Great Benefits of Incorporation of Businesses
You have started a small business and your attorney has advised you to turn into a corporation. By now you have read and heard the word many times, but you didn’t know its exact meaning and now, you will be creating a corporation! So, let’s know more about corporation and how to incorporate your business. Experts at Koh Management a leading firm offering incorporation in Singapore share valuable information here on the subject.
What does Corporation Mean?
Derived from the Latin word corpus meaning body, a corporation is a body, an actual person according to the law, a person that can bring lawsuits, be taxed, can buy or sell properties, sign contracts and also commit offenses. Its remarkable feature is it protects its proprietors from personal liability, within limits, for corporate obligations and debts. A corporation is supposed to be a legal entity created artificially and exists separate from its creators and performs its activities.
Why to Incorporate?
It’s agreed that by incorporating, your paperwork increases and also you get an additional task of maintaining records and more administration details. In some cases, it even creates an added tax burden. Apart from taxes, there is another fact to consider that shareholders are not responsible legally for the activities of the corporation, because the corporation has its own identity separate from those who operate it.
Here are three main reasons why you should incorporate your business:
Independence: Unlike partnership or ownership, a corporation doesn’t depend on a specific individual/s. It can perform for an indefinite period till it achieves its objective, unites with some other business or runs bankrupt.
Transfer of Shares: It’s always good if the ownership you have in business can be sold or transferred to another member of your family. The options of proprietorship and partnership can be expensive and unwieldy because of the need of retitling, making new deeds and other administrative tasks. On the other hand, in case of a corporation, the rights and privileges of the owner are represented by the shares s/he holds. The transfer of shares becomes quick and easy with a place to be signed on the backside of the shares whereby the shareholder can sell or dispose of the shares.
Attracting New Investors: Often it’s easier to attract new customers for a corporation towards itself due to limited liability as well as easy transfer of shares. Shares can be easily transferred to the new investors or in case of larger offerings to the public, stock exchanges and brokerage firms can be invited for their services.
Koh Management specializes in incorporation of businesses and is in the business for over three decades. They have earned a great reputation in the market for their high quality work, honesty, precision and sincerity.