The Importance of Registering Your Business: A Guide
Businesses, unlike people, can live on forever, being passed down through the generations or sold. In most cases, entrepreneurs don’t launch a company with the goal of shutting it down in a year, but rather to begin building an empire they can eventually sell or use to support themselves. An established company can be transferred from one generation to the next, just like a home, car, or other property, through inheritance or sale.
Registering your company makes it much easier to attract investors, and it also lends your business an air of legitimacy that can help it flourish. In addition, when small businesses band together, they can have a significant impact on the economy and the creation of new jobs. Forming a company provides legal cover for your operations and establishes a distinguishable identity for your enterprise.
Everyone’s lifelong ambition is to become the chief executive officer (CEO) or managing director (MD) of a successful company. Taking the time to register your business publicly demonstrates that you are serious about succeeding as a small or medium-sized enterprise.
You can shield yourself from legal action by registering your business.
This is the single most important justification for formally establishing your company. The legal status of a Private Company (Pty) is protected by statute. By registering as a (Pty), a business is recognized as a legal entity that exists independently of its owners. What this means is that shareholders are protected from major losses. In the event of a crisis, investors’ and owners’ personal property will be safe. You will not have any of your private property seized in the event of business failure or legal action. Because there is no protection against the mixing of business and personal funds in informal trading, it is possible to lose everything. You, as the business owner, want to keep your hard work safe, so it makes sense to buy assets in the company’s name and transact business with them.
Credibility, which increases when a business is registered, is another benefit.
Most companies aim to enter the corporate sector so they can trade with other corporations and increase their revenue. Only if your company is legally able to issue tax invoices and other documents verifying its legitimacy will most customers, especially businesses, work with you. That’s a matter of regulation and control. The failure to register your company can give the impression that you are attempting to avoid paying taxes. That’s pretty indicative of dishonesty.
Money to put into your company
A legitimate business registration is the first and foremost requirement for getting a business loan. Nobody who hears you asking for money for an unregistered business will take you seriously. For a complete guide on how to set up a company, visit us now to learn more.
