How to start business
When starting your own business you need to choose a corporate form that enables you and your company the best framework. There are major differences between the framework of one who is the proprietor of a sole proprietorship and the holders of a limited company.
Should you start your own business?
Many have a desire to start their own business. There are many areas you must think about, and there are a lot of pitfalls. Starting your own business often starts with a good idea and a need in the market for a service or product. Then the idea is structured so that a business can be established and the work can begin. To start the company is the corporate form as an entrepreneur you select determines which rights you get, the personal risk you take and how the taxation of your company becomes.
Help Company specializes in providing good products to match entrepreneurs wishing to start their own business.
Learn from other entrepreneurs, their most common errors:
Experience is that entrepreneurs often make two mistakes regarding the establishment of the company. The first flaw is that they establish the company without being aware of the framework of company, or if there are other and better options. This is largely due to lack of information.
The second flaw is that they are waiting to establish the company to service / product to be sold. This means that any costs of contents planning phase and pilot project can not be taken into account for the company, when the costs occur before the company was established. When the company’s costs means less tax, it would be wise to establish the company as soon as you have decided that they should start their own business, and not necessarily wait until all plans are laid.
Which corporate form should I choose?
It is easy to start business as a Sole proprietorships . After a while you will receive a registration number. Few self-employed are still surprised that individual enterprises are grossly discriminated against:
- Personal risk, which means that by a failed venture as owner will be liable for all debts and obligations of its own economy. It may ultimately result in the need to sell everything you own to cover “the company’s” debt and risk being turned personal bankruptcy.
- You can not hire yourself, so you are loosing a lot of social rights as the right to unemployment benefit or layoffs, the right to 100% sick pay, etc.
- Sole proprietorships do not get the opportunity to reinvest profits in the company without having to pay full salaries tax which can be really high before reinvestment can take place.
Is the corporation a better alternative?
A limited company is in most cases a better organizational structure for those who will start for themselves. Here you are not personally liable for company debt, which means that by a failure only lose what you bet, but not your private assets. You can hire yourself and automatically get the usual benefits like 100% sickness benefit, unemployment benefit, the right to minimum standard deduction, etc. The company will also have a more professional tax regime that means that you can reinvest the profits in your business by just paying corporation tax.
To establish a limited company is more complicated than to register a sole proprietorship and there are several ongoing formalities to be performed as general meetings, and more.
Related articles: http://www.sba.gov/content/follow-these-steps-starting-business