Everything related to services for establishing individual companies

 Establishing individual companies. Establishing a sole proprietorship is a dream of many ambitious young people who seek to achieve financial independence and achieve their ambitions. Individual companies allow owners greater freedom to manage their business and control its course, while they are easy to establish and manage compared to other types of companies, but despite It is easy to establish individual companies, but it requires a careful understanding of the legal requirements and procedures followed. In this article, we will provide you with a comprehensive guide on establishing individual companies in Egypt, and highlight the basic steps to successfully start your business journey.

Types of sole proprietorships

Before starting to talk about the services of establishing individual companies, we must clarify the types of individual companies that are considered the most common and widespread in the world, due to the ease of establishing them and the advantages they provide that suit people who want to work independently, which are as follows:

Sole Proprietorship

It is the simplest and oldest type of sole proprietorship, in which the business owner works alone, has all management powers, and bears all risks and profits.

Advantages of sole proprietorship: Ease of establishment and management, low establishment cost, faster decisions as they are made by the individual owner only. 

Disadvantages of sole proprietorship include unlimited personal liability, difficulty in raising capital, and the potential for business collapse in the absence of the owner. 

Simple partnership 

It is a type of company in which two or more people agree to share profits, losses and risks. Partnerships can be written or oral. 

Advantages of a simple partnership: Distribution of risks and responsibilities among partners, ease of raising capital, and diversity of skills and experiences among partners. 

Disadvantages of a simple partnership include unlimited joint liability, difficulty in making decisions when there are different opinions, and the possibility of disputes between partners. 

One person company

This type of company allows individuals to establish a company personally without the need for partners, but the owner's liability is limited only to the capital invested in the company. 

Advantages of a one-person company: limited liability, ease of establishment and management, protection of personal assets from business debts.

Disadvantages of a one-person company The cost of incorporation may be higher compared to a sole proprietorship, and you may face difficulties in raising capital.

Conclusion: The types of sole proprietorships vary in advantages and disadvantages based on the nature of the business and personal goals, so it is preferable to review the local laws and regulations related to establishing these companies and choose the type that suits your needs and business goals.

See also: Information of interest to you about the sole proprietorship

What is meant by establishing individual companies?

It is a type of company that is owned and managed by only one person, who is personally responsible for all its financial and legal obligations.

 In fact, individual companies are characterized by ease of establishment and management. Establishing an individual company does not require many complicated procedures or expensive fees, and its management is characterized by greater simplicity and flexibility.

Individual companies also provide greater control to the owner, as the owner of the individual company has complete freedom to make decisions related to the company and direct its course without the need for approval from other partners.

Likewise, the liability of an individual company owner is limited to his personal funds invested in the company, and does not extend to his other personal property.

On the other hand, the individual company owner may obtain some tax benefits provided by the state to stimulate entrepreneurship.

What are the services of establishing individual companies from law firms?

There are many services for establishing individual companies from law firms, and they provide you with the legal and administrative support you need. We will explain the comprehensive services that law firms can provide below:

Initial legal advice

Before starting the incorporation process, lawyers provide a consultation session to understand your needs and the requirements of your business project. This session helps you determine the appropriate structure for your company and understand the required legal obligations.

Choosing the right legal entity

Law firms help you determine the most appropriate legal entity for your business, whether it is a sole proprietorship, limited liability company, or partnership, so the right choice reduces risks and increases the chances of success.

Preparing and submitting legal documents

Law firms assist in preparing the necessary documents for establishing the company, such as the articles of association and bylaws, and submit them to the relevant government agencies to ensure full compliance with local laws.

Licenses and Permits 

Submitting applications for the necessary licenses to practice the commercial activity, as lawyers follow up with the relevant authorities to ensure obtaining the licenses as quickly as possible.

Trademark Registration 

If you want to protect your company name or any other brand, law firms can help you with the trademark registration process and ensure intellectual property rights.

Taxes and Finance

 Law firms provide tax advice that helps you understand your financial obligations and possible taxes, and helps you register your company with local tax authorities.

Preparing contracts and agreements

Preparing the legal contracts your company needs, whether they are employee, customer or partner contracts, and these contracts are sound, enforceable and protect your interests.

Legal Compliance and Follow-up

Law firms provide follow-up services to ensure your company is in compliance with all laws and regulations, including submitting periodic reports and updating legal documents when needed. 

