Before incorporating a company, or even choosing a jurisdiction, you need to plan a corporate structure for your business and, based on this, decide the purpose of the company you wish to incorporate. Understanding the business structure of your company is essential, as it will determine the jurisdiction and type of company you choose in order to best meet your needs.
As different legal entities are usually subject to different taxation rules, it is essential to have a clear vision for your company, including its scope of activity and corporate structure. For tax planning purposes, it is crucial to choose the right legal structure for your business; otherwise, you risk incurring extra expenses that could easily have been avoided. Also, some company types are bound by certain restrictions in terms of incorporating new business partners or third-party investors, which may be a problem if you plan to work with invested capital. One of the most important aspects is the liability of the owners: different legal entities have different levels and mechanisms of liability for the business owner with respect to the company’s relationships with third parties. In order to avoid unnecessary risks, we strongly advise you to think twice before choosing a legal structure.