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Do you want to start a business but don't know the most convenient way to register?
17 Oct

Do you want to start a business but don't know the most convenient way to register?

After shaping your business idea you should take the steps towards its formality. In order to be engaged in a business (entrepreneurship) activity in the territory of the Azerbaijan Republic, you need to register at a relevant tax institution and get a Tax Payer Identification Number first (TPIN).

TPIN is an individual and a unique number allowing you or the company you’ve established to realize an entrepreneurship activity (as same as the Identification Number of a Citizen). Using this number you can carry out tax payments and other operations in the future.

You may follow one of the below-mentioned options to get a TPIN and to start a business activity:

1) A physical entity may be engaged in business activity by being registered as an entrepreneur and provided with a TPIN. Its privilege is that the TPIN is provided in 1 business day after your official application.

The negative side of this option is that the TPIN is tied to your name and when you carry out a business activity you will be personally responsible for any obligation, which may occur during your business activity. The demand, in this case, may be put on your property.

2) You may be engaged in an entrepreneurship activity by establishing a company (legal entity) and getting a TPIN. According to the Civil Code of the Azerbaijan Republic, there are several types of legal entities. For example, Limited Liability Company, Open Joint Stock Company, cooperative and etc.

The most convenient option for new business starters is to establish an LLC which is comparatively easier and is carried out within 2 days after the documents are submitted to the tax authority.

The privilege of starting an entrepreneurship activity by establishing an LLC is that you are not liable for LLC obligations as a founder (Article 87 of the Civil Code of the Azerbaijan Republic). For example, the LLC you own (have founded), fails to fulfill the terms of the contract and incurs a debt in the amount of 10000 (ten thousand) manat. This debt may be put on money or the property, which belongs to the LLC. It means that as a founder you don’t carry any responsibility for your company’s debt with your personal property.

Thus, taking into account the convenience of the establishment process, the degree of the responsibility of its founder, and the relevance to the modern market economy, it is advised to start the commercial activity by establishing an LLC.

 

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