Any person can decide to run his own business. When there is a willingness to supply any product or service to another individual to earn a profit, it can be considered a business transaction. If you want to venture into this trade and have the vision to expand the business with several partners or other people in the future, you may consider doing all the steps to register a company.
While registering a company may require you to go through many tedious tasks, it will provide plenty of benefits for your planned business. Here are some perks that your future company would enjoy once you have it registered.
Essential Perks Of Registering A Company
1. Limits Personal Liability
If you are a sole trader or if your business is under a partnership, you will be legally responsible for all the features of the business. It means that you will be liable for all debts and losses. By doing business in this manner, you will put yourself at risk because you also need to put your personal assets on the line.
But if you register a company for your business, it will become a separate legal entity that can protect all your personal assets from getting associated with your business actions. It means that the debts incurred by the business will not get attached to you. As a result, your personal credit will not be affected.
2. Reduces Tax Liability
You may likely pay a lesser tax rate under a company structure, depending on the amount of revenue that the business could gain. Australian companies and small businesses usually pay a lower tax rate compared to the highest individual tax rate. If you register the business as a sole trader, you will need to pay taxes as an individual. You will also have to include the profits of your business in the computation of your income.
Also, companies are often entitled to various tax deductions. Suppose you include advertising, repairs and maintenance, and education and training in the computation of your business taxes. In that case, it will be deducted from the overall amount of tax that the business needs to pay.
3. Proves Legitimacy And Boosts Brand Awareness
Some consumers only patronize products from legitimate brands. They would avoid any items offered by producers and suppliers that are not legally registered. So if you want your business to expand and succeed, it is a must to register a company.
Also, registering the company can boost the reputation of the business. Both customers and third parties will be more comfortable engaging with companies registered under the Australian Securities and Investments Commission and those with an Australian Company Number (ACN).
4. Provides Opportunities To Raise Capital
If you register a company, you will be able to attract investors to raise more money for the business. It will let you have the ability to borrow for the capital and incur debt for the business. It will also let you sell company shares and boost equity capital. With the money that you will raise, you can use it for the expansion and development of the business. You can use the money to fund any plans to add more products in the future.
Registering your company can be one of the ideal ways to make your business grow. It will also help you ensure that the venture will be successful and profitable. You can seek the help of a business lawyer if you want to know all your options when registering your business as a company.