ADVANTAGES

DISADVANTAGES

Sole Proprietorship

• No minimum capital requirement from start;
• Simple incorporation procedure;
• Low incorporation cost;
• Gradual shift from informal to formal sector;
• Less restrictive operations method

• Unlimited responsibility for all losses and debts (No legal distinction between the owner and the business);
• Low credibility with partners (banks, suppliers, customers ...)
• Difficult to get loan

Limited Liability Company (LLC)

• Minimum capital requirement per share is GNF 100,000;
• Limited liability (partners are liable up to their contributions);
• Simple and more flexible bylaws
• Less risk to be stolen by fire-sale acquisitions (more protection against hungry investors );
• Business uninterrupted even in case of death of one of the shareholders (except contrary provisions in the bylaws);
• Upgradeable to other forms of business;
• Partners involved in making major decisions.

• Formality of operations;
• Formality of incorporation;
• Relatively high incorporation and running expenses;
• Unsuitable for some very important activities;

Corporation (LTD)

•  Very credible to third party
• High capacity to mobilize funds (public offering possible);
• Limited liability (shareholders are liable only up to their contributions)
• Ability to pay up only a quarter of the share capital (cash contributions);
• Ability for the Chairman of the Board, Managing Director (or Director) to obtain a social protection scheme for the employees (irrespective of the number of shares owned);
• Ability to freely transfer shares (except for a prior approval clause in the bylaws)

• Minimum share capital remains high
• Relatively high incorporation and running expenses;
• Cumbersome administrative procedures (The Board or Auditors in some cases).

Economic Interest Group(EIG)

• EIG can be created without a starting capital
• Flexible incorporation formalities
• Flexibility in the organization and running

• EIG's exclusive aim is to implement, for a fixed term, all necessary means to facilitate or develop the economic activities of its members, improve or increase the results of such activities
• Low credibility with third party, especially banks
• Members of EIG are jointly liable for debts owed by the EIG.