Video: 5 Benefits of Registering a Company

Sep 22, 2016
Reading Time: 3 minutes
Written by Zachary Swan

Are you considering whether it is the right time to register a company? Setting up a company can be an easy and stress-free experience that offers a range of benefits and greater legal protection.

Join LawPath’s Head of Legal Dominic Woolrych as he covers the 5 key benefits of company registration.

At LawPath, we make registering a company quick and easy, with a 100% online registration process. We also have a range of bundles and additional services to help protect your new company from the get go.

For more information on company registration also check out our infographic on why you should register a company.

5 Benefits of Registering your Company

Video Transcript

If you are starting a new venture or looking to grow your business, you may be considering whether it’s the right time to register a company. Setting up a company can be a relatively easy and a stress-free experience that offers greater legal protection. By registering your company, your business can begin to operate effectively, and comply with Australian law.

Here are 5 benefits for registering your company

1. You can limit your personal liability

As a sole trader or partnership you are legally responsible for all aspects of your business, including any debts or losses. If you sell a defective product, make an error or suffer an injury during the course of your business, you will be personally liable. This can result in the loss of your personal assets such as your car and your home. A company is a separate legal entity and is an easy way to protect your personal assets from your business actions.

2. Minimising your tax liability

In Australia, the current tax rate for companies and small business is lower than the highest tax rate for individuals. As a sole trader you are taxed at the same rate as an individual. If you are in a higher tax rate, registering your company may significantly reduce your tax burden. Companies and small business are also entitled to a number of tax deductions.

3. Avoid conflict with your founders

Registering a company helps immensely when conflict arises between founders. When you register a company the company owners are limited by the number of shares purchased. The owner will have a clear understanding that their investment in the company is determined by the number of shares they own and not a pre-determined verbal or written promise.

4. Enhance your brand image

Think of the biggest brands in the world today; Google, Nike, Facebook. All are registered companies. Registering your company enhances the reputation and perception of your business. Accountability is also established through the structure of your company.

Becoming a register a company is also important for any future dealings with third parties, as many businesses will only hire or engage with registered companies. With the parties entering into an agreement with the company instead of the owners.

5. Raise significant capital for your business

As a company, your ability to attract investors and raise money for your business will be a lot easier. Registering your company gives you the ability to borrow and incur debt but more importantly, sell shares and raise capital. If you had any other business structure, you would have to pay taxes at your personal tax income rate.

Raising money can be essential for the development and expansion of your business, and it is preferable for investors to invest in a registered company rather than a sole trader or partnership, mainly because they know that there is a formal structure in place.

At LawPath, we make registering your company quick and easy, with a 100% online company registration process. We also have a range of bundles and additional services to help protect your new company from the get go.

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