members during the operation of the company is 03 and there is no limit to the maximum number. Shareholders can be individuals or organizations.
- The charter capital of the company is divided into equal parts called shares.
- A joint-stock company has legal status from the date of issuance of the Certificate of Business Registration.
- Shareholders are only liable for the debts and other property obligations of the company to the extent of the amount of capital contributed to the enterprise.
- During operation, Joint Stock Company has the right to issue shares of all kinds to raise capital. Therefore, the ability to raise capital is very high and flexible by offering different types of shares and issuing shares to the public.
Especially, this type of company can list and trade shares on the stock exchange if eligible.
Limited liability company with two or more members
Currently, there are many types of limited liability companies to choose from. Special Two member limited company or more have a small number of members, usually people who know and trust each other. Therefore, the management and operation of the company is easier, not too complicated like a joint stock company. On average, every week there are more than 600 Limited liability company with two or more members established.
According to the Enterprise Law 2020, a limited liability company with two or more members has the following characteristics:
- Have legal status.
- There are 02 or more members but not more than 50 members during the operation.
- The Company is only liable for the debts and other property obligations of the company with its own assets. Company members are responsible for debts and other property obligations of the company within the amount of capital committed to contribute to the company.
- The capital contribution of members can only be transferred according to certain legal procedures.
- Limited liability companies with two or more members are not entitled to issue shares.
About the management organization structure Limited liability company with two or more members having a Board of Members, a Chairman of the Members’ Council, a Director or a General Director. A limited liability company with two or more members being a state-owned enterprise and a subsidiary of a state-owned enterprise must establish a Control Board; other cases decided by the company.
One member limited liability company
According to statistics at the National Portal on Business Registration, One member limited liability company chosen to establish the most. On average, more than 1.500 one-member limited liability companies are established each week. This type is chosen a lot because of its rather compact characteristics, specifically as follows:
- Owned by a member who is an organization or an individual.
- The company owner is responsible for the company’s debts and other property obligations to the extent of the company’s charter capital.
- Have legal status.
- Not entitled to issue shares.
One member limited liability company can be owned by an organization or an individual. The management and operation model of this type is usually managed in one of the following forms (according to the Enterprise Law 2020):
- Company President, Director or General Director.
- Members’ Council, Director or General Director (in case the organization is the company owner).