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The type of activity is the sector in which the business will operate. It can involve the provision of services, trade, or production. A business may have more than one type of activity.
The choice of the type of activity will determine which taxes will need to be paid for the business in the future.
The type of activity determines the legal form of business registration (individual entrepreneur or legal entity) and the choice of tax system.
It also determines the need for licenses or permits, the possibility of using tax benefits, and access to state support programs.
You can find the types of business activities and their corresponding codes on the "Classifier of Types of Economic Activities".
Enter keywords describing your business activity in the search field and select the appropriate one from the list of suggested options.
During state registration of your business, you will submit the code of your primary business activity.
You can engage in more than one type of activity during your business operations. You will need to indicate in the appropriate field in the reports submitted to the tax authority the types of activities you engaged in during the given period.
It is not necessary to register as an individual entrepreneur or legal entity if you are engaged in the following types of activities
Without registering as an individual entrepreneur or legal entity, you can also perform the following work for individuals
The legal form is the type of business organization registered in the State Register, which grants the business specific rights and responsibilities.
Some of these types include:
Each type has its own characteristics. By becoming familiar with them, it is possible to choose the option most suitable for the business.
In Armenia, you can register a business as an individual entrepreneur (IEP) or a legal entity (there are more than 34 types of legal entities).
The most common types of business registration are:
Individual Entrepreneur (IEP)
Limited Liability Company (LLC)
Joint Stock Company (JSC)
This form of organization has two types:
You can also familiarize yourself with the features of other types of legal entities to make the right decision.
To choose the appropriate type of organization for a business, it is necessary to understand whom the person wants to start the business with, whether they have capital, and if employees will be involved.
The answers to all these questions will help make the most suitable and beneficial choice.
If you are starting a business alone, consider registering a sole proprietorship, as in this case, you will be able to operate as an individual with the rights of a legal entity.
If you have co-founders, it is more appropriate to establish a limited liability company, which can have 1 to 49 members. Depending on the size of their investments, they can participate in decision-making and bear responsibility for the activities of the LLC.
A joint-stock company is advisable when attracting investments from a large number of shareholders whose participation in decision-making needs to be coordinated.
Authorized capital is the minimum amount formed from the founders' investments to cover the company's expenses.
Commercial organizations generally have no minimum capital threshold (with exceptions for certain activities, such as those in the financial, insurance, and investment sectors).
In the case of a individual entrepreneurship, no authorized capital is required as the founder of a IE is personally liable for the organization's activities with all their personal property.
In the case of an LLC and a JSC, the authorized capital is formed from the founders' contributions. It is divided into shares in the amounts established by the charter, which guarantee the fulfillment of the company's obligations.
It is more reliable for partners and investors to conclude contracts with an LLC, JSC, or other organizations operating on the basis of authorized capital.
Regardless of the legal form of business organization you choose, you can conclude both labor and service contracts.
Registering an LLC or JSC to pay salaries and fulfill tax obligations is more expedient because they have a certain amount of capital.
If you do not expect a large turnover, it is preferable to register a Individual Entrepreneurship, but from the point of view of large turnover, attracting international investors, and being a more reliable party to contracts, it would be more appropriate to register an LLC or JSC.
By becoming an individual entrepreneur, you will be able to:
The rights of LLC members are determined by the legislation of the Republic of Armenia, the company's charter, the founders' agreement, and the decisions made.
The LLC members will be able to:
The rights of shareholders of joint-stock companies are defined by the legislation of the Republic of Armenia, the company's charter, the shareholders' agreement, and the decisions made.
The rights of shareholders depend on the type of their shares: common (ordinary) and preferred.
A share is a security that defines the rights of its owner (shareholder) to receive dividends, participate in the company's management, and receive a part of the property after its liquidation.
The owner of a common (ordinary) share has at least the right to:
Common (ordinary) shares of a certain company class give their owners the same rights.
The owner of a preferred share has the right to:
Preferred shares of a certain class of the company provide their owners with the same rights.
