Ensuring Security from the Very First Steps
of Establishing a Company
If you look on the Internet, you will find many places where you are being presented with an offer to have a limited liability company set up for you for a very cheap price. Utilizing these “penny companies” is not a problem, as long as you are willing to make some serious compromise and accept a frim that lacks any personalization, as your sole purpose is to get a company of some kind (any kind) registered under your name as quickly as possible. In these cases, such services may even be suitable for you.
Having said that, if you are thinking in the long term with regard to the business you want to run and you goal is to get maximum security for your company (especially if there are other individuals involved in the planned or already operating company), it is of paramount importance to be as careful as possible when establishing a company to avoid serious inconvenience and/or disputes later on.
Thus a well-constructed/though out company structure is a key factor in the success of any firm.
Topics to Consider when Founding a Company
As part of this process – and provided that you are not choosing from the so-called "ready-made" or "blanket companies" – you should clarify with the legal professional working with you such as items as:
What is the exact content that the members of the company wish to include in the company’s articles of association and whether they wish to enter into a separate syndicate agreement parallel with the establishment of the firm (this is important because company documents are available to all from public records, whereas a syndicate agreement provides the members with the option to regulate company matters confidentially).
Of the same importance is the proper regulation of the transfer of shares (i.e. the separation of a member from the company) or other circumstances affecting the preexisting company structure. This will enable the members to set up a system which ensures that their interests and those of the company are safeguarded in such events as the transfer of shares, death of a member or the dissolution of the marriage of a member where the member’s share was part of spouses’ joint matrimonial property.
Again, this is a cardinal issue, the proper regulation of which goes beyond the possibilities offered by “blanket companies”, since the fundamental concept of a business organization is to generate profits for its owners, and thus the establishment of appropriate – and enforceable (!) – rules is critical.
Such a need is inherent in multi-member companies that the members seek to create a corporate structure that meets their own specific needs, rather than the general rules set out by the Civil Code that are applicable to blanket companies. Again, this is a topic that requires careful consideration as the regulations does not only have to serve the needs of the of the members but they must also conform with the framework set out by corresponding laws
NGOs
In addition to the so-called for-profit companies, I should also mention NGOs. Their importance (albeit in different respects) is as unquestionable as that of the companies that drive the market. The recent tightening up of legislation therefore makes it advisable to seek professional advice for both the establishment and the operation of NGOs.
Consult a Specialist!
If you wish to set up a company or if you have any questions about the operation of a company (including the resolution of any disputes that may arise in relation to firm), please do not hesitate to contact me using one of the contact details below. I have many years of experience in the day-to-day running of various Kft-s (“LLC”-s), Bt-s and Kkt-s and I also have extensive experience in dealing with associations and foundations.