Ongoing legal advice

After establishing the company, you need to maintain compliance and keep the business running smoothly, so lawyers provide ongoing legal advice to help you face any legal or administrative challenges. 

Establishing a sole proprietorship can be a complex process, but using the services of a law firm makes it simpler and safer, through integrated legal and administrative support, so make sure to choose a law firm with a good reputation and extensive experience in establishing companies, to ensure that you get the best possible service.

See also: Security inquiries on some commercial activities

What are the steps for establishing individual companies?

Below are the most important steps required to establish individual companies:

• Distinctive name: Choose a unique name that will catch the eye and distinguish your company from others.
• Commercial Record: Obtain your commercial register through the Chamber of Commerce or easily through the Egyptian government’s electronic portal.
  •  You can seek help from Diwan Company, which is considered one of the most famous companies that provides company incorporation services, and handles all matters related to incorporation and post-incorporation. 
• Tax card: Obtain your tax card from the Egyptian Tax Authority to be prepared to submit your tax obligations, and Diwan Company can likewise provide it to you The best company establishment lawyer in Egypt This service is through the authorization of one of the chartered accountants who works within Diwan Company.
  •  And specialists in everything related to accounting and obtaining important papers such as the tax register, tax card, and the like. 
• Necessary approvals: Make sure to obtain any special approvals that may be required by the nature of your business activity. Diwan Company provides you with this service and obtains all licenses, completes all paperwork, and completes all legal papers.
• Bank account: Open a business bank account in your company's name for easy management of financial transactions.

See also: Learn about the most important steps in establishing an online company

 Official documents required to establish individual companies

Of course, establishing any company requires several important documents that must be submitted to the competent authorities such as the Ministry of Trade and Industry, the Egyptian Tax Authority, the Commercial Registry, and the like. The following are the most important documents required to establish individual companies:

• Valid ID card: The company owner’s ID card must be valid when submitting the incorporation application, and a copy of the original ID card must be present. The original must be viewed and then the copy included with the required documents.
• Company incorporation contract: The Memorandum of Association is an official document that specifies the company’s name, activity, capital, and details of its partners.
• Company incorporation application form: The application form can be obtained from Investment Authority or through the Egyptian government’s electronic portal.
• Incorporation fee payment receipt: You could Pay the incorporation fees through the General Investment Authority’s electronic portal.
• Certificate of non-ambiguity of trade name: andThis certificate is issued by the General Investment Authority to ensure that there is no name similar to the name of your company.
• Tax card: The company owner must obtain a tax card from the Egyptian Tax Authority.
• Special approvals (if any): Some commercial activities may require obtaining special approvals from the relevant authorities.

It is worth noting that you can entrust Diwan Company to prepare all the documents required above, in addition to providing you with several other services such as:

• Controlling your company's general budget matters.
• Follow up on the tax status of your company, and submit tax returns on time after preparing them.
• Not only that, it handles all your company's accounting affairs, but it can also nominate for you a selection of the best job cadres in the field of accounting to fill the accounting departments in your company.
• Providing marketing services for your company.
• Conduct excellent feasibility studies for the nature of the business you practice. 

For more information about establishing individual companies and the services provided by Diwan Company, you can contact the official website of DiwanDiwan Firm.

What are the fees for establishing individual companies?

After we learned about the most important documents and steps required to establish individual companies in Egypt, we will now discuss the fees for establishing individual companies as stated in accordance with... Provisions of Investment Law No. 72 of 2017 As follows:

• An amount of 205 Egyptian pounds is submitted to the General Authority for Investment as fees, in the event that the capital reaches 100 thousand pounds or less. However, in the event that the capital exceeds 100 thousand pounds, the value of the fees in that case is 505 Egyptian pounds.
• An amount of 305 Egyptian pounds for the fees for establishing individual companies.
• The value of 2% of the total capital amount is paid to the General Federation of Chambers of Commerce for the annual subscription, with the minimum amount being 129 Egyptian pounds, while the maximum amount is 2105 Egyptian pounds.
• Some additional fees that are paid to the General Authority for Export and Import Control are paid only by real estate companies, or advertising companies, and are estimated at approximately 2,835 Egyptian pounds.
• An amount of 64 Egyptian pounds is paid as fees to the commercial registry for registering your company.

