The joint stock company is a type of legal entity generally suited for larger corporations and one that has a larger share capital than the private limited liability company. It is a widely-recognized business form and it can also be incorporated by investors who wish to open a medium-sized business, provided that the larger capital is not an impediment. It is a business form that has the highest degree of credibility and also the highest compliance requirements in terms of accounting and audit, particularly because of its characteristics.
Investors who open a joint stock company in Liechtenstein need to observe the requirements for this particular business type.
Our lawyers in Liechtenstein describe the main characteristics of the joint stock company in Liechtenstein as well as the requirements for its formation. Our team can assist investors who are interested in opening this particular business form.
We also invite you to watch the following video about this type of company:
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The characteristics of the joint stock company
The joint stock company, or the public limited company, the Aktiengesellschaft, A.G. is a commonly used type of legal entity, especially by larger companies and by those that want to list on a Stock Exchange.
Below, we list the main characteristics of this business form:
- • Limited liability: like in the case of the private limited liability company, the founders of the joint stock in Liechtenstein are only liable to their investment made in the company.
- • Name: the name of the company is required to include the abbreviation for the chosen business form, in this case A.G.
- • Shares: a joint stock company in Liechtenstein can issue registered and bearer shares.
- • Management: the joint stock is required to have at least one director and two shareholder who can be both natural and legal persons.
The fact that the founders are only liable up to the extent of their invested capital is an important advantage for many investors. The company is a legal entity, it enters into agreements in its own name, it can sue and be sued by third parties. There are requirements as per the nationality of the director, and one of our attorneys in Liechtenstein can detail these residency requirements.
Requirements for opening a joint stock company in Liechtenstein
The joint stock company is subject to different requirements compared to the private limited liability company, especially in terms of initial capital. Our team of lawyers in Liechtenstein lists these below:
- Minimum capital: The joint stock company can be incorporated with a minimum registered capital of 50,000 CHF that is paid in full when the registration takes place.
- Unique name: the name of the company not only needs to contain the abbreviation but it also needs to be a unique one that does not infringe any existing ones.
- Mandatory registration: the application for company registration is submitted with the Commercial Register and the company will be able to conduct business activities as soon as this registration is complete.
- Bank account: the company is required to have a corporate bank account opened with a local bank; here the share capital will be deposited.
- Fees: investors should know that there are several fees applicable upon the registration of a joint stock company; these can amount to approximately 700 CHF (please keep in mind that this is not a final amount).
The capital of the company is divided into shares and the types of shares and their allotment may be described in the Articles of Association. These are the company’s constitutive documents that will include information about the company (name, type, duration), its founders (the names of the shareholders and directors), its scope (the business activities in which it will be involved, according to classification codes), the types of shares issued for its shareholders, the management principles, the dismissal of company directors as well as other details.
One of our lawyers in Liechtenstein can assist you during the registration phase as well as with the preparation of the company’s constitutive documents.
A joint stock company is to be governed in a certain manner and proper organization can be a key to the success of the business. The AG will need to have a supreme corporate body, which gathers at least once a year for a general meeting. The purpose of this meeting is to approve the annual accounts as well as handle other matters, as stipulated in the Articles of Association.
Investors should know that companies in Liechtenstein, such as the AG as well as GmbH, are required to apply for special licenses or submit special documents upon incorporation. This applies to the financial services industry, for activities such as banking, insurance, companies in the securities and markets division. For these, entrepreneurs will need to follow the guidelines set forth by the Financial Market Authority. Investors who wish to open an investment firm or set up a trust or an investment fund in Liechtenstein can reach out to our team of attorneys in Liechtenstein for more information.
The taxation of a joint stock company in Liechtenstein
The AG is subject to the taxation principles in Liechtenstein. Companies incorporated in the country, that have their legal seat or place of management in the jurisdiction are considered tax residents – they are taxed on their worldwide income.
The corporate income tax rate in Liechtenstein is 12.5% and a minimum tax of CHF 1,800 can apply for small businesses. As the AG is more suited to larger ones, this lower tax is not usually applicable to this business form. Liechtenstein does not impose a withholding tax on dividends, interest, and royalties. A tax of 12% does apply to the remuneration of board members, including for AG companies. In those cases in which the board members have a remuneration that is higher than 200,000 CHF, the tax liability is unrestricted.
AG companies are expected to observe the filing requirements and submit the tax return by July 1 the following year. The tax payments are due by the end of August the following tax year.
Investors can reach out to the tax experts at our law firm in Liechtenstein for more details about the general taxation regime.
According to a report from the Office of Statistics, the following figures applied to the number and types of companies in 2016 in Liechtenstein:
- – 3,871: the number of companies in the services sector;
- – 593: companies in the industry sector;
- – 103: companies in agriculture;
- – out of the number of companies, 0.4% were large ones, 2.0% were medium-sized ones, 9.7% were small and 87.9% were micro-companies.
- – as per the number of employees, 4,025 companies had between 1 and 9, 438 had between 10 and 49 employees and 87 companies had 50 to 249 employees.
- – the strongest business sectors were the financial and services sector.
Contact us for more information on company formation as well as complete legal assistance for opening a joint stock company or another type of business entity.