LLC vs Ltd vs GmbH vs Pte Ltd — Structure Comparison

Why the same concept has different names in every country

The private limited company — a company with limited liability, shares, and a separate legal identity from its owners — exists in virtually every country on earth. But each country created its own version, with its own name, its own capital requirements, and its own governance rules.

This chapter maps the equivalents across major jurisdictions and explains what the structural differences actually mean for founders.

The core concept

Regardless of what it's called, a private limited company has these fundamental characteristics:

1. 1Separate legal personality: The company is a legal person distinct from its owners. It can own property, sign contracts, sue, and be sued.
2. 2Limited liability: The shareholders' personal liability is limited to their investment in the company. Personal assets are generally protected from company creditors (with exceptions for fraud, personal guarantees, etc.).
3. 3Shares: Ownership is divided into shares. Shares can be transferred (subject to restrictions in private companies).
4. 4Directors: The company is managed by directors, who are separate from shareholders (though often the same people in small companies).
5. 5Perpetual existence: The company continues to exist even if ownership changes, unless it is formally dissolved.

The structures by jurisdiction

United Kingdom — Private Limited Company (Ltd)

Governing law: Companies Act 2006 Regulator: Companies House Minimum capital: £1 (one share of £1) Directors: Minimum 1; no nationality or residency requirement; must be 16+ Shareholders: 1 to unlimited; no nationality or residency requirement Secretary: Not mandatory for private companies (was mandatory until 2008) Annual filing: Confirmation Statement (£34/year) + annual accounts (due 9 months after financial year end) Corporation Tax: 19% on profits up to £50,000 (small profits rate); 25% on profits above £250,000; marginal relief between £50,000–£250,000

Key features:

• World's fastest setup — registration in 24 hours via Companies House online portal
• All company information (directors, shareholders, registered address, accounts) is publicly visible at Companies House
• PSC Register (Persons with Significant Control) requires disclosure of anyone owning more than 25% of shares
• No audit requirement for companies below the audit threshold (turnover ≤ £10.2M, balance sheet ≤ £5.1M, employees ≤ 50 — two of three must apply for two consecutive years)
• Accounts can be filed as "micro" (simplified) if the company qualifies

Who it's for: Any size of business. The UK Ltd is the world's most internationally recognisable private company structure. Used by solo freelancers and major multinationals alike.

United States — Limited Liability Company (LLC)

Note: The LLC is not technically equivalent to a private limited company — it is a hybrid entity unique to the US that combines limited liability (like a corporation) with pass-through taxation (like a partnership). However, it serves a similar practical function for most small businesses.

Governing law: State law (each of 50 states has its own LLC statute) Regulator: Secretary of State of the relevant state Minimum capital: None in any state Members: 1 or more; no nationality or residency restriction Managers: Can be member-managed or manager-managed (elected manager) Annual filing: Varies by state (Wyoming: $60/year; Delaware: $300+ franchise tax; New Mexico: none) Tax treatment:

• Single-member LLC: "Disregarded entity" — income reported on owner's personal return by default
• Multi-member LLC: "Partnership" — pass-through to members by default
• Can elect to be taxed as C Corp or S Corp if beneficial
• Foreign-owned single-member LLC with no US-source income: typically zero US federal income tax, but must file Form 5472 + 1120 annually (penalty for non-filing: $25,000/form/year)

Key features:

• Maximum flexibility in governance (operating agreement can customise almost any aspect)
• No stock structure required — profit/loss allocation can differ from ownership percentage
• Not recognised as a corporation in many non-US jurisdictions (affects treaty access and how home countries classify it)
• Essential for Stripe US, PayPal US, Amazon US Seller Central, and many US-specific payment processors

Who it's for: Non-US founders who need US banking and payment processor access; bootstrapped US founders who don't need VC; professional services firms; real estate investors.

United States — C Corporation

Governing law: State law (Delaware Corporation Law is the standard) Regulator: Secretary of State (Delaware for most VC-backed companies) Minimum capital: None (nominal par value stock typical) Directors: Board of Directors; no nationality/residency requirement Shareholders: Unlimited; no nationality requirement Corporate tax: 21% federal; state tax varies (Delaware charges no income tax on out-of-state income)

Key features:

• Can issue preferred stock — required for institutional VC investment
• Subject to double taxation (21% CT + dividend tax on distributions to shareholders)
• QSBS exclusion (Section 1202): US shareholders may exclude 100% of capital gains (up to $10M or 10x basis) on sale of qualified small business stock — significant for high-growth exits
• Equity compensation (options, RSAs) well-established legal framework
• Delaware Court of Chancery: specialist corporate court with deep precedent base

Who it's for: VC-backed startups; companies planning IPO or acquisition by a US company; any business where institutional investors require it.

