There are various factors to consider when coming up with business ideas. It’s not just about what you’re going to offer customers, which area you’re going to set up your business in, or how many extra hands you need to operate the business. While keeping these factors in mind, there’s one thing that you should focus on, and that is registering your company.
Many fail to register their companies and get into a lot of trouble, such as getting fined by the Australian government or having to close down their business. But when you register a company, you won’t have to face these problems. You can gain a few benefits that will push your company to success.
Restrict Personal Liability
If you go for a sole proprietorship, you are liable for anything that happens to your business, whether it is good or bad. Running your business this way is a risky thing to do because that means your personal assets are at risk too, such as your cars, houses, and land. But with a registered company, you’re separating yourself from the business. Meaning, the debts that your company will incur won’t be connected to you, making sure all of your assets are safe and untouched. This allows you to focus on your business better.
Eliminate Disputes with Cofounders
In several instances, many companies go out of business because of the founders quarrelling against each other. One might get fed up and decide to leave the company and take all of their shares with them. However, others won’t have to worry about the other founders leaving because there is a contractual agreement. A company also permits you to separate the business’s management and ownership, ensuring the business can be run by highly-skilled professionals who can generate profit exponentially for the shareholders.
Minimize Tax Liability
When you register a company, there’s a probability that the company will have lesser taxes. This is true for the current tax rate of Australia because an individual has a higher tax rate when compared to small businesses and companies. Sole traders are considered as individuals; therefore, both the trader and business are taxed. On the other hand, companies are eligible for a range of tax deductions such as repairs and maintenance, advertising, and education and training.
Increase Company Legitimacy and Awareness
If you want your company to gain success over time, then you should have a company structure. Apart from building an efficient company structure, registering it should also be a priority as it significantly enhances the company’s reputation and legitimacy. You can expect more third parties and other businesses to engage with you when your company is registered.
Raise the Company’s Capital Exponentially
The more the partner entities, the bigger the chances of gaining more money for your company. When you register your company, you can raise equity capital and sell shares. This is one benefit you need to take advantage of if you plan to develop or expand the business.
If you plan on registering your company, make sure you get assistance so that the registration process is fast and easy.