The country’s economic structure includes various types of legal entities. The variety of forms in which legal entities can operate allows them to effectively carry out their functions, adapt to market requirements, and meet citizens’ needs. In this article, we will look at the types of legal entities in Belarus and their characteristic features. Understanding the diversity of legal entities in Belarus is important for entrepreneurs and consumers.
Why is it important to understand what types of legal entities exist in Belarus
Understanding the different types of legal entities in Belarus is essential for entrepreneurs and a wide range of professionals and citizens. Here are a few key reasons why this knowledge is of particular importance:
1. Choosing the appropriate organizational and legal form
Each form of legal entity has its advantages and disadvantages. Awareness of their differences allows entrepreneurs to choose the most appropriate structure for their business, which can optimize work and increase economic efficiency.
2. Legal obligations and responsibilities
Different types of legal entities are subject to various legal norms and requirements. Knowledge of these aspects helps to avoid legal risks associated with non-compliance with legislation and provides excellent legal protection.
3. Taxation
Tax obligations may also differ depending on the organizational and legal form of a legal entity. Understanding these differences lets you plan your financial strategy more effectively and minimize tax expenses.
4. Financing opportunities
Different types of legal entities have other opportunities to attract investments and loans. This knowledge will help entrepreneurs choose a structure that can provide access to the necessary financial resources.
5. Adaptation to changes in legislation
The legal environment is constantly changing, and understanding the existing forms of legal entities allows you to quickly adapt to new conditions, change your activities, and maintain compliance with the law.
Thus, knowledge about the types of legal entities in Belarus is a critical factor in successful business and legal interaction, affecting the overall dynamics of the country’s economic development.
Who can organize a company in Belarus?
An individual, a legal entity, several individuals and/or legal entities can establish a legal entity in Belarus. Foreign companies and non-resident individuals may be among the founders.
Who cannot be the founder of a legal entity?
Some legal entities cannot be founders. This applies to government agencies.
Also, persons cannot be founders:
- Who has a criminal record for crimes against property and the order of economic activity, and the criminal record has not been withdrawn or repaid.
- Regarding which court orders on the recovery of money and other property have not been executed.
- Individuals concerning whom the executive order on collecting taxes and mandatory payments has not been executed.
- The property owners and company heads for whom the liquidation process has not yet ended or for whom the court has opened bankruptcy proceedings.
- Owners of the Company’s property are individual entrepreneurs whose debt has been recognized as harmful and written off if less than three years have passed since the exclusion date from the Unified State Register of Legal Entities and Individual Entrepreneurs (USR).
- Having court-imposed prohibitions on the establishment of companies.
How legal entities are created in Belarus
Legal entities establish or create new ones when reorganizing existing ones. The founders document their decision to open a company to create a legal entity. The content of such a solution must meet specific requirements. You can contact our lawyer to draw up this document.
Before creating a legal entity, it is necessary to coordinate its name with the registration authority and find the legal address—this is where the Company’s management body will be located.
Types of legal entities in Belarus
The varieties of legal entities are determined by their different ownership structures, how the Company is managed, and the specifics of liability for obligations. Legal entities can be commercial or non-commercial.
Commercial legal entities
These companies aim to make a profit and distribute profits among the owners.
Limited liability company
The most common form for small and medium-sized businesses. The participants are liable for the obligations of the Company only within the limits of their contributions to the authorized capital. The authorized capital of an LLC is divided into shares according to the number of participants. It is important to note that Belarus has no minimum size of the authorized capital for a limited liability company (LLC). An LLC can be established by either one participant or a group of participants, the number of which does not exceed 50. Participants can be both legal entities and individuals.
Additional Liability Company (ODO)
This form of business organization is less common. It differs from an LLC in that the charter must provide for subsidiary liability of owners for the debts of a company created in the form of an ODO in the amount of at least 50 basic units (which is 2000 Belarusian rubles or about 560 euros). Subsidiary liability implies additional responsibility of the owners in addition to the responsibility of the Company itself in the form of ODO.
Otherwise, organizing an ODO is similar to creating an LLC: the authorized capital is divided into shares depending on the contributions of participants, which are no more than 50, and these can be both legal entities and individuals.
Open Joint Stock Company (JSC)
This legal entity allows you to attract funds from a broad audience of investors through the issue of shares. JSC can freely dispose of its shares and transfer them to other persons through an open subscription.
In a joint-stock company, the authorized capital is divided into a certain number of shares with an established nominal value. The minimum size of the Company’s authorized capital is 400 basic units, equivalent to 16,000 Belarusian rubles or about 5,000 euros.
The number of shareholders is not restricted, and the Company independently determines exactly how many there will be.
Closed Joint Stock Company (CJSC)
This form of Company is similar to a joint stock company in terms of creation, but the number of shareholders in a joint stock company is limited only by its founders. In this case, shares are not sold publicly.
The minimum size of the CJSC’s authorized capital is 100 basic units, which corresponds to 4,000 Belarusian rubles or approximately 1,250 euros.
LLC, ODO, and joint-stock companies belong to business entities. The supreme governing body in business companies is the general meeting of participants. In an LLC, one participant is established; he is also the supreme governing body.
Unitary enterprise
A unitary enterprise is a company with a single founder who owns the property. The authorized capital of such an enterprise is not divided into shares. An individual or a legal entity can create a unitary enterprise, which can be private or public.
The management body in a private unitary enterprise is the head, who is appointed by the legal entity’s owner. The head may be the enterprise’s owner or an individual.
A unitary enterprise is liable for its obligations with all the property that belongs to it.
Production cooperative
A production cooperative is a commercial legal entity organized by individuals who make property contributions and work in the cooperative. The founders of the cooperative are responsible for its debts in equal shares, not less than the amount of the annual income received in the cooperative. The name of the cooperative should include the words “production cooperative” or “cartel.”
The cooperative’s supreme governing body is the cooperative members’ general meeting.
Peasant (farm) economy
This commercial organization is created by one person or family who has contributed property. A farm is designed for activities related to the production and processing of agricultural products by the personal work of the founders on the land.
Non-profit legal entities
Non-profit legal entities do not aim to generate profit and distribute it among the participants.
The goals of creating non-profit organizations can be charitable, social, cultural, educational, scientific, and others that are aimed at the public good, as well as to meet the material needs of members of non-profit organizations – citizens and legal entities.
Forms of non-profit organizations
Non-profit organizations can be created in the form of:
- Consumer cooperatives.
- Public or religious organizations (associations).
- Institutions that are financed by the owner-the state.
- Charitable foundations.
Entrepreneurial activity of non-profit organizations
Non-profit legal entities can engage in entrepreneurial activity only to achieve the goals for which they were created. Some types of non-profit organizations may be founders of commercial organizations or owners of their property.
The optimal form for a legal entity depends on several factors, including the intended business strategy, the level of risk, and the need to attract external investments.
Contact us
If you have any questions or disputes regarding legal entities in Belarus, we will be happy to help! Our long-term experience in divident payment will help you resolve any disputes in this area.
- +37529366-44-77 (WhatsApp, Viber, Telegram);
- info@ambylegal.by.
