When you’re a new business owner, every dollar you spend has to provide a return on your investment. One of those expenses is the registration of your company. While it may be one of those expenses that seem largely unnecessary during the beginning stages of your business, this is far from true. Here’s why:
Protect your assets
Starting a business may be a dream but losing your personal assets that support you and your family are a reality and that reality could turn in to a nightmare if your business doesn’t work out, you’re sued, or another unforeseen financial loss. By registering your business, your business assets and liabilities are separated from each other. There are many other reasons to incorporate but for the protection of your family, this may be the most important.
Do you sell a product?
So you invented a revolutionary new product and you’re selling your product all over the world to tens of thousands of people. Your business seems to be on its way to greatness but then, something in your product causes injury to some of your customers and as a result, lawsuits and product recalls abound and almost overnight, you’ve maxed out your insurance coverage and lawsuits are threatening to bankrupt your company. This is yet another real world example of why the protection of business registration is a must.
Do you need money?
If you are seeking private equity, you must be registered as a business. Investors want the protection of incorporation as well as a defined exit strategy which is defined in some of your incorporation documents. Venture capitalists prefer to fund actual corporations since corporations can later become publically traded.
Want big name business?
Companies large and small prefer to work with subcontractors because they don’t have to pay employee benefits. What they don’t want to do is have long term contracts with individuals since the line dividing a contractor and an employee is blurred when the individual isn’t an actual registered company. Should you be passed over for a contract that could define your first year because you didn’t spend a couple of hundred dollars to register your business?
Registering your business is best left to a business registration service who has experience with the required paperwork needed. This will streamline the process and allow your company to be registered as quickly as possible.
It’s an investment that doesn’t appear to have a direct return on investment but much like insurance, it’s necessary for the protection of you, your family, and any partners who may be associated with your business.