Even if you have a business plan and the financing all in order, you still have to go through the motions of actually setting up the company, registering it, and making it official. Many people might consider paying someone for a service, but if you are a do-it-yourself kind of person and you want to save a lot of money you can do it yourself. All it takes is an afternoon and a little bit of patience.
1. Why Incorporate?
The biggest advantage to setting up a company is incorporation. Unlike an unincorporated business, corporated businesses are a separate legal entity. The company will have its own name. You should incorporate even if you are just running a one-person home business. You can also sell your company later if the need arises if you incorporate.
2. Limited Liability
By far, the biggest advantage to incorporating, however, is getting what is known as limited liability. Let's say for the sake of argument that someone sues your business. As a separate legal entity, the worst that can happen is that you lose everything you invested into starting up the company - collectors are not able to force you to sell your car, home, etc. This isn't the case with an unincorporated business - your liability is unlimited and your personal finances in addition to the finances of your company are at stake.
3. Step 1 - Select A Name
In order to start a business, first, you must apply for a registered name. You will want to do research beforehand to see if any businesses in your community currently are already using the name you are thinking about naming your business. Try and choose a name that is unique, memorable, and distinguishes your business as belonging to a particular industry. For example, Acme Industries isn't as good as Acme Autobody. Likewise, Acme Autobody can be made more origional and memorable - Speedy Autobody. It might also help to add your town or city onto the end, for example, Speedy Autobody Seattle. This is just an example of what separates the sheep from the goats. You might also want to put your name in the company name, for example, Johns Autobody Shop.
4. What Type Of Company Should You Choose
As was gone over earlier, chances are you will want your company to be incorporated, meaning you are not personally liable for your business. Other than that, you can choose to have your company privately or publicly owned. Unless you are huge and intend to be listed in the stock market you should stock to the private variety.
5. Your Obligations
Once your business name has been approved, you will be provided with a company registration number. It is then up to you to fill out another, second form to register for an income tax number for your business. You are also likely going to be required to have your place of business inspected to make sure that it adheres to the requirements of a building code - proper fire extinguishers should be a minimum requirement. Lastly, you may want to put up a small sign for your business and you will also want to display your licence in an inconspicous place on the premises.
By: Trevor Marshall
No comments:
Post a Comment