2.3. Company & Management

When founding a company, the company form must be determined. This is done with the definition of the legal form. It defines the framework conditions for the enterprise. The entrepreneur is free to choose the legal form. The legal form can be changed as the enterprise develops if this becomes necessary.

A basic distinction must be made between the "partnership" and the "corporation". It is typical for partnerships that the owner or owners of the company are personally liable with their assets. corporations that the partners or owners are only liable with the share capital of the company.

The legal form determines the ownership structure. When founding a company, it is advisable to check carefully which form is the right one and which formal requirements must be observed. Liability plays a role here. There are differences in the costs of formation, e.g., articles of association with notary, as well as in accounting obligations, e.g., balance sheet with annual accounts in accordance with tax laws. A decisive factor for the legal form is always the question of the equity and debt capital that a company needs. If investors or banks are involved, the question of participation and control rights arises. The corresponding formal requirements and laws sometimes differ greatly in individual states and must be considered individually.