A business entity is formed and administered per corporate law. These laws enable the entity to engage in business activities, charitable work, or other activities. there are many types of business entities defined in the legal system of various countries in Asia.
It should be important to note that the regulations used to govern a particular type of entity, though roughly equivalent, differs by jurisdiction. So when forming or restructuring a business, take note of the legal responsibilities that depend on the types of business entity chosen.
Company Structure in Asia
As earlier observed, a business entity differs based on the jurisdiction of where it is formed. Some countries in Asia will be outlined to check the types of company structures there.
China
In China, the company structures include two types;
- A company with limited liability, ltd
- Corporation, incorporated company, plc like a joint-stock company
There are other types of companies there, which are ordinary firms and they are of two types:
- Sole trader
- Partnership
Hong Kong
Hong Kong has the following types of structures:
Ltd (limited)
It denotes either a private or public company, they are limited by shares or a company limited by a guarantee. The Hong Kong company ordinance, states that the names of an incorporated company in Hong Kong, are registered either in English or Chinese, or both.
Unltd or Ultd (unlimited), is similar to the limited, except that there is no benefit for the members or shareholders if the company should go into formal liquidation. There is also no requirement under the company law, to add or state the designation Unlimited or its abbreviations at the end of its legal company name, and most of the unlimited companies in Hong Kong do not do so.
India
In India, the company law states the following types of business entity which are:
Sole proprietorship
It is the simplest form of business entity in the country, it is owned and managed by one person. It is also easier to register and start in India, as it is not governed by any of the Indian company laws; therefore, all the decision-making and management is in the hand of a single person. The documents required for the registration of a sole proprietorship in India are an Aadhar card, PAN card, bank account, and proof of registered office.
Partnership
The registration of the liability, which can be joint and unlimited is not compulsory. It is done through the registrar of firms. Aside from investing in it, active partners also take part in its daily operation. They are entitled to the business profits. Sleeping partners, on the other hand, invest in the enterprise but do not engage in its daily affairs.
Limited liability partnership
The liability is limited and similar to a partnership, except it is mandatory that it is registered and the liability is limited. At least, designated partners of two persons manage the daily activities. It is also regulated by the union government.
Company
The private limited company has 2-200 shareholders, the shares are privately held and cannot be offered to the public. Registration is mandatory and has limited liability; It is also regulated by the union government.
A public limited company can have more than 200 shareholders, it can be listed or unlisted in the share market.
A one-person company is a private company, with one director and member.
The unlimited company has similarities to the limited company but the liability of members and shareholders is not limited.
Public Sector Undertaking (PSU) or Public Sector Enterprise (PSE) can be a public limited company on the stock exchange list, though its major ownership is the government.
Cooperative societies and Non-governmental organizations (NGOs) are also regarded as company structures
Indonesia
Legal entities in Indonesia, are regulated in a modified version of Dutch laws. They include:
- Yayasan: foundation;
- UD (Usaha Dagang) also known as a sole proprietor;
- Vof/fa locally known as Firma: general partnership;
- Koperasi: cooperative;
- Mts (Maatschap) also known as group practice for professionals;
- Perusahaan is a more common type for smaller businesses;
- Perseroan Terbatas is a private company limited by shares;
- Perseroan Tabatas Terbuka is also known as plc.
Iran
In Iran, the following are its company structure; Plc, plc private, ltd, limited partnership, mixed joint-stock partnership, general partnership, proportional liability partnership, and production and consumption cooperative.
Israel
Companies in Israel include:
- Private companies,
- A public company, in which shares are listed on a stock exchange or are offered and held by the public
- Charity companies are governed by the companies act except it is non-profit.
- Partnership
- Cooperative
- Voluntary.
Japan
Business cooperation is referred to as Kaisha. There are 4 types with a legal personality for each.
- Kabushiki Kaisha is translated as company limited;
- Godo Kaisha amalgamated company;
- Gomei Kaisha similar to a limited partnership
- The partnership is also referred to as kumiai.
United Arab Emirates
In UAE, there are free zones, a free zone establishment or company, is a limited liability company governed by the rules and regulations of the relevant zone it is established.
