• Davit Amiryan

LLC vs. JSC, which one is right for you?

Whenever you decide to start a business in Armenia, the first step would be setting up a company. The business structure you choose, significantly impacts some important issues of your business. Your choice of corporate structure can also substantially affect such issues, as financing and future growth of the business, number of shareholders, general manner, in which the business is operated, etc.

In this note, we will speak about some aspects of Limited Liability Companies (LLC) and Joint Stock Companies (JSC), which are usually the type of legal formation, which entrepreneurs are choosing.

The following key points shall be considered before choosing legal type of your business: process of registration, maintenance, number of shareholders, capital raising instruments, classes of shares and management.

Both types of legal entities have the same level of corporate assets protection and limitation of liability.

Speaking of Joint Stock Companies, such organizations should be in the form of Open Joint Stock Companies (OJSC) or Closed Joint Stock Companies (CJSC).

In the chart below, you can see the differences of Limited Liability company and Joint stock companies:

Of course, there are other differences between forms of legal entities, but those are the core differences, you should consider while running your business.

However, if you have formed an LLC and you feel that you need to change the form, it is fully permissible to change the form of your entity from LLC to JSC and vice versa.

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