Setting up a new business is an exciting time, yet it’s worth to note the fears and troubles that bring with it too. The professionals at GCS Malta are here to offer advice based on extensive experience when it comes to setting up your new venture.
Firstly, deciding on the legal format you want to operate under is a crucial decision that needs to be made at the early stages. By deciding on the type of legal structure you choose, depends on what kind of industry you will be operating in.
When deciding which structure best suits your business goals, you will need to consider:
Cost of running the company
Limitation of liability
Tax benefits
Number and nature of stakeholders
Registration options
There are various possible registration options one can apply for.
Self-employed
Partnership
Limited Liability Company (Ltd.)
Cooperative
Self-employed.
Companies registered under this category enjoy benefits such as, easy to set up and profit made is your income. On the other hand, one should note the following two considerations. You are personally liable for any debt, and it is harder to raise finance and may need to provide a personal guarantee. Opening a business under self-employed in Malta requires specific documents according to your nationality.
Partnership.
Two or more individuals who wish to set up and run a business together will need to register the company as a partnership. The partners will share profits, losses and unlimited liability. A ‘Deed of Partnership’ in front of a notary needs to be signed by all parties. It is here that all parties are in agreement and understand their responsibilities and how profits/liabilities are to be split. There are three types of commercial partnerships.
The partnership En Nom Collectif
The partnership En Commandite
The Limited Liability Company
Partnership en Nom Collectif.
The business operates under a partnership name and has its obligations guaranteed by the unlimited and joint and several liability of all the partners. The partners will be exposed to a joint and several liability if the partnership does not have enough assets.
Partnership En Commandite.
One partner considered to be a ‘general partner’ with unlimited liability, is required for such a partnership. In the case of more than one general partner, general partners must have a joint and several liability. It is necessary to also have at least one ‘limited partner’ with limited who agrees to contribute the capital of a specific sum to the partnership. A separate legal personality which is separate and distinct from partners and has its legal nature is also required.
Furthermore, this partnership requires a capital which may or may not, be divided into shares. The partnership cannot be liable to a debt which is beyond the amount contributed.
Limited company.
A limited liability company can have the status of a public or private company. Your company can enjoy some of the following benefits:
A limited company is a legal entity, which is separate from its owners and reduces personal liability.
Dividends will be paid as income to shareholders. Shares can be sold to raise capital.
Management will not be affected if there are changes in shareholders or ownership.
With limited companies, an accountant will have to aid in your accounting and taxation needs, since they will be more complicated. Registering a limited company in Malta is a longer process than registering a self-employed company. Specific documents and fees need to be submitted to be valid.
Cooperative.
A cooperative business is owned and operated for the benefits of its members. A cooperative company can be for-profit or non-profit organisations. A cooperative business operates in the same manner as a corporation, with the difference that each member gets one vote.
Why GCS Malta?
GCS Malta has a team of highly dedicated individuals that are experienced in their respective fields. We can help you choose and set up your business structure and organise all relevant documentation that is needed. Contact us for further information.
