Company business structure
Before incorporating a company, or even choosing a jurisdiction, you need to plan a corporate structure for your business, and, based on this, decide the purpose of the company you wish to incorporate. Understanding the business structure of your company is essential, as it will determine the jurisdiction and the type of company you choose in order to best meet your needs.
A company’s business structure is its primary function within the wider corporate structure of your business. On this basis, we can identify the following company types:
- Trading company
- Online trading company
- Holding company
Confidus Solutions can provide you with detailed legal consultation regarding business and tax planning strategies, as well as advising on a suitable business structure for your company. As each of these company types has its own benefits and disadvantages, we strongly recommend that you contact us before starting the company formation procedure.
A trading company is a business that specialises in buying and selling various products. As the entity that ultimately delivers the goods to the customer, trading companies also set up shops and storage facilities to avoid becoming dependent on a manufacturer's ability to supply products on demand. Moreover, trading companies may handle all the necessary procedures relating to the delivery of goods, including procedures for international trade. When planning to establish a trading company there are several factors to be taken into consideration, such as taxes applied by the jurisdiction of domicile, the jurisdiction of your company’s bank, bookkeeping requirements and possible locations for warehouses and storage facilities (if necessary).
Online trading company
An online trading company primarily operates via the internet and its electronic commerce tools. Much like any regular trading company, an online trading business specialises in buying goods from manufacturers and selling them to the consumer or other retailers. Obviously, a website is an absolute must for any online business. Designed to function as an online store (describing the range of available products, their prices and features), the website must be in compliance with local legislation regarding product descriptions and the information that must be provided.
A holding company is a business that owns the stock of other companies in a way that allows the holding company to control the decisions and policies of these companies. A holding company offers a certain advantage in that it is protected from losses. Thus, if one of the companies, where the holding company owning shares, goes bankrupt, the loss does not affect the holding company.
A foundation is a non-profit organisation whose main aims are charitable and/or research-related. The actual scope of activities that foundations may carry out varies significantly between jurisdictions. Today, foundations are often used as an asset-protection tool, and so here we will discuss offshore foundations used for asset management purposes. In this respect, foundations are commonly used to accept transfers of foreign funds and property (including assets such as real estate, intellectual property, bank deposits, company shares, investment portfolios, etc.).
A trust is a company that acts as an asset manager (fiduciary) for another business. It is a legal arrangement whereby the settlor transfers his or her assets (real estate property, dividends, savings or other assets) to another person — the trustee — so that they may be used to benefit the beneficiaries (who can be either a single individual or a group). The main function of a trust is to manage assets on behalf of their owner for the benefit of the beneficiaries.
Choosing the right business structure for your company
Before contacting our lawyers, we would advise you to follow the questions in the flowchart below, in order to gain an understanding of which business structure might be best for your company. Your choice will depend on the nature of your business and your personal goals.
Confidus Solutions will help you evaluate all of the possible options and choose the most efficient, tailored solution to achieve your personal goals. We have many years of expertise in this area and our experienced agents and lawyers can incorporate your business in any jurisdiction worldwide. If you require more information, take a look at our offered solutions or contact us for an offer unique to you.