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Enterprises do not only differ in activity and size, but also in legal forms. When starting an enterprise you have to consider these different juridical structures, as they are important in determining the organisational structure of the company and the responsibilities of each employee. Who will decide how staff will be employed or who can decide about changing salaries and tasks, the liability responsibilities of the persons working in the company. Your legal accommodation form is crucial if you have to sell your private house or not when you go bankrupt. Is your private capital secluded from the claims of your creditors? The type and percentage of taxes you have to pay depends on if the company profits are assessed, or each partner pays separately taxes over his own share in the profits. The way you may organise the social insurance for your employees (are they compulsory included in a social security scheme or do you have to insure yourself?), the way the bookkeeping has to be organised, etc. It all depends on the legal form of your company and the law and rules of your country.
Especially when more people are involved, the share of all in the company and their contribution to the starting capital must be stated clearly and officially. All the buildings, machinery and outfit (from computer to curtains) have to be valued and salaries have to be standardised (taking into account the relevant experience and knowledge of each partner). Also it must be clear how profits will be shared although, most of the time this will be in accordance of the contribution of each partner to the starting capital and his degree of active participation in the company. To avoid running into problems with the different authorities, especially the tax officials (which could turn nasty), you have to structure your company according to one of the possibilities. The right choice will depend on your personal situation, how many employees you start with, the financial risk you are prepared to take and the turnover you expect.
Starting an enterprise begins with giving it a name. In some countries, an one-man enterprise has to contain the surname of its owner. In the rest, you are free to choose the name you like. Nevertheless, the best name is one that is easy to remember, is easily linked to the ‘core business’ of the enterprise, and will not cause confusion with the name of another company with the same or similar name (the Chamber of Commerce will assist.)
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2.3. Legal Form, Required Permissions and Procedures | 2.3.2. Required Permissions and Procedures |
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