Blog Entrepreneurship: PE or LLC?

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Entrepreneurship: PE or LLC?

735 / 2020-03-18 / KMG

Persons initiating an entrepreneurial activity are always interested which status is most beneficial, whether to register as a PE or an LLC.

The main difference is the scope of responsibility. In the case of a PE, the individual is responsible for the liabilities of the PE with all his assets, while the founders of a LLC bear no personal responsibility for its liabilities (and vice versa), and liabilities is in fact limited to the extent of their contribution to the capital of the LLC.

The LLC is liable for its liabilities solely with the assets owned by the company. In terms of taxation systems, there is no difference between carrying out an entrepreneurial activity as a PE or an LLC. In terms of accounting, the PE is relatively simpler with a smaller volume of documentation. If several persons intend to carry out joint entrepreneurship, a legal entity – an LLC or a joint stock company (closed or open depending on the number of founders) – has to be registered.