Business Registration and Types
Business Registration and Types

 

Business Entry One-stop-shop has been operating in Armenia since 2011 within the Ministry of Justice. Companies and individual entrepreneurs can simultaneously obtain the name reservation, business registration, and tax identification number at a single location. Electronic registration is also available at www.e-register.am, for which an electronic signature is required. Registration of commercial entities is made immediately if documents are submitted electronically or if approved templates of the required documents are used. In other cases, it may take up to 2 working days.

There are the following legal options for establishing a business (commercial activities) in the Republic of Armenia:

INDIVIDUAL ENTREPRENEURSHIP 

Individual entrepreneurship is the simplest form of corporate organization. It represents a commercial entity owned and managed by only one person. A citizen has the right to engage in entrepreneurial activity without the formation of a legal person upon registration as a private entrepreneur. Private entrepreneurs are liable for their obligations with all personal property belonging to them which means the citizen is personally responsible for any liabilities arising from commercial activities.  

LIMITED LIABILITY COMPANY 

Limited Liability Company is the most common corporate form in Armenia. It is a company founded by one or more persons whose charter capital is divided into shares in ownership of amounts determined by the charter. The participants in a limited liability company are not liable for their obligations; they bear the risk of losses connected with the activity of the company within the limits of the value of the contributions made by them. The profits are divided between founders according to the stipulations in the charter.

JOINT-STOCK COMPANY 

A joint-stock company is a legal entity whose charter capital is divided into a defined number of shares of stock. The founders have established the nominal value of the shares. Their liability is limited to the value of their possessed share. The open joint-stock company is different from the close one having stocks available for sale to the public. The closed JSC functions the same as a regular JSC, having a capital divided among shareholders, with a determined nominal value per share and limited liability for each shareholder.

PARTNERSHIP

A partnership may be registered as an independent legal entity or constituted as an agreement between the partners. In general, partnerships are less regulated and offer greater flexibility. Unlike an LLC or a JSC where the company is managed by a single director, a partnership can be actively managed by several partners.
You can create a full partnership or a limited partnership. General partners are personally liable for the debts of the business, whereas the limited partners are passive investors who cannot lose more than their investment. A contractual partnership is not subject to registration, however, the tax office must be notified of its establishment.

COOPERATIVE

A cooperative is a voluntary amalgamation of citizens and legal entities on the basis of membership in order to meet the financial and other needs of the participants, an amalgamation realized by the combining of property participatory share contributions by its members.

BRANCH OF FOREIGN COMPANY 

A Branch of Foreign Company is a territorial subdivision of a foreign company in Armenia. A foreign company can choose between several options to enter the Armenian market. It is possible to set up a subsidiary - a separate legal entity (e.g. LLC or JSC) that is wholly or partly owned by the foreign company. The foreign company may also decide to carry out commercial activities in Armenia through a branch office. 

NON-PROFIT ORGANIZATION

Non-profit organizations are voluntary amalgamations of citizens who have joined in the manner provided by a statute on the basis of the commonality of their interests to satisfy spiritual or other non-material needs. Property transferred to the organization by its founders or participants is the property of the societal amalgamation. The organization shall use this property for the purposes defined in its charter.
In Armenia, non-profit organizations are normally established in the form of a foundation or a public association. A public association is a membership-based organization, which primarily caters to the needs of its members. Foundations do not have members and focus primarily on funding charitable projects that benefit certain classes of people or society at large. Both foundations and public associations can directly engage in business activities.

PRIVATE EQUITY FUND 

A private equity fund is an entity used for making investments in real estate, securities, and other assets. A private equity fund is registered by the Central Bank of Armenia and has substantial tax benefits.