So, you’ve made the decision to expand globally – but what is the next step? It’s time to set up a legal entity in your chosen location. Let’s take a look at legal entity types in some of the most common locations for global expansion to see what will be most suitable for your business.
UK legal entities
Let’s get started with the legal entity types you’ll find in the UK, and what they mean.
- Private Limited Company (Ltd): This is the most common business set up in the UK, it offers limited liability and a structured framework for growth.
- Public Limited Company (PLC): Like a Ltd, but with shares available for public trade. This is great for a larger company.
- Partnership: To keep this one simple, you team up with others; share responsibilities, profits, and risks.
- Limited Liability Partnership (LLP): A LLP combines the flexibility of a partnership with limited liability protection.
- Sole Trader: You’re the boss and responsible for everything.
Which option you select can have an impact on your trading, taxes and ability to hire employees, so it’s important to take time to consider your future plans when setting up a legal entity in the UK. Most of the UK entity options can be applied for online with a 24-hour turnaround, however, if you need to apply via the paper registration process allow 8 – 10 working days.
US legal entities
Next, what are the US legal entity options and how do you apply for them?
- Limited Liability Company (LLC): This option allows you the flexibility of limited liability without any corporate red tape.
- Corporation (Inc. or Corp.): A corporation is usually used by much larger businesses in the US.It provides much better liability protection for the business owners.
- Sole Proprietorship: Similar to a sole trader in the UK, this is basically just you on your own doing it all!
- Partnership (General Partnership or Limited Partnership): A partnership is exactly what it says, two people coming together to form a business. You share everything, risks, profits, responsibilities.
You can usually set up a legal entity in the US online, however, it can all depend on the state you’re operating in. Generally, it can take anywhere from a few days to a few weeks to complete the process. Some states offer expedited filing options for an additional fee, which can shorten the processing time.
Canada legal entities
In Canada you have 5 different legal entity types to choose from:
- Corporation (Inc.): Offers limited liability and potential for growth.
- Partnership: Team up with others and divide responsibilities, risks and profits.
- Limited Liability Partnership (LLP): Partnerships made safer; limit your liability while collaborating with others.
- Sole Proprietorship: You’re in charge of it all.
- Cooperative: Cooperatives are owned and controlled by their members, who contribute to and control the cooperative.
Setting up a sole proprietorship or partnership usually moves pretty swiftly, taking anywhere from a few days to a couple of weeks. However, getting a corporation up and running might take a bit longer, usually from a few weeks to a couple of months. It all depends on how complicated the incorporation process is and how busy the registration authorities are.
France legal entities
In France your legal entity options are:
- Société à Responsabilité Limitée (SARL): This option offers flexibility, protection and limited liability.
- Société Anonyme (SA): This is the french option for a publically traded company.
- Société par Actions Simplifiée (SAS): A SAS is tailor-made for your specific business needs.
- Entreprise Individuelle: You do it all!
- Entreprise Unipersonnelle à Responsabilité Limitée (EURL): Independent but protected; limited liability for a single person.
The time it takes to set up a legal entity in France can vary. Generally, it can take several weeks to a couple of months to complete all the necessary steps, especially if there are any delays in document preparation, registration processing, or obtaining permits and licenses
Spain legal entities
If you’re looking to expand to Spain, these are the legal entity types you’ll have to choose from:
- Sociedad Limitada (SL): Limited liability, maximum potential; the go-to choice for many Spanish businesses.
- Sociedad Anónima (SA): Ideal for ambitious ventures looking to attract investors. This is a publically traded company.
- Sociedad de Responsabilidad Limitada (SRL): Similar to a limited liability company. Offers protection to the owners.
- Sociedad Colectiva: Teamwork makes the dream work, share the journey with your business partners.
- Autónomo: This is for independent business owners; you do everything yourself.
