David Wormley, June 11, 2015
While every country has companies with characteristics that allow them to be classified and compared, different jurisdictions draw from different legal traditions.
Broadly speaking, these can be split into common law and civil law traditions (stemming primarily from English and French law respectively), with some systems being influenced by some aspects of the American system not present in the other major frameworks.
Common law systems are usually found in Commonwealth countries (former British colonies), while civil law systems are used in European countries and the countries that formed their former empires.
The core of corporate identity is the company’s separate legal personality and limited liability for shareholders. Similarly, most jurisdictions will have two company types that have different features and administrative requirements:
The private company:
These are companies with small numbers of shareholders (limited to 50 in most cases) and limited share transferability (typically requiring the consent of other shareholders to make a sale). In return for these restrictions, private companies have low capital investment requirements and relatively simple administrative requirements.