subject: Form A Singapore Company: What Are Company Incorporation Benefits? [print this page] If you're considering incorporating your business, but you're unsure as to whether or not the right path to take, this article should provide you with the key points you need to consider.
When you incorporate your business, you're legally separating it from yourself and officially giving it a separate legal identity.
Before the company incorporation, you are the only personal owner of assets of the business. But, far more importantly, you are also personally responsible for its debts and liabilities. This means that if your business fails, your own personal assets are at risk! In other words, if you are decided enough to incorporate your company then you should also ensure protection of your personal property and assets.
After the company incorporation, personal ownership of amounts in the business is limited to the amount you have invested in the business.
You have no other personal liability beyond your invested capital unless if you have signed as a guarantor for other special arrangements.
Personal guarantees may be necessary where your business has little trading history, or where your balance sheet is not robust enough to provide sufficient guarantees to lenders.
There is also another benefit of incorporation. If you have your company incorporated, problems that may occur in the future like personal credits will be not affect your company since they are protected. You should also be aware that, if there are any reason your incorporated business cease to trade, all of its creditors and liabilities must be paid before you receive any of your invested capital back. If problems may occur, shareholders are always the last in line for repayment.
Your decision to incorporate your business is a very important one, particularly if you're expecting to expand your business in the future.Companies who are incorporated will not be having problems in looking for capital for the expansion of their business.
If your business is incorporated, this will absolutely mean that your business will be existing for a long period of time and you will not have problems especially in the aspect of finance in your business.
Transfer of ownership is allowed to companies who are incorporated.Separation of the business's assets and liabilities from your personal assets makes it easier to value your business. Retirement and insurance issues will easily be handled if your business is already incorporated.
By the time the company is already incorporated, the Board of Directors will be responsible for governing it.Shareholders are given the chance to choose the Directors which will act as the agents of the company in behalf of the shareholders.
Business tax rates are always lower than the personal tax rates.Be noted that there are still some double taxation that should be considered.Whilst there may be tax benefits, there will be some additional legal costs and administration costs associated with being an incorporated company to consider.