Germany — Gesellschaft mit beschränkter Haftung (GmbH)

Governing law: GmbHG (GmbH Act) Regulator: Handelsregister (Commercial Register), notarised by a Notar Minimum capital: €25,000 (at least €12,500 must be paid up at formation) Directors: 1 or more Geschäftsführer (managing directors); no nationality or residency requirement Shareholders: 1 to unlimited; no nationality restriction Corporate tax: ~30% effective (15% Körperschaftsteuer + 5.5% solidarity surcharge + Gewerbesteuer 7–17% depending on municipality)

Key features:

• Requires notarisation — a Notar (notary public) must authenticate the articles of incorporation (Gesellschaftsvertrag). This adds €500–2,000 in costs and several weeks in time.
• The €25,000 minimum capital is a real cash requirement, not just a formality. Half (€12,500) must be physically deposited before registration.
• "GmbH" carries strong commercial credibility in German-speaking markets (Germany, Austria, Switzerland)
• Trade tax (Gewerbesteuer) is a municipal-level tax that significantly raises the effective total rate; rates vary — Munich at 17.15% vs some smaller municipalities as low as 7%
• Annual audit required once two of three thresholds exceeded for two consecutive years: balance sheet >€6M, revenue >€12M, employees >50

UG (Unternehmergesellschaft haftungsbeschränkt) The GmbH's simplified cousin, introduced in 2008:

• Minimum capital: €1 (legal minimum); practical minimum €1,000–5,000 for credibility
• Must retain 25% of annual profits until accumulated reserves reach €25,000 (then can convert to GmbH)
• Must be labelled "haftungsbeschränkt" — the "limited liability" label is required
• Lower notary costs for standard-form articles
• Some counterparties treat UGs as undercapitalised; credibility is lower than GmbH in German enterprise markets

Who it's for: German market-focused businesses; companies that need "Made in Germany" credibility; subsidiaries of multinationals.

Singapore — Private Limited Company (Pte Ltd)

Governing law: Companies Act (Cap. 50), administered by ACRA Regulator: Accounting and Corporate Regulatory Authority (ACRA) Minimum capital: SGD 1 (no meaningful minimum) Directors: Minimum 1 who must be ordinarily resident in Singapore (Singapore citizen, PR, or holder of valid Employment Pass/EntrePass/Dependant's Pass) Shareholders: 1–50 Secretary: Must appoint within 6 months of incorporation; must be locally resident Annual return: SGD 60/year; due within 5 months of financial year end Corporate tax: 17% headline; startup tax exemption (first 3 years): 75% exemption on first SGD 100,000 + 50% on next SGD 100,000

Key features:

• The locally-resident director requirement is non-negotiable — nominee director services (SGD 100–300/month) are widely used and legal, but the nominee must have proper contract protections
• Very fast and fully digital setup via BizFile+ (ACRA's online portal) — 1–2 business days
• Mandatory corporate secretary adds to annual compliance cost
• Audit required once two of three thresholds exceeded: turnover >SGD 10M, assets >SGD 10M, employees >50
• Territorial tax system — foreign-source income generally exempt if already taxed at source at 15%+
• Dividend tax: Singapore uses a one-tier tax system — dividends paid from taxed profits are tax-exempt in the hands of shareholders (no withholding on dividends)

Who it's for: Asia-Pacific-focused businesses; companies targeting ASEAN, China, India markets; founders who want or can obtain Singapore residency; structures requiring strong institutional credibility in Asia.

Ireland — Private Company Limited by Shares (Ltd)

Governing law: Companies Act 2014 Regulator: Companies Registration Office (CRO) Minimum capital: €1 (no meaningful minimum) Directors: Minimum 1; at least one must be EEA-resident OR the company must have a Section 137 bond (€25,000 deposited with the CRO for 2 years) Secretary: Mandatory; must be distinct from the sole director if only one director Annual return: Due annually; late filing results in loss of audit exemption for two years Corporate tax: 12.5% on trading income; 25% on non-trading (passive) income; 33% on capital gains

Key features:

• Lowest CT rate in the EU for trading income (tied with Liechtenstein and effectively equal to Cyprus and Hungary)
• The "trading" vs "non-trading" distinction is critical — passive investment income (dividends received, rental income, interest) is taxed at 25%, not 12.5%
• R&D Tax Credit: 25% credit on qualifying R&D expenditure; can be refunded in cash to loss-making companies
• Knowledge Development Box: 6.25% rate on qualifying income from patented inventions and copyrighted software
• EEA director requirement or €25,000 bond is commonly overlooked by non-European founders
• Strong audit exemption for small companies (turnover ≤ €12M, balance sheet ≤ €6M, employees ≤ 50)

Who it's for: EU market-focused businesses; companies qualifying for 12.5% trading rate; IP-heavy businesses; US tech companies choosing European HQ.

