List of legal entity types by country in Europe

Whether you’re setting up a business in Europe or already have one, it’s important to understand the various legal entities available and the tailored regulations that apply per country for governing and holding such entities accountable. In this article, we’ll discuss the different forms of legal entities in Europe, including private and public limited companies, limited partnerships, sole proprietorships and associations. We also look at associated aspects such as corporate governance, accounting, and status declaration.

Denmark

  • ApS (Anpartsselskab) – private limited company
  • A/S (Aktieselskab) – public limited company
  • IVS (Iværksætterselskab) – entrepreneur limited company
  • K/S (Kommanditselskab) – limited partnership
  • F.M.B.A. (Forening Med Begrænset Ansvar) – association with limited liability

Learn more about doing business in Denmark.

Sweden

  • AB (Aktiebolag) – public limited company
  • HB (Handelsbolag) – general partnership
  • KB (Kommanditbolag) – limited partnership
  • Enskild Firma (Sole proprietorship)
  • Ekonomisk förening (Economic association)

Read further on starting a business in Sweden.

Norway

  • AS (Aksjeselskap) – public limited company
  • ASA (Allmennaksjeselskap) – public limited company
  • ANS (Ansvarlig selskap) – partnership with unlimited liability
  • NUF (Norskregistrert utenlandsk foretak) – foreign registered company
  • Enkeltpersonforetak (Sole proprietorship)

Doing business in Norway guide.

Finland

  • Oy (Osakeyhtiö) – public limited company
  • Ay (Avoimen yhtiön) – general partnership
  • Ky (Kommandiittiyhtiö) – limited partnership
  • Tmi (Toiminimi) – sole proprietorship
  • Osuuskunta (Cooperative)

Read more on doing business in Finland.

Iceland

  • EHF (Einkahlutafélag) – private limited company
  • HF (Hlutafélag) – public limited company
  • Einkafélag (Sole proprietorship)
  • Félagssamtök (Association)
  • Samvinnufélag (Cooperative)

Learn more in our guide on doing business in the Nordics.

Germany

  • GmbH (Gesellschaft mit beschränkter Haftung) – limited liability company
  • AG (Aktiengesellschaft) – public limited company
  • OHG (Offene Handelsgesellschaft) – general partnership
  • KG (Kommanditgesellschaft) – limited partnership
  • e.V. (eingetragener Verein) – registered association
  • GbR (Gesellschaft bürgerlichen Rechts) – civil law partnership

Read more about the DACH countries

France

  • SAS (Société par Actions Simplifiée) – simplified joint stock company
  • SARL (Société à Responsabilité Limitée) – limited liability company
  • SA (Société Anonyme) – public limited company
  • SNC (Société en Nom Collectif) – general partnership
  • SCI (Société Civile Immobilière) – real estate company

United Kingdom

  • Ltd (Limited Company) – private limited company
  • Plc (Public Limited Company) – public limited company
  • LLP (Limited Liability Partnership) – partnership with limited liability
  • CIC (Community Interest Company) – social enterprise
  • CIO (Charitable Incorporated Organization) – charity

Ireland

  • Sole Trader: An individual who runs a business and is solely responsible for its debts and liabilities.
  • Partnership: Two or more people carrying on a business with a view to making a profit.
  • Company Limited by Shares: A company with shareholders whose liability is limited to the amount they have invested.
  • Designated Activity Company (DAC): A type of company that is required to have a specific purpose.
  • Company Limited by Guarantee: A non-profit company where the liability of members is limited to a predetermined amount.
  • Unlimited Company: A company with no limit to the liability of its members.

More on Ireland in our guide on doing business in Ireland.

