Benefits of Company Formation
The term company formation is the process by which business owners officially incorporate their operation. Company formation process makes the business to be a company, and also the company is treated as an entity that is separate from those who operate it. The following are the vital documents that a business needs to have when it wants to become a company. When one wants to form a company, the following are the essential documents that they need to submit to the registrar of companies and also pay the registration fee. One of the vital documents that accompany needs to have is the article of association which outlines the rules that governs the company’s operations.
The law requires those who want to register their companies to have an article of association document which is signed by every partner in the business in the presence of a witness. The other essential document that a company need to have is the memorandum of association which contain the names and signatures of the subscribers who wish to form the company. The document also lays out the objectives of the company and its relation with other business partners, hence considered the charter of the company. When you want to register a company; you can submit the necessary document through online by sending the document to the registrar of companies directly to their websites, alternatively, you can visit their offices and submit the documents.
Depending on your choice, you decide to form any of the following companies, including public limited companies, unlimited companies, private limited company, limited liability partnership, limited partnership, community interest company, among others.
Company formation has numerous benefits, some of which include the following. First and foremost companies offer limited liability protection to their owners. The company is treated as a separate entity from the owners; therefore, the owners are not personally responsible for debts and liabilities that the company makes. As a company owner, your properties are protected from being taken by creditors when the business fails to pay their debts.
In addition, company formation assist a new business in creating credibility with potential customers, employees, vendors and partners. Other than creating credibility with the customers and employees, ownership of a company can be transferred easily. In addition, companies have easier access to capital thereby making them raise capital pretty fast. Banks and other financial institutions are willing to issue financial assistance to corporations than to individuals.
When you have a company, it is good to note that its life if not dependent to your life, therefore, the company has unlimited life, it can still exist after you left it. Besides, corporation do enjoy numerous tax benefits including deductible health insurance premiums, savings on self-employment taxes.