An entrepreneur can conduct business activities without establishing a legal entity. The main advantage of a sole proprietorship is the simplicity of creation and management. There are no restrictions on registered capital or the number of partners. Sole proprietors pay personal income tax (IR) and, in some cases, corporate tax (IS).

To open an EURL company, only one person is required, and the minimum registered capital is 1 EUR. The assets of the company and the owner of this company are protected and divided into shares. For example, if the share capital is 1,000 EUR, creditors can only demand payment of this amount, meaning that the owner’s personal property will not be seized. Unlike businesses where turnover is taken into account, in EURL, only profits are taxed. You can choose one of the taxation options: IR (individual income tax system) or IS (corporate taxation system), but once you choose the corporate taxation system, you cannot change the tax system again. The advantage of this type is that such a company can be easily transformed into an LLC if there is a desire to attract more business partners.

The main advantage is the small size of the minimum registered capital: to establish an SARL, it is sufficient to contribute a symbolic amount of 1 EUR. There can be a minimum of two (2) partners and a maximum of one hundred (100). Another advantage of an SARL is a reliable and understandable system of legal regulation that guarantees stability in company management. For example, the law provides for the use of majority rule in voting at general meetings. The disadvantages of an SARL lie in more complex procedures for opening the company and creating its structural subdivisions compared to sole proprietorships. SARL is taxed under the corporate taxation system (IS) at an average rate of 25% on annual profits. Taxation for SARL is flexible, so for firms operating for less than 5 years, there is an option to switch to income tax. For those aiming for a reduced tax rate, the law sets the following main requirements: an annual turnover of less than 10 million EUR, no more than 50 employees, and at least 50% ownership of the SARL’s capital by individuals, with shares not listed on the stock exchange.

An SA is suitable for large-scale projects as it allows engagement in industry and entering the securities market. The number of partners in such a company must be at least two (2), and if the shares are listed on the stock exchange, then no less than seven (7). The minimum registered capital is 37,000 EUR. The profits of an SA are taxed under the corporate taxation system (IS), but there is an option to switch to the personal income tax system (IR) if the enterprise was created less than 5 years ago, at least 50% of its shares are owned by individuals, and managers own at least 34% of the shares. Additionally, the company should have no more than 50 employees, and the capital or annual turnover is limited to 10 million EUR.

The minimum number of partners is one (1), and there is no maximum limit set by law. The size of the registered capital is regulated by the shareholders. A significant advantage is that the president can be an individual or a legal entity, such as another company or association. Regarding taxation, SAS is taxed under the corporate taxation system (IS). The company pays tax based on net profit. SAS can also choose the personal income tax system (IR), but only within the first 5 years after opening. In this case, the partners declare in the tax return the profit corresponding to their shares in the company. As for disadvantages, they may include the complex procedure for developing the articles of association of the joint-stock company. The document must clearly specify the rules for appointing management and supervisory bodies, define their areas of responsibility, and establish decision-making methods at general meetings.

The advantages of this status lie in its simplicity and flexibility, thanks to the option to choose the tax system. SASU has a management requirement — it is necessary to appoint a President of the company, who can be either an individual or a legal entity. There is no minimum requirement for registered capital. SASU is subject to corporate tax (IS), but within 5 years from the creation of the joint-stock company, it is also possible to opt for the personal income tax system (IR). The main disadvantage is the need to pay close attention to the drafting of the founding documents, where it is important to anticipate various scenarios. Otherwise, conflicts between partners may arise if SASU is later converted into SAS.

In an SNC, partners bear joint and several liability. Subscription for shares in this type of company is limited to a strictly defined group of individuals and according to collective decision. The amount of registered capital is determined by the partners, who must be at least two. In an SNC, all participants are default managers, but in a separate act, one or more individuals may be appointed to carry out the company’s day-to-day activities. It is important to choose a reliable and competent person who will assume the obligations of the enterprise towards third parties. The company itself, as a legal entity, does not pay taxes. Each partner pays income tax on their share of profits. If desired, the company can also opt for corporate tax (IS). The main drawback of an SNC is the joint and unlimited liability of all members of the partnership for its debts. Thus, if the company has debts to creditors, they can file a claim against any partner for all of the company’s debts, even if that partner is not responsible for the actions taken by the company.

An SCA must have at least four shareholders (one general partner and three limited partners). The required registered capital is €37,000 or €225,000 if the partnership deals in securities trading. The company’s management must be provided by a supervisory board appointed by the shareholders at a general meeting. The company’s profits are subject to corporate tax (IS). The drawbacks of an SCA include that general partners assume all risks of commercial activities without limitations. Additionally, it is a cumbersome and multi-level organizational and legal form.