Italy

  • Srl (Società a Responsabilità Limitata) – limited liability company
  • SpA (Società per Azioni) – public limited company
  • SNC (Società in Nome Collettivo) – general partnership
  • SAS (Società in Accomandita Semplice) – limited partnership
  • SAPA (Società in Accomandita per Azioni) – partnership limited by shares

Spain

  • SL (Sociedad Limitada) – limited liability company
  • SA (Sociedad Anónima) – public limited company
  • SLP (Sociedad Limitada Profesional) – professional limited liability company
  • SRL (Sociedad Responsabilidad Limitada Unipersonal) – single-member limited liability company
  • AE (Asociación Empresarial) – business association

Portugal

  • Sociedade por Quotas (Limitada) – private limited company
  • Sociedade Anónima (SA) – public limited company
  • Empresário em Nome Individual (ENI) – sole proprietorship
  • Cooperativa – cooperative
  • Associação – association

Greece

  • EPE (Etaireia Periorismenis Efthynis) – private limited company
  • AE (Anonymi Etaireia) – public limited company
  • OE (Omorio Etaireia) – general partnership
  • EE (Etaireia Epanastatikis) – non-profit association
  • MEPE (Monoprosopi Etaireia Periorismenis Efthynis) – single member private limited company

Belgium

  • BV (Besloten Vennootschap) – private limited company
  • NV (Naamloze Vennootschap) – public limited company
  • VOF (Vennootschap onder Firma) – general partnership
  • Comm. V (Commanditaire Vennootschap) – limited partnership
  • VZW (Vereniging Zonder Winstoogmerk) – non-profit association

Netherlands

  • BV (Besloten Vennootschap) – private limited company
  • NV (Naamloze Vennootschap) – public limited company
  • VOF (Vennootschap onder Firma) – general partnership
  • CV (Commanditaire Vennootschap) – limited partnership
  • Maatschap – professional partnership
  • Stichting – foundation

Full guide on doing business in the Netherlands.

Luxembourg

  • SARL (Société à responsabilité limitée) – limited liability company
  • SA (Société anonyme) – public limited company
  • SCA (Société en commandite par actions) – partnership limited by shares
  • SCS (Société en commandite simple) – limited partnership
  • ASBL (Association sans but lucratif) – non-profit association

Estonia

  • OÜ (Osaühing) – private limited company
  • AS (Aktsiaselts) – public limited company
  • TÜ (Tulundusühistu) – profit-sharing cooperative
  • MTÜ (Mittetulundusühing) – non-profit association
  • FIE (Füüsilisest isikust ettevõtja) – sole proprietorship

Guide on starting a business in Estonia.

Latvia

  • SIA (SabiedrÄ«ba ar ierobežotu atbildÄ«bu) – private limited company
  • AS (AkcionārsabiedrÄ«ba) – public limited company
  • KS (KomandÄ«tsabiedrÄ«ba) – limited partnership
  • PS (PilnsabiedrÄ«ba) – general partnership
  • BiedrÄ«ba (Association)

Guide on starting a business in Latvia.

Lithuania

  • UAB (Uždaroji akcinė bendrovė) – private limited company
  • AB (Akcinė bendrovė) – public limited company
  • MB (Mažoji bendrija) – small partnership
  • VÅ¡Ä® (VieÅ¡oji įstaiga) – public institution
  • IÄ® (Individuali įmonė) – sole proprietorship

Guide on doing business in Lithuania.

Private limited company / limited liability company (Plc/llc)

A private limited company (or its equivalent) is a common type of legal entity in Europe, offering certain benefits and advantages to its owners. The following are some of the main characteristics of a private limited company in Europe:

  1. Limited Liability: A private limited company is a separate legal entity from its owners, which means that the company is responsible for its debts and obligations. The liability of the shareholders is limited to their investment in the company, and their personal assets are not at risk.
  2. Ownership: A private limited company can have one or more shareholders, who own the company and share in its profits. The shares in the company are not publicly traded, and there is usually a restriction on their transfer.
  3. Governance: The management of the company is usually entrusted to a board of directors, who are responsible for the day-to-day operations and strategic decisions. The shareholders of the company usually have the right to appoint and remove members of the board of directors.
  4. Financial Reporting: Private limited companies are required to prepare and file annual financial statements with the relevant authorities. These financial statements must comply with the accounting standards and regulations of the country where the company is registered.
  5. Capital: Private limited companies can raise capital through the issuance of shares, which can be sold to new shareholders or existing shareholders. The company can also borrow money from banks or other lenders.
  6. Taxation: Private limited companies are subject to corporate income tax on their profits. The tax rate and rules may vary depending on the country where the company is registered.

Overall, a private limited company offers its owners limited liability protection and flexibility in terms of ownership and management, while also being subject to certain regulatory requirements and tax obligations.

