Which type of business should you choose is legal content that readers often need to check carefully before implementing it in practice. This article has been systematized by ANT Legal in an easy-to-understand way, helping individuals and businesses understand the main problems, common risks and appropriate solutions.
Choosing a business type is an important step when establishing a company. To make the correct choice, you need to pay attention to the pros and cons of each type of business.
Private enterprise
A private enterprise is a business owned by an individual. Individuals are solely responsible for all of their assets for all activities of the enterprise.
Advantages of the private enterprise type
The owner of a private enterprise has full decision-making authority over all business activities of the enterprise;
Unlimited liability regime creates trust for partners and customers goods.
Helping businesses be less closely bound by the law like other types of businesses;
Have full authority to decide on the use of profits after paying taxes and performing other financial obligations.
Disadvantages of private enterprises
High risk because of unlimited liability with all of their assets;
Each individual is only entitled to establish one private enterprise;
Private enterprises are not allowed to contribute capital to establish or buy shares or capital contributions in partnerships, limited liability companies or joint stock companies;
Not allowed to issue securities, nor sell capital contributions to individuals or organizations other.
One-Member LLC
A One-Member LLC is an enterprise owned by an organization or an individual according to LDN 2014. The company owner is responsible for the debts and other property obligations of the company within the company’s charter capital.
Advantages of the LLC business type 1 member
Limited company has legal status, low risk because it is only responsible within the scope of capital contribution;
Company management structure is streamlined and effective, the owner has the highest decision-making power;
Has the right to transfer capital to other individuals or organizations.
Disadvantages of public enterprise type 1 member limited liability company
It is not allowed to issue stocks or bonds to raise capital;
When raising capital by transferring capital to individuals or organizations, procedures must be carried out to convert into a limited liability company with two or more members or a joint stock company.
Limited company with two or more members
Limited company with two or more members is an enterprise where members are responsible for property obligations within the amount of capital committed to contribute to the enterprise. Members of the company can be organizations or individuals; The minimum number of members is 02 and the maximum does not exceed 50.
Advantages of the 2-member LLC business type
Company members are only responsible for the company’s activities within the scope of capital contribution, so there is little risk for capital contributors;
The capital transfer regime is strictly regulated, so investors can easily Easily control the change of members, limit the penetration of strangers into the company.
Disadvantages of the 2-member LLC business type
Limited companies with two or more members are not allowed to issue shares;
Limited to capital contributing members, no more than 50 members member.
Partnership company
A business must have at least 02 members who are joint owners of the company, doing business together under a common name and are called general partners. In addition to general partners, the company can have additional capital contributing members.
Advantages of the CTHD business type
Having legal status.
The company has two liability regimes: LLC (for capital contributing members) and unlimited liability with its assets (for general partners), so there is trust in partners and customers. company;
The management of the company is not too complicated because the number of members is small and they are reputable people who absolutely trust each other.
Disadvantages of CTHD business type
Not allowed to issue shares to raise capital;
Partnership members want to transfer their capital contribution to others The approval of the remaining partners is required.
Joint company
JSC is a type of company with a minimum number of members of 03. Capital contributing members are called shareholders. charter capital is divided into equal parts called shares. Shares are established and exist independently.
Advantages of the enterprise type Joint Stock Company
The company is only responsible for debts within the scope of contributed capital, so the risk level of shareholders is not high;
Issuing securities, so the ability to mobilize capital is large;
Unlimited number of participating shareholders capital contribution;
Easy to buy, sell and transfer capital;
The range of participants is very wide.
Disadvantages of the JSC business type
The company’s structure and organization are quite complicated, so management is also complicated;
Issues about Accounting and taxes are strictly controlled by law;
The ability to keep business confidential is limited due to having to publicly report to shareholders.
Consulting services for establishing new businesses of ANT Legal
Establishment of private enterprises
Establishment of a one-member limited liability company.
Establishment of a limited liability company with two or more members.
Establishment of a joint stock company.
Establishment of a partnership company.
Establishment of a branch/representative office/business location business.
ANT Legal always proud to be a company providing services for establishing new businesses. With that experience, we are confident in providing business establishment services.
Note on Applying Current Legal Regulations
This article belongs to the Business & M&A group and is presented for reference purposes, helping readers understand the legal issue at an overview level before preparing a dossier or carrying out a transaction.
Related service · P1
M&A, Equity Transfer and Project Transfer
If you are preparing an equity transfer, M&A transaction, project transfer or restructuring, ANT Legal can help review legal risks and transaction structure.
Website information is for general reference only and does not replace legal advice for a specific matter.
Legal regulations may vary depending on the timing, locality, type of dossier and specific circumstances. If you need to determine the exact legal basis applicable to your case, you should contact ANT Legal’s lawyers at 0966.475.966 for review and advice before proceeding.
Common Legal Risks to Note
- Applying legal instruments that have been amended, supplemented or replaced.
- Preparing an incomplete set of documents, materials or necessary evidence.
- Misunderstanding the conditions, procedure, timeline or competent authority.
- Signing, submitting a dossier or carrying out a transaction before fully assessing legal risks.
How Can ANT Legal Support You?
ANT Legal can review the specific circumstances, examine the dossier, identify the applicable legal basis, advise on an appropriate handling plan and represent clients in working with individuals, organizations or competent authorities where necessary.
For prompt advice, you may contact a lawyer at 0966.475.966.
Related Articles
Practical points to review
For the topic “What type of business should I choose”, readers should compare the legal rule with the actual documents, parties involved, timeline and evidence before choosing a course of action.
- Identify the legal relationship, signing authority and documents creating rights or obligations.
- Check deadlines, notices, payment records, approvals and evidence that may affect the legal position.
- Assess whether negotiation, document correction, complaint, arbitration, court proceedings or another route is suitable.
Documents to prepare
- Contracts, annexes, decisions, notices, emails, messages, payment records and handover/acceptance minutes where relevant.
- Enterprise, asset, license or identity documents connected to the matter.
- A short timeline of key events and the outcome expected from the review.
When to seek legal advice
If the matter has high value, strict deadlines, multiple parties, unclear evidence or potential dispute risk, consider discussing the file with ANT Legal before signing, responding or filing a claim.
Related service: ANT Legal services. You may also contact ANT Legal through the official website.
This content is for general reference only and does not replace legal advice for a specific file. A service relationship is formed only after scope and fees are agreed.
Discuss this matter with ANT Legal
M&A, Equity Transfer and Project Transfer 
Tiếng Việt
中文 (中国)
