The legal and administrative aspects of starting a business
Starting a business is an important and exciting decision, one that opens up entirely new opportunities but also one that will present unique challenges to the founders.
When taking as big a step as starting a business, it is important to think about the legal and administrative aspects of doing so.
These include, but are not limited to, choosing a name and a business form and following through with the registration process. These steps need to be followed for the business to function according to law. Here’s where to start.
1. Choose a name and a business form
The name of the business needs to be a unique one and this is a legal requirement irrespective of the country in which investors choose to set up the business.
A preliminary name check can be easily performed with most local company registers. The business will either have or lack a legal identity, according to the chosen business form.
This has string legal implications in terms of liability for the founders and it is advisable to make an informed choice.
The private limited liability company is often used because it allows for a limited degree of liability and it has legal capacity.
2. Register the company
A legal requirement is to register the company with the local trade register or company registry.
Some simple business forms, without legal capacity (such as the sole trader), will require a simpler registration procedure. The requirements regarding the steps for company formation will differ according to the jurisdiction in which the business is incorporated.
For example, some locations are known for their pro-business policies and the easy company formation procedure, such as that in Singapore.
Vlad Cuc, is Director of BridgeWest, a company formation agent. Vlad has over 15 years of experience in advising clients who wish to set up their own companies or who need consulting related to various legal issues.