Registering your company is essentially obtaining the legal right to do business within your chosen area of jurisdiction, and also ensures that the business or company is operating in accordance with its own legal policies.
The process is often perceived in two ways: either the company owner/s apply for company registration too early, before there is a solid model on how the business should achieve its goals, or too late, when the business is already being held liable.
That being said, there are still many reasons why pursuing company registration is not only viable, but crucial.
Security and Legal Benefits
The first and most obvious reason why you should pursue company registration is protection and professionalism. In particular, applying for a sg business firm registration makes it so that you and your employees, are to some extent, protected under the law.
Another is that it avoids confusion among businesses that are already registered (as well as preventing others from using the name of your business), which could end up in a lawsuit that may or may not turn out in your favor.
Starting a business may have been your lifelong dream, but some of the dangers that go along with pursuing your plans to register your company is the possibility of losing all your personal assets due to liabilities or financial losses. Registering will ensure that your assets and liabilities are separate.
Other legal benefits of registering your company include the following:
• Transferable ownership – One of the benefits that can be gained by opting to register company in Singapore for foreigner enterprises is that the ownership is transferable, especially in incorporated businesses, and this transfer can either be in whole or in part.
• Durability – Depending on the company’s structure, the effects of extended absence (or even the death) of shareholders, co-owners, and officers can be weathered through without compromising the company as a whole.
It also tells your clients and partners that you and your company are willing to engage in business in the long term instead of being a fly-by-night kind of business owner who closes shop once he/she encounters difficult times.
• Credit rating – Because of its nature, a business can have the same legal status as a person, complete with its own separate credit rating and credit history. This in turn places the company it a positive light for future investors if it is seen as a reliable creditor.
Building up a business’s credit portfolio does take time, but the key to doing so is management – even certain types of debt that may appear to be negative can actually be positive for investors.
On Hiring Employees
Skilled employees will tend to want to look for a stable job under a company that they know can provide them with a steady source of income and isn’t likely to fold after six months or within the next year due to any liabilities or unforeseen financial problems, all of which are things that a registered business can provide for both you and your employees.
While you can hire freelancers to help fill in the gaps in your workforce, being able to hire at least the minimum number of people needed to keep your business running means that you need to register company (on helpful websites such as www.sgbusiness.sg) to meet this purpose, as it isn’t possible to hire employees legally when your business isn’t registered.
Investors are attracted to one thing in particular: stability. This is perhaps the biggest thing that company registration can provide for them, as they know that their investment is safe and will return to them in the near, foreseeable future.
The simplest reason for this is because investors that looking to invest in your company actually need to know that you have a registered business in the first place, which is only possible if you have applied for company registration.
Private equity is also another reason why many opt to register company in Singapore, as you want your investors to feel comfortable in having an exit strategy as well as the protection provided by company incorporation.
From a legal perspective, business owners looking to company incorporation as a means to expand their enterprise, whether in Singapore or abroad, will find that the only way to do so is by making sure that the assets that they already have are secured in the first place.
This is especially true if the starting business works on the principle of an open company, and would even make it easier for the business to be able to register, as an open company already emphasizes on transparent record-keeping and communication due to its nature.
Company registration is important, especially when it comes to company incorporation, as it delineates your personal assets from your company assets and gives the assertion that the company belongs to you and cannot be simply seized or absorbed into another.
Taking the time to register company might be seen as downtime on your part, but the result will grant you and your employees certain legal protection. Leaving out the company registration process to prioritize income generation can make it difficult to even start hiring employees. This, in turn, results in a lot of bureaucratic hassle and paperwork.
The best time to apply for the registration process is immediately once you are ready to begin operations and open your doors to customers/clients – the paperwork should have the same priority as the equipment, personnel, and location.