Are you considering going into business on your own without any two people? There are two business structures which is appropriate for a small outfit like yours: a single proprietorship (sole trader) or registered company.
While you may consider setting up a single proprietorship, the Corporations Act of 2001 does allow you to pitch a company with just one person to get and run whatever. If this is the way you want to go, then in your situation to do is indicate your choice in the ASIC registration application as “a proprietary company with limited liability”.
You in order to be both the sole shareholder and also the sole director of organization. The company is legally regarded as being a sole shareholder/director proprietary contractor. You may wonder why anyone would would prefer to register as a sole proprietary company regarding as in one proprietorship.
Well, there are real benefits to being registered as a sole shareholder/director company. Below are some potential reasons individuals select a company regarding your sole proprietorship:
* Legal personality of company.
Once a business is registered with the ASIC with an ACN has been is issued, the company becomes a legal entity using a personality is actually why independent and separate from its shareholder. The aspect has important facts legally: A company can enter into contracts in the own name and it will also sue, and be sued.
If a company is in debt, the amount owed doesn’t automatically end up being the debt within the shareholder. As the result, a civil lawsuit for the collection of a sum of money against the organization is never a a lawsuit against the shareholder.
This is they the liability of a shareholder is proscribed to the cost of his shareholdings unless he previously signed a personal guarantee just the one pursuing legal action. This built-in limitation isn’t available in single proprietorships or for sole sellers.
So if you find yourself conducting business by yourself, and you wish to limit organization liability, then the sole shareholder proprietary company is for then you.
* Flexibility in ownership
If your business grows later on and you wish to create incentives for your non-shareholder employees who have contributed to your success of your company, started to be good method to increase their involvement by transferring shares in an additional to all of them.
This furthermore known as a stock choosing. Because of the company’s structure, you can accommodate non share-holder employees into the company shareholdings without required to terminate the legal status of enterprise.
Another benefit of the independent personality of the company is it may persist for the duration of the company’s registration, notwithstanding changes regarding ownership in the company’s features. The death or retirement for a shareholder or even the sale, transfer or assignment of the rights to some company’s shares will not mean the termination about a company’s presence.
You may one day decide to hand over the reins for this company to a person else, such as one of one’s experienced managers or employee-shareholders. Even you may find a change of directors, the company will still exist as its registered car.
It is worthwhile speaking having a legal adviser or accountant as from what is obtaining structure independently and your business. Also different countries will often have different legislation on this so check locally also.
It can be to register a company Online One Person Company Registration in India, , however, if this is really a daunting prospect for you, there are appointed registered agents, who will advise and manage your company registration.