How to use third parties when starting a business

Understand the benefits and costs of using a third party

How to use third parties when starting a business

5 Reforms and good practices

How third parties can be involved in your business start-up.

Using the services of third parties in a business start-up is a common and established practice. However, third parties can be time consuming and costly. This is why governments in several countries have made the use of third-party services optional.

For example Burundi enacted a law in 2011 that eliminated the need to have articles of association notarised. This reduced the cost of registering a business by 21% and the time by four days.

The benefits of online incorporation systems

Some governments have encouraged the use of online registration platforms to reduce the costs associated with third-party services. These online systems usually don’t need the involvement of lawyers or notaries as intermediaries to authenticate company documents and complete the registration process. These platforms may also enable digital forms of identification such as electronic signatures, which replace some of a notary’s roles.

For example, Germany1 made electronic registration compulsory in all its states and allowed online publication of incorporation notices, reducing start-up time by six days.

In 2013 the Chilean government simplified starting a business by allowing entrepreneurs to register certain types of legal entities online free of charge. This change reduced the time it took to have company statutes registered by notaries from two days to one.

Final takeaway

Using legal services and notaries offers the peace of mind that compliance brings. Be aware from the outset that these services will add up, and factor this into your start-up costs. It is worth considering using electronic registration processes, if this is permitted, to reduce costs.

  1. In Germany electronic registration and publication were enabled by the Act on the Maintenance of Electronic Commercial Registers, Cooperative Registers and the Companies Register, effective January 1, 2007.