Public limited company

A public limited company (or its equivalent) is a type of legal entity that is used by businesses in Europe when they intend to raise capital through the sale of shares to the public. Here are some of the main characteristics of a public limited company in Europe:

  1. Ownership: A public limited company can have many shareholders who own shares in the company. Shares in a public limited company are traded on a public stock exchange, and they can be bought and sold by anyone who wants to invest in the company.
  2. Limited liability: Similar to a private limited company, the liability of the shareholders in a public limited company is limited to the amount of their investment in the company. The company itself is a separate legal entity from its owners, and it is responsible for its own debts and obligations.
  3. Governance: Public limited companies are typically managed by a board of directors, which is responsible for making strategic decisions and overseeing the operations of the company. The shareholders of the company have the right to vote on important matters, such as the election of directors or major business decisions.
  4. Disclosure: Public limited companies are required to disclose certain financial and operational information to the public, which includes the company’s financial statements, directors’ report, and auditor’s report. This information is made available to investors and other stakeholders to help them make informed decisions about the company.
  5. Capital: Public limited companies can raise capital by issuing shares

Partnership – general or limited

A partnership is a legal form of business entity where two or more individuals come together to conduct business activities. In European countries, partnerships can generally be categorized into two main types: general partnerships and limited partnerships. While the specific laws and regulations governing partnerships may vary across countries, there are some general characteristics of both types of partnerships that are common throughout Europe.

General Partnerships:

  1. Formation: General partnerships (GPs) are relatively easy to establish, often requiring only a partnership agreement among the partners. Some countries may require registration with the local commercial registry, while others do not.
  2. Liability: In a general partnership, all partners share unlimited personal liability for the partnership’s debts and obligations. This means that each partner’s personal assets are at risk in case the partnership cannot meet its financial obligations.
  3. Management: General partners have equal rights to manage and control the partnership. Each partner can bind the partnership in contracts and make decisions on its behalf. However, the partnership agreement can outline specific roles and responsibilities for each partner.
  4. Profit and Loss Sharing: Profits and losses are usually shared among the partners in proportion to their capital contributions or as outlined in the partnership agreement.
  5. Taxation: In most European countries, general partnerships are considered pass-through entities, meaning that the partnership itself is not subject to taxation. Instead, each partner reports their share of the partnership’s profits and losses on their personal income tax returns.

Limited Partnerships:

  1. Formation: Limited partnerships (LPs) are more complex than general partnerships and typically require registration with the local commercial registry. The partnership agreement must specify the roles of the general and limited partners, as well as the capital contributions of each partner.
  2. Liability: In a limited partnership, there is at least one general partner with unlimited personal liability and one or more limited partners with limited liability. Limited partners’ liability is typically limited to the amount of their capital contribution to the partnership.
  3. Management: Limited partners generally do not participate in the management and control of the partnership. Instead, the general partner(s) are responsible for managing the partnership’s day-to-day operations. Limited partners can lose their limited liability status if they engage in the management of the partnership.
  4. Profit and Loss Sharing: Profits and losses are distributed to the partners based on the partnership agreement. Generally, limited partners receive a return on their investment before the general partners receive any distribution.
  5. Taxation: Like general partnerships, limited partnerships are usually considered pass-through entities for tax purposes. The profits and losses are allocated to the partners, who then report their share on their personal income tax returns.

In conclusion, general partnerships and limited partnerships are two common types of business structures in European countries. General partnerships feature equal management rights and unlimited liability for all partners, while limited partnerships have a combination of general partners with unlimited liability and limited partners with limited liability. The specific legal requirements for forming and managing these partnerships may vary across European countries, but the general characteristics outlined above are applicable throughout the region.

Sole proprietorship (one-man company)

A sole proprietorship is a common business structure in Europe, especially for small businesses and self-employed individuals. Most characteristics are similar to that of the partnership, with the key difference that a sole proprietorship is operated by one individual. While the specific regulations governing sole proprietorships may vary across European countries (for example, special tax deductions in the Netherlands) there are some general characteristics that can be identified.

