In a registered company,the legal entity is separate from the owners. For instance, if a firm is unable to pay it’s debts, your assets can not be sold to clear the bills because you are a shareholder. The liabilities for the shareholders are limited. This means that, all rules and regulations are made by the shareholders. This is different from a sole proprietorship where the owner has full responsibility.
A company is either owned and operated by a single person or by many shareholders. You can own property in your company’s name rather than using your own name. It’s easier for a registered firm to attract capital investments compared to partnership due to limited liabilities. There is easy transfer of ownership and control of shares. The existence of the shares act allows a shareholder to sell or buy more shares. Share capital also allows the firm to include new shareholders.
However, the establishment of a large company is difficult and also very expensive. In case you decide to quit the firm, you will leave the shares and the company’s assets to the other shareholders. Sometimes, you will be allowed little or have no contribution in the firm’s affairs especially if you are a minority shareholder.
The process of selling shares to other shareholders is difficult compared to a company owned by a single person. Decision making is not easy and, it’s only passed when voted by the majority. The cost of registration is relatively high compared to a partnership. There is ongoing costs of business name registration after every two or three years and, it’s usually higher than the original registration fee in addition to other ongoing costs such as accounting fees.
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Mary Mukami Gachonde Researches and Reports on Finance. For More Information On How To Get Out Of Debt, Visit Her Site At OUT OF DEBTYou Can Also Post Your Views About How To Get Out Of Debt Here REGISTERED COMPANY
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