What Is Business Incorporation?
Are you keen to find out the basics of business incorporation? Do you want to learn what the major differences between the different trading structures available to you and your business are? Are you a business owner thinking of incorporating your business? Did you know that how much you are taxed will depend greatly on your trading structure?
Maybe you are new to the world of business and perhaps just a bit curious as to how the whole incorporation process works. There are numerous business opportunities out there - and finding the best one for you will take a bit of deliberation.
So obviously there are A LOT of factors that you need to reflect upon before getting into the nitty-gritty of business incorporation.
To begin with, do you really know what business incorporation is? You need to be sure before jumping in to the deep end and wasting your money on setting up a trading structure that may not be financially or economically viable for you.
Fundamentally, business incorporation is the formation of a legal entity commonly known as a company or corporation, which then has rights and liabilities (or legal responsibility) independent from its members. So what is a company?
Business Incorporation - check Next, The Basics of A Company
So now that it has been established that a company is separate legal entity from its members and the general public. When creating a company, you are really establishing a legal 'person' that is able to do things that normal individuals can do legally.
Were you aware that a company can own property in its name, sue and be sued in court and even enter into and sign contracts? Pretty cool isn't it?
A company is an entity that has members (frequently called shareholders) who own it and people (acknowledged as directors) who manage the corporation on a day to day basis. If you plan on starting up a company with one director, you should be aware that a shareholder (or member) can be the sole director of a corporation.
You have probably notices that a company is to a great extent like a person - a separate legal entity. So why do a lot of people go to the trouble of spending a lot of money to create a company, if it will have essentially the same right as an individual - there are numerous benefits of incorporating your business.
Find out why a lot of people are turning to business incorporation.
Company Basics - check Next, The Advantages of Business Incorporation
Why somebody chooses to incorporate their business is really unknown. It can be because of one or more reasons. There are countless reasons why people running businesses choose incorporation. A business will incorporate mainly for financial protection.
This means that ultimately the owner of a company is pretty much free from any of the liabilities of the business itself. Sounds pretty good doesn't it? Now compare that to a partnership - did you know that each of the partners to a partnership is subject to unlimited personal liability when it comes to any debts of the partnership? That's not really fair is it?
An additional reason why a lot of small businesses choose business incorporation is because as a separate legal entity, a company will continue in spite of the death or incapacity of any of its shareholders ' this giving a sense of eternal existence.
This seems to appeal to a lot of small business owners, knowing that someone will take over when the time comes.
Company Benefits - check Next, The Shortcomings of Business Incorporation
Just think about the increased amount of paperwork! Before incorporating your business, please keep in mind that there is heaps more paperwork to be done to help maintain a company, compared to a sole trader or partnership business.
This includes keeping a minute book, ensuring that all the relevant documents are kept up to date - all of the time, organizing and carrying out annual shareholder meetings and do not forget the extra Tax Return you will need to prepare!
Another disadvantage of incorporating a small business is that obviously a company is rather expensive to set up. The main reason why a company is more expensive to set up is quite simple. A company is a much more intricate legal entity, compared to a sole trader or partnership!
So naturally it will be more expensive to set up! Incorporation of your small business will cost you anywhere in the hundreds of dollars - and that is only to set up the company.
It is advised that you speak with your lawyer and accountant before making any rash decisions - as they will be able to go through your finances and which (of the many) business opportunities will be legally and financially best for you!
Maybe you are new to the world of business and perhaps just a bit curious as to how the whole incorporation process works. There are numerous business opportunities out there - and finding the best one for you will take a bit of deliberation.
So obviously there are A LOT of factors that you need to reflect upon before getting into the nitty-gritty of business incorporation.
To begin with, do you really know what business incorporation is? You need to be sure before jumping in to the deep end and wasting your money on setting up a trading structure that may not be financially or economically viable for you.
Fundamentally, business incorporation is the formation of a legal entity commonly known as a company or corporation, which then has rights and liabilities (or legal responsibility) independent from its members. So what is a company?
Business Incorporation - check Next, The Basics of A Company
So now that it has been established that a company is separate legal entity from its members and the general public. When creating a company, you are really establishing a legal 'person' that is able to do things that normal individuals can do legally.
Were you aware that a company can own property in its name, sue and be sued in court and even enter into and sign contracts? Pretty cool isn't it?
A company is an entity that has members (frequently called shareholders) who own it and people (acknowledged as directors) who manage the corporation on a day to day basis. If you plan on starting up a company with one director, you should be aware that a shareholder (or member) can be the sole director of a corporation.
You have probably notices that a company is to a great extent like a person - a separate legal entity. So why do a lot of people go to the trouble of spending a lot of money to create a company, if it will have essentially the same right as an individual - there are numerous benefits of incorporating your business.
Find out why a lot of people are turning to business incorporation.
Company Basics - check Next, The Advantages of Business Incorporation
Why somebody chooses to incorporate their business is really unknown. It can be because of one or more reasons. There are countless reasons why people running businesses choose incorporation. A business will incorporate mainly for financial protection.
This means that ultimately the owner of a company is pretty much free from any of the liabilities of the business itself. Sounds pretty good doesn't it? Now compare that to a partnership - did you know that each of the partners to a partnership is subject to unlimited personal liability when it comes to any debts of the partnership? That's not really fair is it?
An additional reason why a lot of small businesses choose business incorporation is because as a separate legal entity, a company will continue in spite of the death or incapacity of any of its shareholders ' this giving a sense of eternal existence.
This seems to appeal to a lot of small business owners, knowing that someone will take over when the time comes.
Company Benefits - check Next, The Shortcomings of Business Incorporation
Just think about the increased amount of paperwork! Before incorporating your business, please keep in mind that there is heaps more paperwork to be done to help maintain a company, compared to a sole trader or partnership business.
This includes keeping a minute book, ensuring that all the relevant documents are kept up to date - all of the time, organizing and carrying out annual shareholder meetings and do not forget the extra Tax Return you will need to prepare!
Another disadvantage of incorporating a small business is that obviously a company is rather expensive to set up. The main reason why a company is more expensive to set up is quite simple. A company is a much more intricate legal entity, compared to a sole trader or partnership!
So naturally it will be more expensive to set up! Incorporation of your small business will cost you anywhere in the hundreds of dollars - and that is only to set up the company.
It is advised that you speak with your lawyer and accountant before making any rash decisions - as they will be able to go through your finances and which (of the many) business opportunities will be legally and financially best for you!