Why Is It Better To Have A Company Rather Than Partnerships And Sole Proprietorship?
Most individuals do not understand the complexity involved in business and would assume that being prim and proper with sprinkle of honesty and hard work would solve everything and you will be successful. But, people often forget it is a competitive world and businesses are epitome of competitiveness and sometimes pettiness. However, with the right business choices, you can save yourself from becoming lost in the competitive business world.
Rationale to choose being a company
Before going into the reasoning to go for a company, it is important to understand any type of business institution has its own risks involved and that cannot to be forgone. However, when you chose being a company rather than going for a partnership or sole proprietorship, there are several good outcomes for the owners which will be discussed below.Legal personalityCompanies have their own legal personality. This is one of the specialties’ of registering as a company. For those of you who are legally dimwitted, an institute which has a legal personality can present itself as an individual without an actual person being held liable. For example, if you are hiring a third party bookkeeper like Xero bookkeeper Melbourne, your account will be held under your companies name instead of one of the partners as seen in partnerships.
Board of directors
This is one of the advantages of having a company is that you have a board of directors who will be involved in decision making processes. For example, if the company is bleeding money and the company directors are not sure about where the mistake is happening, then they will decide which third party company they can ask to come and audit their company. They also have a deciding power in bigger decision when it affects the company’s reputation or productivity.
Access to loans and funds
It is important to have a quickbooks bookkeeper or the reckon bookkeeping to maintain the bills collected by the company. They are important while making a financial statement through an accountant. Financial statements are important factors which make or break your company while applying loans or while looking for investors.Apart from this, there are several other advantages that companies have over partnerships and proprietorships; like; the directors are not held liable in case of bankruptcy whereas partnerships and sole proprietorships have a personal liability in case their business goes south. Moreover, most of the tax money is generated from companies in any country whereby there are several loopholes in the company law in every country. There is also huge tax benefits involved in running a company.
