To begin here with the right mindset, you must know that your business is separate from you. Having said that, we mean, your business is a legal entity with a stated purpose of its existence and the nature of work it would do along with its handlers such as the promoters or managers. In other words, your business also has a liability that is separate from that of yours. You must, therefore, do the business registration in the first place. However, registering your business, you will stand to benefit in more than one ways both in the short-run as well as in the long-run.
Key areas of business registration
Creating a unique identity: To register your business, you have to do a lot of paperwork such as drafting the Memorandum and Articles of association with the details like the purpose and the nature of the business, its’ directors/assignees, funding, as well as the cap on funding (authorised capital and subscribed capital) of the company to name a few here. Based on the submission of the relevant documents and verification of the same by the competent authorities, your business is then allotted a unique number along with the stuff like logo etc. This unique number and logo become your identity in the eyes of the law.
Limiting liability
Since your business is a legal entity, it has a separate liability. Having said that, we mean, you being the owner of your business will not be held directly responsible in the case of an accident, for instance. On top of it, you can insure your business with a third party liability. Business registration is thus immensely helpful befitting your business goal.
Tax advantage: When you register the business, you get a tax advantage. For instance, for the promotion of small-scale and cottage industries, there are special schemes from the government that grants tax relief and at the same time, you can access government sponsored training, materials, and others based on the country of your operation.
Asset creation: By registering your business, you actually create an asset. People with a fair idea of balance sheet preparation know for sure that there are two separate parts of it. To your left, all your liabilities are recorded and to your right, all assets are recorded. Having done business for years, you earn a reputation that, in other words, is known as the goodwill of your business. Do you know your goodwill is an asset? Interestingly, it is this asset that helps you claim a premium for your products or services in the market.
Attracting investments
In the course of time, the business scenario keeps changing. For instance, a couple of decades back, people couldn’t think of business beyond bricks and mortar outlet. Today, e-commerce has taken the centre stage of all businesses all over the world. All those put together indicates that you need to expand or diversify with time for which you would need funding. With a registered business and healthy balance sheet, you can easily attract investments in your business.
In fact, there are innumerable benefits of business registration. To know more here, we recommend for registering your business in the first place. After all, knowledge by experience stays on your side for life.