To analyse what are the main legal requirements to
create your company. To review general formalities involved, where you can get assistance
and updated information at European Level.
Union is aware of the difficulties across all member states when entrepreneurs
wish to create their companies. Recent Commission Communications and strategies
have unveiled all these mismatches such as regulatory burdens that
entrepreneurs must face from the beginning of their project, red tape that
affect directly to microenterprises in their daily operations and so on. Member
states have been invited amid other actions to “reduce time for licensing and
other authorisations necessary to start a business to one month”. Progress has
been made in some countries, but more efforts need to be put in place to
achieve this goal.
as fulfilling all legal requirements is the strategic decision on how your idea
is going to see the light in the market, this is, is going to be legally
constituted. Several alternatives are at your disposal, from Limited Company to
sole trader alongside social economy. We will deal with the factors you might
take into consideration when selecting your option.
One of this
option is, at European Level, the European Company, introduced in 2004 that
aims to unleash the potential of the Single Market for companies with activity
in more than one EU country. We will review its main tenets so that you get
acquainted with this type of company.
please be aware that in most of the issues concerning legal requirements for
the creation of a company and therefore in this training fiche, rules do not
apply to all member states. In fact, current regulation related to this topic
is not harmonised. Thus, you will have to search at national contact points to
check out for specific national legislation.
Our main interest with this training
fiche is that you can have an overview of the basic legal requirements around
Europe you need to fulfil if you are thinking of starting a Company. As we are
aware that within this short space we cannot provide a complete information on
this matter, our aim is as well, to provide the leads and contact information
in case you need to know the requirements in detail.
Member states and the European Union
have acknowledged the need to reduce and facilitate the legal requirements for
starting a business. They are aware of the critical role that SMEs play in the
economic growth and employment generation all throughout Europe. The Commission
together with member states are monitoring start up time costs at national
level. As a summary for the OER Craft partners’ countries this is the
information on these two questions from an study on compliance by Member States
on the time needed to get licences and permits to take up and perform the
specific activity of an enterprise (2014):
You have decided to take your business idea forward and create a company. If
this is the case, you have fulfilled the different steps we have talked about
in this training fiche on basic legal requirements.
taken on board the different options with regards your business structure, such
as if you are going on your own, sole trader, or you are accompanied by other
partners. You must be aware of the implications of the choices you make to this
respect, in terms of, among others, your responsibility on the business debts.
before starting your operations, you have registered for the appropriate Social
Security Scheme as part of your legal status and have applied for the required
license if that is the case for your business activity.
Tax and accounts you have your systems in place and you have made the necessary
communication to the Tax Administration in charge. In relation to keeping your
accounts, the EU encourage member states for micro companies to apply simple
rules. Micro companies to this respect are those which have less than 10
workers with a balance sheet below 350.000 € and a net turnover below 700.000
As we are dealing with crafts and
cultural and creative industries, it is paramount to take into consideration
the protection of your trademarks, copyrights and patents. We have dedicated a
training fiche to these purposes. We encourage you to have a closer look to
Another aspect you should take into
account is whether you need an insurance or not for the development of your
business operations. There are some insurances that the law demands you have,
and others which you should take out as a matter of your own protection. Again,
it depends on the type of your activity. In some cases, it can also be a legal
For further information and follow ups for specific member situations please log on to:
It is quite advisable to have a look at http://ec.europa.eu/internal_market/eu-go/index_en.htm , where you will find the Points of Single Contacts in each member country.
Information on cross – border VAT stems from the Your Europe Portal at http://europa.eu/youreurope/business/vat-customs/cross-border/index_en.htm
Study on compliance by Member States on the time needed to get licences and permits to take up and perform the specific activity of an enterprise.
If you wish to get further information on the European Company characteristics, pay a visit to http://ec.europa.eu/internal_market/company/societas-europaea/basics/index_en.htm
Entrepreneurship 2020 Action Plan, reigniting the entrepreneurial spirit in Europe
Find out the literature behind OER-CRAFT Project which aims at addressing the capacity and training needs of the micro enterprises across EU.