Intro

check out the lexr standard master checklist docid\ gucunxir7gv4js4ogalcs power & money corporate law is about how people who want to work together on a business structure their collaboration, with two main issues money who puts in the money, who puts in the sweat, and who gets the money? power how are decisions about the business made? corporate structure you can choose from a variety of corporate structures when starting a business while other corporate structures are available (associations, cooperatives, general partnerships, etc ), the main distinction in practice is between (i) sole proprietorships and (ii) companies sole proprietorship a sole proprietorship is a business structure in which one individual owns and manages the entire business here are some key points about a sole proprietorship sole ownership the owner is the only person who owns the business there are no shareholders or partners this means that the owner has complete control over all aspects of the business, from business strategy to day to day operations limited access to capital as a sole proprietorship, the ability to raise outside capital is (very) limited in addition, it is not possible to bring in investors liability the owner has full personal liability for debts this means that personal assets can be used to pay business debts taxes profits and losses are reported on the owner's personal income tax return the business itself is not a separate tax entity this can make taxes easier to handle, but it also comes with personal tax obligations a sole proprietorship is not a company keep in mind that while a sole proprietorship legitimizes your business, it does not create a separation between you as an individual and your business this means that you are personally liable for your business on the contrary, if you have a company, you will (usually) not be directly affected personally, even if your business goes bankrupt company the structure of a company involves board of directors the board of directors is the executive branch of the company the board usually elects a chairman and makes decisions by majority vote it has a number of inalienable duties, which are listed here for other tasks, in particular the day to day management of the company, the board may delegate its powers to an individual (e g the ceo) general assembly the general assembly consists of all the shareholders of the company and is the supreme body of the company it must meet at least once a year and has a number of inalienable powers, which are listed here auditor depending on the fulfillment of applicable requirements, companies must appoint an external auditor to perform an ordinary (see here ) or a limited audit (see here ) companies with less than 10 employees can even waive the limited audit requirement with the consent of all shareholders as mentioned above, the great advantage of companies is that they limit the personal liability of the founders by creating a distinction between individuals and entities when incorporating a company, you can choose between a gmbh/sàrl or an ag/sa check out our incorporation docid\ kkoymjmu ike8hcmpm1vn page for more details corporate documents articles of association articles of association are highly standardized they are publicly available for all companies on the commercial register's website they outline the basics such as (i) how many shares are available, (ii) how these shares are issued and transferred, (iii) what the general assembly can decide, etc shareholders' agreements the shareholders' agreement (sha) docid\ klevxtla0hb4w mlgdyag is a confidential agreement between all shareholders it governs the details of the company's organization other corporate documents other documents related to the incorporation docid\ kkoymjmu ike8hcmpm1vn or, for example, the capital increase docid\ d6twtaykbvxzvtixlkaee carried out by the companies, are publicly available on the website of the commercial register their purpose is to formalize the decisions taken by the company that are visible in the commercial register (e g , change of seat, capital increase, etc )