Preparing for company formation
In order to establish an efficient, fully operational company, there are a number of strategic decisions you will need to make. We strongly recommend that you read our step-by-step tutorial on forming a company, or that you contact our lawyers. A wrong decision at this point may prove to be a critical error in the long term, and so you should be extremely diligent in evaluating your capabilities and defining your personal goals.
Defining the purpose of the company
The first thing you need to decide is what your company’s purpose and scope of activity is going to be. Are you intending to use it for international or online trading operations, or simply for holding your personal assets? Or are you going to use your offshore company as a holding enterprise for another company? Now is the time to decide these questions, as they will affect the jurisdictions we suggest; each offers certain benefits for each type of company, and so to ensure the most efficient result it is essential to know exactly how the company is to be used. You can read more about company types by business structure here.
Choosing the right jurisdiction and legal structure
Once you have defined your strategy and decided how the company will be used, there are two other vital decisions to make that will affect all subsequent action: the jurisdiction in which you incorporate your company, and the legal structure you choose for it. These two factors will determine a great many things, including the company formation procedure, the documents required and the taxes your company will pay. You can learn more about the top offshore jurisdictions and company types on our website.
The most commonly used legal structure is a limited liability company or simply LLC, a commercial company type with legal personality status. Typically, an LLC’s equity capital consists of the total par value of its equity shares. One of the major features and benefits of any LLC is the fact that shareholders can’t be held personally responsible for the company’s debts or liabilities — only the assets of the business itself are at risk. A major difference between a joint-stock company and an LLC is that the latter is always a close company and its shares are not publicly traded. You can read more about LLCs here.
If required, Confidus Solutions’ specialists can provide you with detailed consultation and prepare a legal opinion to help you choose the best jurisdiction and legal structure for your business.
Choosing a company name
After deciding on your company’s scope of activity and legal structure, it is time to choose an official company name. In most countries, the business name can be either in the national language or in any language using the Latin alphabet. However, there are some exceptions, for example, in Lithuania, the company name must be in Lithuanian, and an English name can be used only after confirmation that the company is also incorporated outside Lithuania with the same name has been received, but this is something of an exception. Usually, you are completely free to choose any name as long as it is written in the Latin alphabet. Prior to drafting your incorporation documents, our lawyers will check that the business name you have chosen is currently available in the relevant jurisdiction.
There may be other requirements as well, depending on the country — if you are interested in knowing more about company name requirements in a specific jurisdiction, contact us now.
Once you have decided where your company is to be located and what legal form it is to take, you will need to think about the legal address — the official registered address of the company, where the company office and directors are situated. Please be aware that the company’s legal address must be within the territory of the country where it is registered.
The legal address must be decided prior to submitting any documents to the company register, and it will be recorded along with the other official information. The office address will also be used for correspondence; in some countries, it is permitted to register a post office box as a company address.
Despite the fact that the legal address is the official company address, actual business activities can take place at a different address. For example, if the company is involved in trading activity, the legal address may be where the company board and secretary are based, but the warehouse and/or store can be located elsewhere. If a company has a number of shops, these shops can be registered individually as separate functional units, but the business as a whole will be officially based at its legal address. If necessary, the company address can be changed at a later stage.
Legal addresses are often rented, together with virtual office services, if required. We can provide you with a local address in any country worldwide.
After all the preparatory work has been done, you can proceed with filing the relevant documents at the local company register. Click here to read more about the next step, or contact us if you have any questions.