Netherlands — Besloten Vennootschap (BV)

Governing law: Dutch Civil Code (Boek 2 BW) Regulator: Kamer van Koophandel (Chamber of Commerce), notarised Minimum capital: €0.01 (effectively none since 2012 reform) Directors: 1 or more; no nationality or residency requirement (but at least one managing director recommended for substance) Shareholders: 1 to unlimited Corporate tax: 19% on first €200,000 taxable profit; 25.8% on profit above €200,000

Key features:

• Still requires notarised deed of incorporation — a Dutch civil law notary (notaris) must draft and execute the articles
• Participation exemption: Dividends received and capital gains on shares in qualifying subsidiaries are 100% exempt from Dutch CT. Qualifying conditions: ≥5% shareholding, subsidiary subject to reasonable tax in its country, not primarily passive. This is the engine of Netherlands' holding company attractiveness.
• Withholding tax on dividends paid out: 15% standard rate, reduced under tax treaties (0% within EU under Parent-Subsidiary Directive for qualifying arrangements)
• Conditional withholding tax on interest and royalties to low-tax jurisdictions (introduced 2021)
• Innovation Box: 9% CT rate on qualifying income from self-developed intangible assets
• Extensive treaty network: 90+ bilateral double tax treaties

Who it's for: Multinational holding company structures; EU groups wanting to use the participation exemption; IP structures under the innovation box.

Estonia — Osaühing (OÜ)

Governing law: Commercial Code (Äriseadustik) Regulator: Estonian Business Register (Äriregister) Minimum capital: €2,500 (can be contributed after registration in some cases) Directors: 1 or more; no nationality or residency requirement Shareholders: 1 to unlimited Corporate tax: 0% on retained profits; 20% on distributed profits (dividends); reduced 14% rate available for companies making regular distributions (three consecutive years of dividends)

Key features:

• Unique distribution-based tax system: no tax until profits are paid out. If you reinvest all profits, you pay zero CT indefinitely.
• e-Residency programme enables non-residents to manage the company fully digitally — from signing documents to filing tax returns
• The business register is fully digital; filings take minutes
• The 20% rate applies at the company level — dividends are then paid net to shareholders, who may face personal tax in their country of residence depending on their home country's rules
• Banking: Estonian banks (LHV, Swedbank, SEB) are conservative with non-resident-owned OÜs. Wise Business and Revolut work well as alternatives.
• Capital requirement: the €2,500 capital must be genuinely paid in (it cannot be a loan)

Who it's for: Digital nomads and remote founders who want an EU company with deferred tax; founders physically living in Estonia; e-Residency users who understand the banking limitations.

France — Société par Actions Simplifiée (SAS)

Governing law: Code de commerce Regulator: Greffe du Tribunal de Commerce (commercial court clerk) Minimum capital: €1 (effectively none) Directors: President (Président) mandatory; additional governance flexible Shareholders: 1 to unlimited (single-shareholder SAS is called SASU) Corporate tax: 25% standard; 15% reduced rate on first €42,500 for companies with turnover <€10M and at least 75% of capital owned by individuals

Key features:

• Highly flexible governance structure — almost any governance arrangement can be written into the articles without a prescribed form
• Preferred by startups and founders over the SARL (the older French LLC equivalent) for this flexibility and shareholder rights management
• Registration now fully online via the Guichet Unique portal (since January 2023)
• Social charges on salaries are high: employer contributions of approximately 42–45% on top of gross salary — significantly increases the true cost of hiring
• Crédit Impôt Recherche (CIR): R&D tax credit of 30% on qualifying R&D expenditure up to €100M (5% above €100M)
• TVA (VAT): 20% standard rate

Who it's for: Founders targeting the French market; companies building R&D-intensive products that qualify for the CIR; entrepreneurs wanting maximum governance flexibility.

Australia — Proprietary Limited Company (Pty Ltd)

Governing law: Corporations Act 2001 Regulator: Australian Securities and Investments Commission (ASIC) Minimum capital: None Directors: Minimum 1; at least 1 must be ordinarily resident in Australia Shareholders: 1–50 non-employee shareholders Corporate tax: 25% for companies with aggregated turnover <AUD 50M (base rate entity); 30% for larger companies

Key features:

• Mandatory Australian-resident director — no substitute, no bond equivalent
• ASIC charges annual review fee: AUD 310 (proprietary company)
• Very fast digital setup — 1–2 days via ASIC Connect or a licensed agent
• No public disclosure of shareholders for proprietary companies (unlike public companies)
• Franking credits: CT paid by the company can be passed to shareholders as "franking credits" to avoid double taxation for Australian-resident shareholders
• R&D Tax Incentive: 43.5% offset for companies with turnover <AUD 20M (refundable); 38.5% non-refundable offset for larger companies

Who it's for: Founders relocating to or resident in Australia; businesses serving the Australian market; Asia-Pacific operations wanting an Australian anchor.

Side-by-side comparison table

*For foreign-owned LLC with no US-source income, provided Form 5472 filed annually. 0% on retained profits, 20% when distributed. *Reduced by tax treaty; 0% in many cases. ****Estonia withholds at company level before distribution.