When registering a business in Singapore, many entrepreneurs struggle to figure out the best way to register the company. There are advantages to registering as a sole proprietor, a partnership, or a company incorporation. When you choose to incorporate your business, you are technically forming a corporation that is legally independent of the owners. Once your business has gone through company formation in Singapore, it can do pretty much what people can do. This includes owning property, signing contracts, filing lawsuits, and having bank accounts.
Your business is considered more credible
When you incorporate your business, you give it more credibility. Corporations are considered more stable financially and structurally. Business associates, clients, and vendors tend to trust incorporated enterprises more than unincorporated ones. A company with “Corp.”, “Inc.” or “Pte Ltd” is perceived to be more stable, permanent and credible. It shows that the company is looking to go the extra mile to succeed and become a brand.
Protection of personal assets
In a sole proprietorship or even a partnership, it is difficult to differentiate where the company ends and where the owners begin, especially when it comes to ownership. Often, you will find personal properties like cars being used for official reasons. Once a business is incorporated, the lines are no longer blurred. The corporation functions as a separate legal entity. A corporation is responsible for its debt, and should issues arise, creditors will seek payment from the assets owned by the corporation, as opposed to going for the shareholders’ property.
Seeking financing as a corporation is easier
Corporations can issue shares of stock when there is a need to inject more funds into the business. Raising these funds is easier, especially if the corporation is popular and is considered a worthwhile investment. It is also easier to seek financing from lenders, such as banks, using an incorporated company as opposed to using other business entities. Incorporated companies tend to have more than one option when it comes to financing to expand the business.
Gives business owners privacy and anonymity
Many business owners do not like their names associated with their business. Some people would like their companies to grow independent of the influence they can exert, or they do not want their wealth to be looked at in relation to the company’s success. Several corporations have been in existence for years, but nothing is known of the founders. If you would like to separate your personal life from your business, a great way of doing this is through company incorporation.
A chance for perpetual existence
Have you come across companies that were established in the early 1900s and wondered how they could survive all these years and remain relevant today? This is what happens when a business is incorporated. It becomes a legal entity that is independent from the owners. This allows for continuity even after the death of the founders. Sometimes, changes in the ownership do not affect the stability of the company since it is operating independently.
Incorporating your business may require more paperwork and has more demands financially and legally. However, the benefits far outweigh the challenges.