List of commercial entity types of Talahara
A commercial entity is an entity formed for the purpose of conducting business or general economic productivity. Many entities have structural requirements and obligations enforced by customary law or statute. As a general rule in Talahara, corporate personhood does not exist and liability for both debts and civil wrongs are connected to the individual members of a commercial entity.
Personal proprietorship
A personal proprietorship (PP) in Talahara covers the same principles of both sole proprietorship and non-corporate partnerships in many other jurisdictions. In essence, a personal proprietorship represents an individual or a group of individuals conducting business as themselves, effectively without an intermediary. PPs are particularly common among individual, semi-professional, or small family businesses.
Personal proprietorships are not enabled by statute and there are no obligations upon members of a PP. Financial liability between all members of a PP is joint while tortious liability is joint and several by default. Members of a PP pay taxes individually as there is no taxation from the entity.
Direct distributist syndicate
The direct distributist syndicate (DDS) is the most ubiquitous form of commercial entity among large-scale unions in the country. As a general rule in Talahara, there is no concept of distinct corporate personhood and a DDS is, in effect, a partnership between all members of the entity. The DDS is regulated under Talaharan statute and must be formed with a syndical constitution establishing the common assets, usufruct rights, the form of governance structure, and registration with the Talaharan Central Distribution Network.
Liability for both civil wrongs and debts is generally joint across the membership which is diffused such that it is generally absorbed by the common assets of the association or at least in part by insurance. In the case of specific torts of malfeasance, legal action can be undertaken by the entity against a specific member to sever liability. Such an action typically requires the impugned member to have undertaken a decision contrary to the will of the broader membership and thus typically only applied to members with decision-making authority. The productive assets of the association are held in common possession and usufruct by the members of the entity. Asset inventories are an element of the syndical constitution, along with the mechanisms for diffusing liabilities.
Governance must be democratic with the requirement of nested representative committees, elected management, and annual general conventions where major decisions are put to the whole membership for a referendum. Members of the entity must be members of an industrial union, either coinciding with the syndicate or as part of a broader industrial union with membership across multiple entities.
A DDS pays taxes as a single entity and is able to engage in a degree of tax deferral, both by diffusing incomes across salaries for the membership and by reinvesting profits into operations to minimize the net taxable income of the entity.
Community production association
The community production association (CPA) is a form of commercial entity in Talahara that is common among businesses that are small and typically have local reach. As with DDSs, these entities are also regulated by statute and have no corporate personhood, but have fewer requirements for formation. They must have a CPA constitution that establishes governance structure and usufruct rights for assets, but registration with the Central Distribution Network is optional and there are fewer reporting requirements compared to a DDS. Members of the association may be members of an industrial union or a communal craft union local.
Liability is, by default, joint and several across the members of the entity. The process for paying out liabilities does not need to be set out in the constitution and can be determined by the entity's accounting. In addition, the association's profits are paid directly to the membership, who file the income as a portion of personal income which subsequently can be reinvested into the business, preventing tax deferral.
Nested liability corporation
The nested liability corporation (NLC) is the only type of commercial entity in Talahara with recognized corporate personhood, albeit limited, and is exclusively used for foreign corporations doing business in Talahara. Registration as an NLC is required for foreign corporations to move assets in and out of the country. The major requirements are:
- The local workforce must be members of an industrial union;
- The NLC must maintain collateral or connect collateral from a parent entity equivalent to a portion of gross revenues of the entity in Talahara for the purpose of liability; and
- Tax deferral is limited to reinvestment into the NLC and wealth transfers over a specific threshold back to a parent company are taxed at full tariff.