If you are thinking of starting a business, you have come to the right place. This article is intended to provide you with information in this regard.
If you want to establish a limited company or if you want to trade as a sole trader, you should consider the benefits of having a limited company. Read on to learn more.
What is a sole trader or a company?
• A sole trader / partnership claims to be an individual (s) present in the business who are themselves liable for the debts along with the liabilities of that particular business.
What is a limited society?
• A limited partnership has a separate legal entity precisely from its individual shareholders.
• It should be known that shareholders tend to be only personally liable for the debts and liabilities of the particular company up to the level of their own unpaid issued share capital.
• So you can see that in a sole trader / partnership type of initiative you will be fully responsible.
Benefits of a limited partnership
• Shareholder liability tends to be limited. It is the amount of capital stock subscribed and issued to shareholders.
• When the time comes to pay off the debts of the company, the personal assets of the directors and shareholders will not be seized.
• A business tends to have a separate legal existence when it comes to the law. This case is not present for a sole trader or even a partnership. The benefit of this separate legal existence is that when tough financial times arise, the assets of the business can be used to offset the debts it owes.
• The name of the limited liability company itself is protected against duplication. This is not true for an individual merchant, meaning your registered business name is not protected against duplication.
• Limited partnerships actually qualify for a low and helpful corporate tax rate. This can help the business grow.
• Public limited companies continue to trade without considering changes in directors or management, until the company is liquidated and dissolved.
The above are some of the benefits of forming a limited partnership, but like everything else, there are also some disadvantages. Make sure to look at both sides of the coin before taking a certain course of action. One downside includes the fact that corporations have limited liabilities.
It is difficult to figure out how to start a business in a new country. You need to know its rules and regulations and you also need to know what types of businesses generally thrive in there. There are many points that one must consider before starting a business. The above article is in favor of limited partnerships rather than a business that is characterized by a sole trader / partnership.