What Are the Liabilities of Entrepreneurs Who Want to Start an Equity Company?
There may be different legal liabilities based on the types of organization to be started. There may be different liabilities based on types of organization to started. Therefore, entrepreneurs must properly determine the type of organization and they must scrutinize pros and cons of each type while they go into entrepreneurship. Organizations may be divided into two as private company and equity company in terms of rights and liabilities of partners.
Equity companies are established as capital organizations. The share of capital investment of partners is important rather than their entities. Documents representing these shares may change hands without any alterations at structure or external affairs of organization. Equity companies are divided into three as joint stock companies, limited companies and commandite companies in which capital is divided into shares.
In equity companies, liabilities of partners to third parties due to partnership debts are limited to the extent to their capital investments.
Advantages of Equity Companies:
> Organizations are obliged to pay tax and the rate of tax is 20%.
> Personal creditors of partners cannot demand denouncement of the company.
> The bankruptcy of one of the partners does not terminate the company.
> Even though only one partner remains, the company is not terminated.
Disadvantages of Equity Company:
> Establishment phase is more difficult.
> Personal labor and commercial credit cannot be counted as capital investment.
> Equity companies identified by Council of Ministers are obliged to independent audit.
> Equity companies that are obliged to independent audit are liable at setting up a website.
> Equity companies are not allowed to change into private company, they only are allowed to change into another equity company or cooperative.
> Equity companies are obliged to form a general board and to hold periodic meetings.
You are allowed to carry out required transactions to start the company, or you can carry out these transactions through a financial consultant. An experienced financial consultant help you to save time as well as she/he prevents potential problems and mistakes.
What needs to be done are as follows:
> Drawing up and notarizing a corporation charter;
> Enrollment in relevant chamber of commerce or chamber of artisans;
> Application for water, electricity and energy usage;
> Obtaining work permit or work license;
> Obtaining tax identification number;
> Notification of employees to social security institution.