You’ve already taken the first step of launching your small business, but what’s next? As a first-time business owner, there are many new choices you’ll have to make. Part of this decision-making process includes choosing whether or not to register your business. While there are plenty of benefits that come with registering your business, there are also a few considerations you’ll need to investigate.
4 Benefits of incorporating
- Limited liability
- Incorporating your small business, which is the process of forming a company or other organization as a legal corporation, helps protect your personal assets. Limited liability is defined as the legal structure for a business or organization where profit loss will not exceed the amount that’s invested into a registered business. This means that as a registered business owner, you are not held accountable for any debts or additional liabilities. Depending on the size of your business, all business owners or partners involved are also not held accountable for any personal liabilities should they occur.
- Getting funding
- It is much easier to raise funding when you have a registered business. Investors will not take you seriously if you are running an unregistered business, it’s also way harder to regulate a business that is not registered.
- Better business credibility
- Registering your business can also help spread your brand awareness. Once you’ve finished the registration process, you’ll get the advantage of making more impressions on potential business partners or investors. This means, your profit could increase and you’ll have more to spend on your marketing efforts, which in turn helps increase your business credibility. Even better you’ll make it more likely for potential clients and customers to choose your business over competitors in the same industry because you’ve made that first impression.
- Protecting your business identity
- Registering the business means that your corporate identity is protected, and no one will steal your business name. Other people can steal your business name, register it then sue you for using it. It’s best that you register your business and trademark your logo.
Considerations
- Lots of paperwork
- Registering your business as a corporation requires a lot of attention and ongoing paperwork. Registered businesses are required to document all business and financial activities, including tax documents, invoices and accounting records, and more.
- Restructuring
- If you decide to register your business, you’ll want to consider potentially restructuring your business. This can range from establishing new business bank accounts and operations, introducing new business ownership or management with shareholders, and more.