Registering a company is not an overall complicated process- anymore. Due to the digital revolution you are able to register your company online. If you want to learn more about how to register a company you can use our entrepreneurship chatbot to learn how.
I am often asked by entrepreneurs when is the right time to register a company? My answer to this is, when you have a business and not when you have an idea. A lot of people register companies because they are in love with the idea of having a registered company. I am not sure if it makes for interesting conversation or it looks great on your social media feed, but this is not the purpose of registering a company. The purpose of registering a company is to afford your business certain legal protections and benefits that are not awarded to informal enterprises.
When you register a company, your business is recognised as a separate legal entity. What this means is that you and your business are seen as separate entities , and therefore any obligations that arise from your business are separate from your personal obligations. Therefore you can take out business loans in the name of the business, and not in your personal capacity. There are certain exceptions in which owners can be held personally liable for the actions of the business.However, the general rule is that the owners of the business cannot be held personally liable for the business. Also with having a registered company , you are afforded certain protections and rights awarded by the Company’s Act (depending on the circumstances) that are not afforded to informal business. Simple things like having a business bank account are only afforded to registered companies and not informal businesses. Having a separate business bank account is critical if you wish to run and effective and successful business. The best thing about having a registered company is that you have more opportunities to scale and grow your business. There are different types of business structures that offer different benefits and you can learn more about this by following the link ().
As you acquire certain rights and benefits from having a formal business you also incur certain duties and obligations. Once you have a registered business you have to comply with certain tax requirements and obligations, which you can learn more about using the following link (). Even if your business generates no money you are required to pay certain minimums in order to have your business still registered and in the system. This gives rise to a case against having a business registered if you have not intention of running the an actual business.
There is no reason to register a company if you simply have a great idea. So many myths and misconceptions are associated with having a registered “company”. Simply registering a company does not automatically qualify you as a business owner, nor does it guarantee you a fortune. There are people who make a habit of registering businesses but have no intention or plan of action to turn it into a viable business operation. So if your intention is to register a company to finally be a “director” then you should reconsider registering a business. However, if you are an informal business you should highly consider registering a company, this way you can be afforded rights that could be beneficial in helping you further expand your business.