If it is your intention to start a new business, then you are to be commended for that as this is a very difficult business climate. Businesses are closing their doors quicker than others can get theirs open and so you’re entering a very competitive market. However, with the right business plan in place and a great deal of effort on your part, there is no reason why your business has to be a statistic two years from now. Many people who are starting off in business tend to want to start by being a sole trader or being involved in some kind of partnership. However, if you choose this path you are leaving yourself open to a number of issues that may affect your business and your personal life.
If you go through company registration with Acclime in Hong Kong, then you’re at least providing yourself and your family with some protection. For many it seems like a really big step to set up a company and a company structure, but in most cases it is definitely the right thing to do. If you’re still a little bit in the dark about the benefits of doing so, then maybe the following can help to enlighten you.
* It limits your personal liability – When you register your business as a company, then any liabilities of the business are restricted to the business only. If you were to continue to operate as a sole trader or as part of a partnership, you would be legally responsible for every part of your business and that includes all of your debts and your losses. If you’re caught up in a court case and the judge awards compensation to the other party, then you are completely liable and you might have to sell your home and personal property. A company registration protects you from this and you are regarded as a separate legal entity and you can open a separate checking account.
* It reduces your tax liability – Surprisingly, you will probably pay less tax as a registered company than you will as a sole trader. For many people, this is quite difficult to understand but most tax structures in any country are to the benefit of smaller businesses and smaller companies. If you remain as a sole trader, you will be taxed as an individual and any profits that you make from your business will be part of your individual income. When you are registered as a company, there are many tax deductions that you can take advantage of, like advertising costs, staff training costs an essential repair and maintenance for your business. To find out more about registering your company, have a look here.
Registering your business as a company just makes your life a whole lot easier and it allows you to separate the ownership and the management of the business completely. You can then pay a professional to run your business for you. If your business is not currently registered, then get it done today before it is too late.
