Commercial laws: 2.BUSIUNESS FORMATION

Commercial laws: 2.BUSIUNESS FORMATION


November 10, 2022


Limited liability companies when looking to start a business or protect investments, you have several options in creating a business entity. An LLC is a share company, which means that ownership of the number of shares owned by each person. The shareholders may be either natural or legal person. The advantage of a share company is that the owners generally are not liable for the company’s debts beyond their original investment.


To do business in Afghanistan, must have a business license from the Afghanistan central business registry (ACBR) of the ministry of industry and commerce. As part of the registration process, an LLC files its articles of incorporation with the ACBR, including the identities of the shareholders. Note that certain industries (e.g., private security, pharmaceuticals, telecommunications) require additional licenses or approvals from respective ministries and may be subjected to additional costs and fees.


Partnerships

A popular option for people who do not want to form a share company is creating a partnership. Partnerships provide less protection than LLCs because the individual partners may be held personally liable for the debts of the company. However, partnerships have the advantage of being less formal, and requiring less paperwork, then share companies. There are four types of partnerships: general partnership; special partnership; work partnership; and credit partnership.


In practice, most partnerships will be general partnerships. A special partnership may be appropriate where some partners will have unlimited liability, but other partners’ liability will be limited. A partnership may be formed specifically where the partnership will perform work for a third party and the partners will share the profits. A credit partnership is one in which the partners agree to buy goods on credit and share the profits after resale.


Like LLCs, partnerships should be registered with the ACBR.


Related Contents

Commercial laws: 1. COMMERCIAL CONTRACT

Commercial laws: 2.BUSIUNESS FORMATION

Commercial laws: 3. INTELECTUAL PROPERTY

Commercial laws: 4. INSOLVENCY

Commercial laws: 5. COMMERCIAL ARBITRATION/MEDIATION

Commercial laws: 6. PUBLIC PARTNERSHIP AND PUBLIC PROCURMENT

Commercial laws: 7. CONSUMER PROTECTION LAW

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