Summary: Thinking of starting your own company? This article discusses the things you need to do to go about putting up your company, including choosing a classification, the legal requirements, fees, and your legal obligations.
Starting a new company can be very exciting and frustrating at the same time. Exciting because it marks the beginning of your financial independence for the rest of your life, and frustrating because the process is usually harder and more complicated than people think. For starters, you will need to secure all the necessary documents and fill out all the proper forms in order to register your business legally with your city or state. If you are unsure of what to do, the best move is to seek advice from a lawyer or your local government unit.
Choosing a Classification for Your Company
There are many different classifications a company can fall under. For instance, you will have to make a choice of whether to make your company limited or unlimited. With the “limited” option, you can protect yourself financially by limiting your liabilities to a particular amount. On the other hand, the “unlimited” option gives you no such protection. Similarly, you will have to choose between making your company private or public. Private companies are owned completely by the founder, which in this case is you. Public companies, on the other hand, can be owned by several different people and may be open for public trading on the stock market. If you are just setting up a small home-based business, you will typically fall into the private category, and end up with a limited liability company. (LLC).Fulfilling Legal Requirements and Paying Fees
Although all kinds of people all over the world seem to be setting up their own companies these days, there are legal requirements with which you must comply before you can officially become a business owner. For instance, you need to be at least 18 years old because this is the minimum age for entering legally binding contracts. You should also have a good financial standing, which simply means you are not currently in bankruptcy. In addition, companies need to have two directors. You can simply ask your lawyer or a trusted partner to serve as the second director.
As with most legal procedures these days, setting up a company involves paying a few fees every now and then so you should be prepared to shell out money in the process. These fees do not cost a lot, however, so they are not really a cause for worry.
Hiring Agencies to Do the Dirty Work for You
If you do not have the time to handle the registration and setting up of your company by yourself, you can always hire one of the hundreds of agencies out there that specialize in this particular task. Of course, you will have to pay a little bit more for the convenience but many people believe it is worth the additional expense.
Knowing Your Obligations
Once you have successfully established your company, you will have to keep in mind that you now have legal obligations to fulfill. This includes paying annual taxes, giving out a sales invoice each time you make a transaction, and putting up an official sign outside your place of business.
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