Read also: Tasks and factors for choosing a lawyer to establish companies in Egypt

Is it possible to establish a sole proprietorship without a headquarters? 

Some people wonder about the possibility of establishing an individual company without a headquarters?? Actually, no, it is not possible to establish a sole proprietorship in Egypt without a headquarters, which includes the following: 

• Solidarity companies.
• Simple recommendation companies. 
• Individual establishment.

 This is in accordance with the law regarding the establishment of Egyptian individual companies, but financial companies can (Single person companies, joint stock companies, limited liability companies) To establish a company without a headquarters, In fact, establishing financial companies without a headquarters includes several exemptions, including, for example:

• •  Exemption from guarantees.
  •  Exemption from license fees.

•  Exemption from having a commercial register.

• Exemption from tax costs related to the incorporation process.

But these exemptions include the first year only, and this law also stipulates that foreign companies can establish financial companies with a legal background, or even establish a branch in Egypt without a headquarters., as long as all legal procedures are met.

Some may wonder how to establish financial companies without a headquarters? In fact, this is done purely electronically via an electronic platform (the General Authority for Investment platform), which was created to record customer data and pay company fees.

However, the company owner must adhere to all instructions and directives regarding establishing digital money companies to avoid any obstacles or problems that may arise for the company owner.

Challenges Facing Sole Proprietorships

Individual companies face many challenges that may affect their success and sustainability. However, these challenges can be overcome through good planning and appropriate strategies such as the following:

Financing and liquidity pressure

One of the biggest challenges facing sole proprietorships is obtaining sufficient funding to launch and maintain the project, which is a real obstacle, especially in the early stages.

Solutions: Resort to personal financing and use personal savings as a start, or request bank loans from financial institutions.

The liquidity problem can be solved by finding investors who will contribute capital in exchange for a stake in the project, and another solution is to use crowdfunding platforms to raise funds quickly and efficiently.

Time management and multitasking

Many sole proprietors feel pressured by time as they juggle multiple responsibilities including marketing, sales, operations management, and finance.

Solutions: Careful scheduling and using time management tools like Trello and Slack to organize tasks. 

Another solution is to delegate tasks, where it is recommended to hire employees or contract with freelancers to perform routine tasks, or use technological tools to automate repetitive tasks such as responding to emails.

Market competition

Individual companies can face intense competition from larger companies with greater resources.

Solutions: Research and analysis by studying the market and competitors in depth to understand strengths and weaknesses.

Hence, a competitive advantage must be built by offering unique products or services, while using digital marketing to use digital marketing strategies such as search engine optimization (SEO) and paid advertising on social networks to reach the target audience.

Economic and political fluctuations 

Economic and political changes can negatively impact businesses and increase the level of risk.

Solutions: Financial planning involves building a sound financial plan that takes into account potential changes, diversifying production lines and services to reduce dependence on one sector, and establishing partnerships with other companies to enhance financial stability.

Access to technology 

Technological innovation can be expensive, complex and a barrier to entry for small businesses.

Solutions: Take advantage of existing technology and use available tools and applications such as Google Workspace and Zoom.

In addition, it is recommended to invest in educating yourself and your employees about new technology, and to use software as a service (SaaS) that provides economical and integrated solutions for businesses.

Bureaucracy and legislation

Obtaining licenses and complying with legislation can be a source of inconvenience and delay.

Solutions: Take advantage of legal advice and contract with legal consultants to help understand and apply legislation. In addition, it is recommended to apply digital tools to manage documents and compliance effectively.

Expansion and growth 

Expansion can be a daunting task due to financing, operational and logistical challenges.

Solutions: Planning growth strategies with detailed expansion plans that include goals, timelines, and budgets. Strategic partnerships for growth and expansion can also be sought more easily.

In conclusion, at the end of our article in which we discussed the establishment of individual companies, it can be said that the establishment of individual companies has witnessed a noticeable increase in recent times, due to the ease and flexibility it provides in procedures and costs. You can seek assistance from Diwan Company to provide company establishment services, as we mentioned, to facilitate all procedures for you. Diwan Company has received the satisfaction of more than 1,453 clients, as it has 13 years of experience in the field of establishing individual companies in Egypt.