Legal Entity Setup

Common Stumbling Blocks To Speedy And Compliant Legal Entity SetUp

Once you have determined your legal entity, comes the task of setting it up. Below we set out the basic gating items which are common stumbling blocks to a speedy set up.

Share Capital

Share Capital will need to be put in to the Company. In order to do this a local bank account will be required. The problem? In many countries, the bank will not set up a bank account until there is a company registration. The Registrar will not set up a company until there is a bank account. We can help you deal with this issue!

Notarization of Documents

Numerous documents will need to be notarized. Not being sure which ones they are and having documents returned by the Notary can cause delays of a couple of weeks at a time. To avoid this, we provide our clients a ready checklist of country-specific documentation requirements and make sure your paperwork is accurate

Company Name

Getting the right name also may cause problems. Either the name may not be available or it may contain words that are not allowed. It is wise to have a few alternative names and to reserve the name well in advance wherever this is permitted.

Director Liabilities

Directors have a variety of personal liabilities in most countries. If you need a local person acting as a Director, therefore, make sure they are willing to act - running around at the last minute looking for someone who is willing to act can cause delays of weeks! If you want to use a non-local director or officer, make sure there are no special requirements such as an FBI check on the individual. Such special requirements can take a lot of advance planning if a legal entity is to be set up to an agreed timescale.(Also see Corporate Governance)

Activities Of The Entity

These should be described with caution especially for a Branch and Representation Office where allowed activities are more restricted.

Registrations

In many countries, for a legal entity to start trading, a number of other registrations may be required e.g. with a Commercial or Trade Register - we can advise you on these so that you do not end up (as we have often seen) with a company with partial registration.

Repatriation of Funds

In many countries, repatriation of funds can create problems and, to allow it, appropriate wording must be included in the Articles and Bylaws .

These are general guidelines, for more information on your specific country or situation, please connect with us.

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