Determining the legal structure of the company 3/1
Characteristics of the companies
Sole Proprietorship (Individual)
According to Articles 10 and 11 of Trade Law No. 17 of 1999
- The company is in the name of one person who has full rights and has all obligations
- A sole proprietorship does not need a memorandum of association for a sole proprietorship company, meaning that the official paper is in the name of one person, and the person shall be over 21 years old.
- No complicated procedures required.
- Provides a number of legal privileges.
- Suitable for establishing small companies and its establishment fees are simple.
- The owner bears all the burdens alone.
- Difficulty for obtaining large amounts of loans or financing.
- The legal responsibility extends to personal funds, and there is no separation between your financial liability and the company's financial liability.
One person company (Fund)
According to Article (4) bis of Law (4) of 2018
- The company is in the name of one person who has full rights and has all obligations and the right to appoint a manager.
- The minimum capital is 50 thousand Egyptian pounds, which shall be deposited in the bank.
- Permanent ownership
- Ease of getting a loan from banks
- Transferability of shares
- Tax and savings flexibility
- High establishing costs
- The burden of compliance with a one-person company
Partnership Company (persons)
- Article 20 of the Commercial Code
- Number of partners from 2-5
- All partners are joint in rights and joint in obligations
- Easy procedures
- Its ability to generate profits
- People trust these companies
- The problems involve all partners
- The occurrence of some disagreements and conflicts
- Destabilize management
Egyptian joint stock company (Financial)
Article 2 of Law 159 of the year 1981.
The number of founders in joint stock companies shall not be less than three - and as a general principle, their issued capital shall not be less than 250 thousand Egyptian pounds, of which 10% shall be paid upon incorporation and 25% shall be completed.
There is a general assembly made up of the shareholders in the company and it has no obligations, and the board of directors is responsible for managing the company, and bears all the obligations.
- The ability to increase the capital through public subscription whenever the General Assembly so decides.
- It enjoys a wide reputation, which enables it to obtain loans and credit easily.
- The ability to use experts even if their wages are high..
- Giving the opportunity to apply the principle of specialization and division of labor in all aspects of its activities.
- The company incurs large expenses upon incorporation until it is formed and its activities are carried on.
- Interruption of the relationship between shareholders and the company's management due to the separation between ownership and management.
- The conversion of the company's activity takes a long time and many procedures.
Analytical study of the market and the financial feasibility of the project
This step is important in establishing the project from scratch and is linked mainly to conducting a market survey. This survey shall contain the following:
- Accurate and detailed identification of the target market and its size.
- Accurate identification of potential clients.
- A statement of the priority of the site for the establishment of the project.
- Measuring the ratio of supply and demand.
- Measuring the degree of competition.
- Studying the expected costs to be disbursed and the profits expected to be obtained.
Among the most important decisions that shall be taken to determine the amount of funding required is:
- Determining the capital by importantly estimating the initial one-time incorporation costs (licenses and permits, equipment, legal fees, insurance, brand acquisition and market research, inventory, brand building, grand opening events, property rental, etc.)..
- Determine the expenses you estimate you will need to keep your business running for at least 12 months (rent or purchase value and utilities, marketing and advertising, production, supplies, travel expenses, employee salaries, your salary, etc.). Therefore, the sum of these amounts represents the amount of the initial investment that you will need or the estimate of the starting capital.
The following list includes some of the authorities concerned with providing funds to assist the investor in starting his own project::
