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.
The ideal business location will depend on several factors; however, taking into consideration the overall incorporation requirements can be one of these important criteria when choosing where to start the business. Unfortunate events or mistakes can jeopardize the evolution of the business.
In situations that involve small business mistakes as well as in those that have to do with the business managers, such as drunk driving, the assistance of a team of criminal defence solicitors can be very useful.
3. Obtain permits and licenses
Another important legal administrative step is to make sure that the business functions per the local laws for regulated sectors.
This may not apply to all types of companies, such as holding companies, however, companies in the financial services sector or the accommodation and construction sectors – to name just a few – will need special permits and licenses.
Why registering the business is important
Making the necessary registrations for tax and permit purposes as well as observing the legal aspects concerning employment regulations are important irrespective of the chosen jurisdiction for the company.
Setting aside the needed time to understand these legal administrative conditions is important for making sure that the company is compliant and functions according to law.
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