Starting a business requires the owner to decide over the type of structure that he considers the most suitable. Obviously, this represents a difficult choice because each option comes with advantages and disadvantages. In this and any other situation, knowledge is the most useful because stepping on an unknown field is quite dangerous and you would not like to bear the negative consequences of your wrongful actions. Therefore, it is important to do a little research concerning every type of business structure and make a decision that will bring you benefits on the long term.
Sole proprietorship practically means that a single person carries all the obligations and responsibilities that owning and operating a business brings. Even though he benefits from full control and gains the profits, he also deals with liabilities and taxes meaning that a creditor has the ability to claim personal and business assets in order to cover any debts. The process of Singapore business registration is not as difficult and expensive in comparison to other types of organization forms.
The main and the most obvious difference between a sole proprietorship and a partnership is that the latter involves two or more partners in charge with the management. They combine their financial resources and use them for the benefit and development of the business. This means that they also have to divide the profits in compliance to the legal agreement. Usually, this form of organization does not enjoy limited liability. In addition, finding a suitable and reliable partner is quite difficult.
The term “corporation” refers to a separation between the business and the shareholders. Obviously, this includes many advantages including the fact that they will no longer be personally liable for any obligations or debts. Furthermore, they can raise capital and transfer the ownership easier. Various companies like the one at companyregistrationinsingapore.com.sg can help owners incorporate their business and enjoy the same benefits. However, you should be aware that the process is expensive and challenging.
Private Limited Liability Company
Thanks to the advantage of limited liability, this type of nosiness structure is quite common and popular on the market. It stands out from other entities due to the “LTD”, “Limited” or “Inc.”, depending on each country’s legal system, which appears after the business name. These types of companies can own various assets and act just like individuals by having the possibility to lend or borrow money and even sue. The owners have the freedom to transfer or sell the company to another individual.
Public Limited Liability Company
There are many similarities between Public Limited Liability Company and Private Limited Liability Company but the main difference is that the shares of the first one can be bought or sold by the public. In order to form such a company, various people must fill in documents describing the purpose of their association, membership and capital. United Kingdom and several Commonwealth countries call this type of organization PLC. This abbreviation is like a clue that informs people that the company is public.