Business registration is a legal requirement. It aims to provide the public with an official record of the company’s operations and ensure that the corporation is run by authorised persons and is not a criminal organisation. To register a business, one must submit its legal name, legal address, legal title and legal status.
Traditionally, registering a business was time-consuming and expensive. With the emergence of the internet, it is a straightforward, cheap and quick process. Registration helps authorities track the business’s operation, tax status, and many more. However, business registration is not just for surveillance or monitoring purposes; it gives a lot of benefits to the company.
Limited liability protection
When a business is registered, it becomes eligible for limited liability protection. It assures that members of the firm are not personally accountable for the company’s liabilities. Little liability protection is one of the most significant advantages as it encourages business owners to take risks without the fear of losing.
Transferability of ownership sharing is critical in any corporation and a complex process for an unregistered business. Determining the assets of an unlisted company is also tricky.
On the other hand, a registered company is considered a separate entity with assets and liabilities as it distinguishes itself from its promoters. Transferability or sharing of ownership is pretty simple in these cases.
Implies compliance with the law
Every registered business will be assigned an identification number, which verifies the business’s legality through compliance with legal bookkeeping and accounting regulations. It means that the company pays taxes and that its personnel are adequately insured. Finally, it states that the company reports its earnings to the government. Compliance with the law, on the whole, provides the business with a good reputation.
Accessing a bank account
A bank generally asks for a ‘certificate of incorporation and a memorandum of association’ to open an account for the business. Opening a bank account and accessing it becomes easy when you register a business. Without legal proof of the existence of a company, banks do not allow you to open an account.
Qualifies buyer’s criteria
Registering your business is the only way to qualify for buyer’s criteria. Most companies always tend to do business with a registered business entity.
The company becomes eternal because of perpetual succession. It refers to a company’s or corporation’s continued existence until legally dissolved. Endless succession ensures that the business continues to operate as a separate legal entity unaffected by the death or departure of members. Once registered, nothing can influence its existence, including membership, members, personnel, and shareholders.
Properties can be acquired in the business’s name when it is registered. No business member can claim this property as they are not the company’s owners. Instead, they only possess an interest in the company, measuring a sum of liability. So, the business’s property is not the property of any company’s individual.
Attracting investors and raising capital is easier when a business is registered. Borrowing also becomes effortless. Money becomes essential to a business’s expansion and development. So, completing the registration process is a wise choice for any business.
Thus, registering a business is the first step to legalising your business and enjoying all the benefits you get with it. If you are in the idea of starting a business, make sure you complete the registration as soon as possible.