The need to Know Information about Limited Company Formation

Why go for limited company formation rather than sole investor or partnership company formation?

The key benefits of limited company formation are to the people who are in control of the company activities. If something were to go wrong these people are not held responsible. However, if it is a case of fraud, whereby the company decides to do business beyond the scope of registered business or any business transaction which is considered illegal by the law, the owners and shareholders of the company will be held personally responsible through court order.

If the owners were to be sacked, 香港開有限公司 pass away, decide or stop working for any reason, the company will still continue to exist and allowed to trade. On the other hand if anything goes wrong in a sole investor or partnership type company, all parties active in the company will be held personally responsible without exemption.

Another major benefit is their accessibility to acquire government projects through tenders, as most government projects and even some large scale project are merely opened to limited companies for tender as they would like financial stability and credibility. In addition, limited company has higher marketing company profile to make it safer to sell the company in the future.

As limited company It will be easier to involve potential investors to help raise capital funding for the company by giving shares or selling shares to them rather than coming up with a complicated partnership agreement. This is so, because you have an overabundance credibility and openness towards the investors, supplier and customer. Concomitantly, there is also the increase readiness of large organizations to deal with limited companies as oppose to the rest.

Moreover, there is clear power structure and legal documentation overseeing company formation that clearly states to decide that will have the authority in managing the company. Thus, helps to minimize conflicts or differences within the company. Any major argument or issues are handled appropriately and professionally through the right funnel, AGM (Annual General Meeting). While any differences within the sole investor or partnership business were to occur, there are no proper channels to end differences. This may end up ugly for the parties involved as emotions are allowed to fly uncontrollably.

Limited company has flexibility of managing income to reduce tax. There may also take advantage of tax bonus depending on their industry. You have a chance to shield yourself when dealing with large inventory purchases or trade. You should note that after the end of any limited company formation, there is no time frame dependence on the company as to when to commence business or trade. Along, this allows you to secure your company business name for your future business interests.

During limited company formation, there will be legal documents (e. grams. MA(Memorandum of Association) and AA(Articles of Association)) you need to fill and provide information such as company name, business nature, location of operation, director’s authority, and shareholder protection under the law. There is more paperwork and cost in a limited company formation but the advantages of running a business is worth the time and money.

After completing the limited company formation, the company will go through companies act and business laws and practices that is dictated by governmental body, Company House and in some places also known as Registrar of Companies (e. grams. Scotland). The executed business laws, practices and companies acts towards the limited company will respectively following the country that the company is registered.

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