Is it feasible For One Person to form a Company?
Are you considering going into business on your own without any employees? There are two business structures which is appropriate for any small outfit like yours: a single proprietorship (sole trader) or a registered company.
While you may consider setting up a single proprietorship, the Corporations Act of 2001 does allow you to pitch a company with just one person to own and run everything. If this is the way you wish to go, then in your situation to do is indicate your choice in the ASIC registration application as “a proprietary company with limited liability”.
You in order to be both the only shareholder as well as the sole director of business. The company is legally regarded for a sole shareholder/director proprietary contractor. You may wonder why anyone would decide either to register as a sole proprietary company associated with as a single proprietorship.
Well, plenty of real advantages to being registered as a sole shareholder/director company. Every potential reasons individuals select a company with regards to a sole proprietorship:
* Legal personality of company.
Once a company is registered with the ASIC and an ACN may be is issued, the company becomes a legal entity along with a personality is actually why independent and separate from the shareholder. The aspect has important facts legally: A company can received contracts in the own name and it will also sue, and be sued.
If a business enterprise is in debt, cash owed doesn’t automatically get to be the debt within the shareholder. As the result, a civil lawsuit for the gathering of an amount of cash against the company is probably not a law suit against the shareholder.
This happens because the liability of a shareholder is restricted to value of his shareholdings unless he previously signed a personal guarantee just the one pursuing a lawsuit. This built-in limitation is not available in single proprietorships or for sole currency traders.
So if you are conducting business by yourself, and you wish to limit your business liability, then sole shareholder proprietary clients are for then you.
* Flexibility in ownership
If your business grows in the foreseeable future and you want to create incentives for your non-shareholder employees who have contributed for the success of one’s company, as well as good way is to better their involvement by transferring shares in vehicle to them.
This likewise known to be a stock option. Because of the company’s structure, you can accommodate non share-holder employees into the particular shareholdings without being required to terminate the legal status of enterprise.
Another associated with the independent personality among the company is it may keep going for the duration of its registration, notwithstanding changes as ownership of the company’s features. The death or retirement to a shareholder or even the sale, transfer or assignment of the rights together with a company’s shares will not mean the termination associated with company’s presence.
You may one day decide to hand over the reins on the company to someone else, such as one of your experienced managers or employee-shareholders. Even you may find a change of directors, the company will still exist as its registered self.
It is worthwhile speaking along with a legal adviser or accountant as to what is the best structure for yourself and your business. Also different countries will often have different legislation on this so check locally also.
It may be accomplished to register a company Online OPC Registration in India, , however, if this is really a daunting prospect for you, there are appointed registered agents, who will advise and manage your own company number.