  1. Formation: Establishing a sole proprietorship is generally simple and requires minimal formalities. In most countries, registration with the local commercial registry or tax authorities is required, and the business owner may need to obtain relevant licenses or permits, depending on the nature of the business.
  2. Ownership: A sole proprietorship is owned and operated by a single individual, who is responsible for all aspects of the business. There are no partners or shareholders involved in this business structure.
  3. Liability: The owner of a sole proprietorship has unlimited personal liability for the business’s debts and obligations. This means that the owner’s personal assets are at risk in case the business cannot meet its financial obligations.
  4. Management and control: The sole proprietor has full control over the management and decision-making of the business. There are no other parties involved in the decision-making process.
  5. Taxation: In most European countries, sole proprietorships are considered pass-through entities for tax purposes. This means that the business’s profits and losses are reported on the owner’s personal income tax return, and the sole proprietorship itself is not subject to separate business taxes. Depending on the country, the owner may need to pay social security contributions and value-added tax (VAT) if the business’s turnover exceeds a certain threshold.
  6. Continuity: The existence of a sole proprietorship is closely tied to its owner. The business ceases to exist upon the owner’s death or incapacity, and the owner cannot transfer the business as a legal entity. However, the assets of the business may be sold or transferred to another person who can then establish their own sole proprietorship.
  7. Ease of dissolution: Dissolving a sole proprietorship is generally straightforward, as the business and its owner are considered a single legal entity. The owner needs to settle any outstanding debts, notify relevant authorities, and complete any required deregistration procedures.

In summary, sole proprietorships in Europe are characterized by their simplicity, ease of formation, and complete control by the owner. However, the owner faces unlimited personal liability and the business has limited continuity. While the specifics of forming and operating a sole proprietorship may vary across European countries, these general characteristics are common throughout the region.

Foundation

A foundation is a distinct type of legal entity in many European countries, established to serve a specific purpose, often charitable, educational, or social. Foundations are recognized under civil law and are regulated differently across the region. However, there are some general characteristics that are commonly associated with foundations in Europe.

  1. Purpose: Foundations are usually established to fulfill a specific purpose, such as promoting education, scientific research, healthcare, social welfare, or cultural activities. Unlike corporations, foundations do not engage in profit-seeking business activities.
  2. Establishment: To create a foundation, a founder (which can be an individual or a legal entity) typically drafts a foundation charter or deed, outlining the foundation’s purpose, governance structure, and initial endowment. The foundation must be registered with the relevant authorities, such as a commercial or foundation registry, depending on the country’s requirements.
  3. Endowment: A foundation is funded through an initial endowment provided by the founder, which may consist of financial assets, real estate, or other property. This endowment is meant to provide the financial resources necessary for the foundation to fulfill its purpose. Additional donations or grants can also be received from external sources, but the foundation cannot engage in profit-seeking business activities.
  4. Legal personality: Foundations possess legal personality, which means they can enter into contracts, hold property, and sue or be sued in their own name. They are separate from their founders, board members, and beneficiaries, with their own rights and obligations.
  5. Governance: Foundations are typically governed by a board or a similar governing body, which is responsible for overseeing the foundation’s activities, ensuring that its purpose is fulfilled, and managing its assets. The board members are appointed according to the foundation charter or deed and may include representatives of the founder, experts in the foundation’s area of focus, or other stakeholders. In some countries, foundations may be subject to supervision by public authorities to ensure compliance with legal and regulatory requirements.
  6. Accountability and transparency: Foundations are required to maintain financial records and report their activities to the relevant authorities, depending on the country’s legal framework. This may include annual financial statements, activity reports, and external audits. Foundations must also comply with any applicable tax and regulatory requirements.
  7. Taxation: Foundations in European countries often benefit from special tax treatment, such as tax exemptions or reduced rates, particularly when they serve charitable or public benefit purposes. However, tax regulations and eligibility for tax benefits vary across countries, and foundations must comply with the specific requirements of their jurisdiction.

In summary, foundations in European countries are legal entities established to fulfill a specific purpose, often related to public benefit or charitable activities. They are funded through an initial endowment and governed by a board, and they possess legal personality. Foundations are subject to varying degrees of regulation and reporting requirements, and they often benefit from special tax treatment. The specific legal requirements and characteristics of foundations may vary across European countries, but the general principles outlined above apply throughout the region.

Advice on legal entities in Europe

It is important to note that the type of legal entity you choose will depend on your business needs, goals, and circumstances. It is recommended to seek professional advice before choosing a legal entity.

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