Setting up a legal entity in Spain can take from several weeks to a couple of months to complete. Factors such as the workload of the registration authorities, any additional requirements specific to your business activity, and potential delays in document processing can influence the overall timeframe.
Italy legal entities
The legal entities in Italy are:
- Società a Responsabilità Limitata (SRL): Limited liability tailored to Italian business needs.
- Società per Azioni (SpA): Publicly traded and built for substantial growth.
- Impresa Individuale: One-person business, you do it all.
- Società in Nome Collettivo: Partnership with shared responsibilities.
- Società in Accomandita Semplice: Limited liability partnership with shared goals.
Setting up a legal entity in Italy involves varying timeframes depending on the type of entity chosen. Generally, forming a Società a Responsabilità Limitata (SRL) or Società per Azioni (SpA) typically takes around 2 to 6 weeks. For an Impresa Individuale, the process is relatively quick, usually within 1 to 2 weeks. Partnerships like Società in Nome Collettivo or Società in Accomandita Semplice follow a similar timeframe to SRLs spanning about 2 to 4 weeks
Germany legal entities
Germany has 5 legal entity types you can choose from when expanding into it:
- Gesellschaft mit beschränkter Haftung (GmbH): The German standard for limited liability.
- Aktiengesellschaft (AG): The option for larger public companies.
- Einzelunternehmen: Solo person business.
- Offene Handelsgesellschaft (OHG): A partnership with shared responsibility.
- Kommanditgesellschaft (KG): Limited liability partnership with added security.
Depending on which option you choose when setting up a legal entity in Germany, it can take anywhere from 1 – 8 weeks. An einzelunternehmen takes between 1 – 2 weeks, whereas an aktiengesellschaft can take 6 – 8.
Ireland legal entities
Next up we have Ireland, some of the legal entity types in Ireland are similar to that of the UK:
- Private Company Limited by Shares (Ltd): Limited liability company.
- Public Limited Company (PLC): Publicly traded company, ideal for ambitious ventures seeking growth opportunities.
- Company Limited by Guarantee: Non-profit, maximum impact; contribute to a cause while enjoying limited liability.
- Sole Trader: You’re on your own, and so you do it all!
- Partnership: Shared vision, shared success; team up with others to run your business together.
Setting up a legal entity in Ireland typically takes a few weeks to a couple of months, depending on the type of entity chosen and various administrative factors
Australia legal entities
Legal entities you can set up in Australia are:
- Proprietary Limited Company (Pty Ltd): Limited liability and structure for success.
- Public Company (Ltd): Publicly traded and poised for significant growth opportunities.
- Sole Trader: A company where you do it all on your own.
- Partnership: Join forces with others and share the journey, profit and responsibi
- Trust: Manage assets and investments with security.
When setting up a legal entity in Australia it typically ranges from several weeks to a few months. It all depends on what legal entity type you choose. Processes involve drafting constitutions, obtaining registration numbers, and registering with relevant authorities like ASIC. Timelines vary based on entity complexity and regulatory requirements.
Netherlands legal entities
Last, but by no means least for this blog, we have the legal entity types for the Netherlands:
- Besloten Vennootschap (BV): Limited liability and flexibility for your business.
- Naamloze Vennootschap (NV): Publicly traded and designed for ambitious growth.
- Eenmanszaak: Keep it simple and take full control of your business.
- Vennootschap Onder Firma (VOF): Share the journey and the rewards with your business partners.
- Commanditaire Vennootschap (CV): Limited liability, shared goals; partnership with added security.
Establishing a legal entity in the Netherlands generally takes between four to eight weeks, depending on the entity type and administrative procedures involved.
Using an agency to help!
Understanding all the legal entity types for each country and being able to figure out the paperwork in different languages can feel a bit overwhelming when you’re first entering a new market. Luckily, you have the option to use a global expansion service (like JPS!) who already know what they’re doing.
If you’re looking to expand your business reach out to us today and let’s have a chat about what legal entity would be best for your organization.