Are you considering going into business on your own without any collaborators? There are two business structures that may be appropriate for any small outfit like yours: a single proprietorship (sole trader) or a registered company.
While you may consider setting up a single proprietorship, the Corporations Act of 2001 does allow you to get going a company with only one person to own and run everthing. If this is the way you need to go, then all you have to do is indicate your choice in the ASIC registration application as “a proprietary company with limited liability”.
You become both the only shareholder as well as the sole director of organization. The company is legally regarded as being a sole shareholder/director proprietary small business. You may wonder why anyone would decide either to register as the sole proprietary company rather than as 1 particular proprietorship.
Well, there are some real advantages to being registered as a sole shareholder/director company. Here are some potential reasons individuals pick a company of every sole proprietorship:
* Legal personality of company.
Once a firm is registered with the ASIC along with an ACN has been is issued, the company becomes a legal entity along with a personality can be independent and separate looking at the shareholder. The aspect has important facts legally: A professional can start contracts in its own name and this may also sue, and be sued.
If a business enterprise is in debt, the amount owed does not automatically become the debt of the shareholder. As the result, a civil lawsuit for the product of a sum of money against group is not ever a legal action against the shareholder.
This is that the liability of a shareholder is restricted to value of his shareholdings unless he previously signed a personal guarantee and only the one pursuing a lawsuit. This built-in limitation isn’t available in single proprietorships or for sole sellers.
So if you find yourself conducting business by yourself, and you desire to limit your enterprise liability, the actual sole shareholder proprietary company is for then you.
* Flexibility in ownership
If little grows in the future and will need create incentives for your non-shareholder employees who have contributed into the success of the company, started to be good method to increase their involvement by transferring shares in a lot more claims to these individuals.
This furthermore known being a stock route. Because of the company’s structure, you can accommodate non share-holder employees into the corporate shareholdings without being required to terminate the legal status of organization.
Another advantage of the independent personality from the company is that it may continue to exist for the duration from the registration, notwithstanding changes as ownership of the company’s stocks. The death or retirement to a shareholder or the sale, transfer or assignment of the rights to be able to company’s shares will not mean the termination with a company’s existence.
You may one day decide to give over the reins with the company to a person else, because one of one’s experienced managers or employee-shareholders. Even when there is a change of directors, the company will survive as its registered auto.
It is worth it speaking using a legal adviser or accountant as coming from what is best structure on your own and your organization. Also different countries perhaps has different legislation on this so check locally as well.
It can be to register a company Online One Person Company Registration in India, but if this can be a daunting prospect for you, there are appointed registered agents, who will advise and manage your own company number.