A single or several people may own a liable company. Depending on the owner situation, the company is denoted:
- Self-employed (sole proprietor) business,
- Liable company (ANS), or
- Liable company with divided liability (DA). In this type of company the personal liability of the owners is limited relative to each participants share.
A liable company has at least two owners (partners), while the self-employed business only has one.
For both types, the owner/-owners is/are responsible for the company’s debts with his/their personal assets.
In case of bankruptcy, the owner of a self-employed business is personally responsible for settlement of the business’ debts.
The same applies to the owners-/partners of a liable company.
This may lead to the loss of your personal assets (home, summer house etc.), if the business is unable to settle its debts.
For liable companies, Act no. 83 of 1985 “On liable companies and limited partnership” applies. The law requires that the partners establish a company agreement.
The law specifies the necessary contents, including rules for partner assembly meetings. Furthermore, there are rules for dealing with the following situations:
- a part ownership is transferred to a new owner
- one of the owners leave the company
- division of profit
- the company is closed down.
A Self-employed business is not regulated by a particular law.
There are no requirements regarding initial capital or the way the company is organised and operated.
Last changed: 17/01/2012 Print