What legal form should you choose for your new company?

The company's form. Naturally, you will need to think about which legal form to open it in. In Kazakhstan, for example, the most common form is the limited liability partnership (LLP). Since a startup aims to generate income, you should accordingly consider commercial legal forms. A limited liability partnership is one such form. You can also consider a joint-stock company (JSC). Legally, of course, it will be a little more complicated.

You can also look at the jurisdiction of the Astana International Financial Centre (AIFC), where you can open a company in the form of a private company. In each of these three cases, it should be noted that you will be liable only to the extent of your contribution. With all these forms, it should be noted that it will be easier for you to do business and talk to investors when you have a legal form that is clear and understandable to investors. If you are raising foreign investors, it will most likely be better to open the business in the Astana International Financial Centre.

If, however, your investors are local, domestic investors, then we accordingly suggest opening your company in the form of a limited liability partnership or a joint-stock company. Setting up a company in the Astana International Financial Centre can be advantageous not only for attracting foreign investors but also for certain types of activity. For example, your company can apply a special tax regime. You can also set up a company under Kazakhstan's jurisdiction and register with Astana Hub if your company operates in IT.

Then, accordingly, if your activity falls within a certain list, you can apply tax benefits. The Astana International Financial Centre has its own law in force, which is based on the principles of the law of England and Wales and of the leading international financial centres. Choosing a legal form is a rather important question. You will need to divide liability among the co-founders if you have several of them. You will also need to put decision-making in the company in order, so that there are no conflicts and no so-called deadlock situations, when one person who owns 50% of the company supports one decision and another person who owns the remaining 50% supports another.

Accordingly, you need to anticipate such situations, and it is advisable to divide the shares in such an order or proportion that no situations arise that would harm the business. Naturally, you will need to consider the scalability of your business idea and attracting investors. All these points need to be taken into account, and this question is one of the most important for a startup.