04.01: Appendix: Finding help on the legal and tax requirements for a business/company

Be sure to find out about the laws and regulations that:

  • cover the process of registration or incorporation for a new business/company, e.g., registration of business trade name, requirements for a business license or permit, establishment a board of directors, registration with tax authorities, etc.  
  • cover the responsibility of the business owner(s) or company throughout operations, e.g., income taxes, social security or similar local taxes, allowable tax deductions, liability and business insurance, employer responsibilities, etc.

Regulations may vary depending on the type of business/company and the size of the business/company – which could be determined by number of employees, net worth, annual turnover, or a combination of these. 

Each country or jurisdiction will specify the forms that a business can take, and a body of commercial law will have been developed for each type. 

Some common types include: 

  • Sole trader/proprietor – One person goes into business, and the liability of the business rests with his/her personal assets. Thus, the business legally has no separate existence from its owner. Legal requirements for forming the business are relatively few, apart from perhaps a registration with tax authorities.
  • Partnership – A type of business entity in which partners share with each other the profits or losses of the business undertaking in which they have all invested. This is like a sole proprietorship except that two or more individuals share the ownership and liability. Legal requirements are relatively few. The partners will have a verbal or written partnership agreement.
  • Company or corporation – A legal entity that has a separate legal identity from its members, and is ordinarily incorporated to undertake commercial business. 
  • Limited liability company – The country's laws may allow for a few different kinds of limited companies, depending on whether the shares are owned privately or publicly (bought on the stock exchange), and whether the members' liability is limited, e.g., by the value of shares or by a set guaranteed amount. The particular terms for these kinds of business entities will vary with language and the particular laws of each country.

Find further help at business advice centers or from the country of operation's tax department. 

Other resources:

www.doingbusiness.org – World Bank site, provides searchable database of business regulations for each country in the world. 

www.wikipedia.org – Provides definitions and abbreviations for types of companies in many countries. See entry on ‘types of companies’ and other useful entries on: business, legal entity, companies, commercial law, corporations.  

www.bplans.com – See legal advice section.

Also try an internet search engine for topics such as ‘small business advice’ or ‘sole proprietorship’ or ‘company type’ to find general and localized information.