When starting a business, it is easy to get discouraged by the complexity and number of different forms of company formation. However, there are three main forms of company:
- The limited liability company (LTD)
- The public limited company (PLC)
- The simplified joint stock company
These three types of company have strong similarities. However, there are some differences that need to be taken into account when choosing a legal status.
The public limited company is the most specific. It meets ambitious needs such as the public offering of financial securities. It is also a preferred form if you want to take your company public. However, PLCs are restrictive. At least seven partners must be present to form a company. Similarly, the minimum share capital is €37,000.
LTDs and simplified joint stock companies are much simpler to operate. Firstly, only one person is needed to start up this legal structure. They have many points in common, as there is no difference between these forms of company with regard to:
- The obligation to draw up articles of association
- The quality of the partners
- The contributions to the share capital
- The duration of the company’s life
However, there are some essential differences depending on your project:
- The share capital of simplified joint stock companies is divided into shares. This type of company is managed by a president.
- LTDs, on the other hand, have a share capital divided into shares of the same category and are managed by one or more managers.
Determining the ideal status therefore depends on the initial project that launched the formation of a company. Everything will depend on the objective of the future entrepreneur or the number of partners, as both statutes have advantages and disadvantages. In addition, they are both quick to set up, as there is no minimum or maximum capital. However, it is important to note that the operation of an LTD is more rigid than that of a PLC.