There are many entrepreneurs who still forgo registering their business or company. The reasons vary. Number one perhaps is that it’s too time consuming to register a business or they feel they just do not need it. Others are just waiting for their profits to become stable before registering. Ironically, it is hard to grow a business if you’re operating outside the formal company set up.
Becoming legitimized by having a registered company or business has many advantages.
5 Benefits of a Registered Company
- Helps you avoid legal problems with the government.
- Secures your reputation as a legitimate company.
- Builds trust among suppliers, customers, and employees.
- Allows you to fully market your brand and business everywhere.
- Opens opportunities to do business transactions with large companies.
Have testimonials to convince potential customers that your business is trustworthy. Once your business is registered, it is easier to convince people they can trust you with their money and their business.
Show customers you have nothing to hide, and that you’re always happy to help. That way they’re more confident in your company.
When you own an authentic company, you’re not afraid to offer services like warranties, returns, and exchanges. Your customers will certainly appreciate these.
Not only are customers annoyed by seemingly avoidable legal hassles, can also give your company a bad name and negative feedback for your products.
How to decide whether to Register a Company or a Business Name.
A company is legal entity with its own character like a person. E.g. It can own property and other resources in its name.
A company can be sued and held liable separate to the owner, but a business can be sued together as well as the owner at the same time
A company can own a business name under it e.g. Tada Holdings (Pty) Ltd can own Tada Cleaning Services or Tada Car wash. These businesses are registered and owned by the same company. When you advertise the businesses or on official documents it will be Tada Holdings (Pty) Ltd Trading As Tada Car Wash.
A company files annual returns at CIPA and pays P500 annually. A business does not pay any returns but only confirmation of its existence every 3 years and pay P500.
A company needs to appoint a company Secretary within 3 months of registration as per the Companies Act.
You can register many business names under one company but you cannot do that with a business.
A company can be registered in more than 1 country.
A company can be listed on the Stock Exchange thus becoming a public company. For example Tada Holdings Proprietary Limited as a private company after meeting the requirements of the Botswana Stock Exchange (BSE) and the listed name becomes Tada Holdings Limited.