There are two types of entrepreneur: the optimistic and the apprehensive. The optimists tend to formulate new business ideas constantly, and have a multiple entities registered, while the more apprehensive entrepreneurs tend to hold things off until they have some kind of validation. Regardless of which type of business owner you are, getting registered is hugely important. While you don’t need to rush the process, waiting too long could have severe consequences.
Here are six reasons why you should get your business registered ASAP:
1. It Makes You Look Professional
Corporate identity is one of the most understated elements of running a business, yet it’s what provides stability. Having a registered business name makes a huge difference when you’re approaching clients. It’s much easier to convert customers when you’re operating under a legal entity, rather than your own name.
2. You Can Separate Your Personal Bank Account
In order to setup a business bank account you will need confirmation of your business registration. Having a bank account purely for business activities will make your professional life much easier to manage.
3. It Protects Your Identity
Identity is hugely important. Businesses wear it like a badge of honour and spend many years building upon it. Registering a business not only gives you an identity, but also protects it. This will give you a legal grounding if anybody tries to operate under the same name in the future.
4. You Can Seek Finance
This is perhaps the most important reason. When you’re applying for a business loan and/or finance from the private sector, you will not only need a business bank account, but also registration details. Sometimes backers will want to see that you’ve already been successfully trading; therefore, the sooner you get set up the better. If you are planning on seeking loans, grants and investments, strengthening your Excel skills for banking and finance is highly recommended, especially if you don’t have the capital to hire an accountant. The ability to demonstrate an understanding of the back-end operations will work in your favour.
5. It Protects Your Personal Liabilities
To form a limited liability company there must be at least one share issued – which is essentially a percentage of ownership. Under a limited liability company your business is a separate entity to you; therefore, it will be the business that’s responsible for debts if operations turn sour – your personal assets will be safe. Sole proprietorship and partnerships do not offer this same level of protection.
6. It Provides Continuity
Coca Cola, Cadbury, Toyota – recognise them? These brands are multi-billion dollar businesses that have been in the game for decades. One of the main reasons why they are still successful today is because of continuity. Although they have been transferred down through the generations and created hundreds of different products, they have always been instantly recognisable. Registering a business provides added continuity, which reinforces your brand.
The way in which your company is legally setup could have a profound impact on your business, affecting everything from your financing options to your personal legal obligations. You should always take as many precautions as possible in the early stages as that’s when your operation will be at its most vulnerable.