What are people's on a business being registered as a company or if the business is online, then should they just not register since it is far easier with the finance etc? What's the advantages of being a registered/incorporated company, compared to just using a business name with no incorporation?

Alan

A registered company is only liable for its initial investment.

EG:

You invest $10,000 into your company and go bankrupt with $100,000 debts, you are only liable for $10,000

If you are not incorprated and you go bust with the $100,000 debts you had better get running cos alot of people are going to be wanting that money back :D

I don't see how you can get $100,000 of debts though, LOL. Why would you only be liable for $10,000 if you're a registered company?

Btw, if people from the UK who are already registered as a company, I'll like to see your views, since I'm based in the UK. I'm interested how complicated it makes things when you're registered as a company compared to running the business with 'just a name'. You've got to give an official address for the business, how many of you work from home and contact other people in the management team via the net?... do you put your home address as the offical business address?? Is that even safe to do so? LOL.

But I'm also interested in the US side, since I can possible register a company in the US instead.

Alan

to start with, yes, im in the UK :-)
and yes its easy to get £100,000 in debt just go to the bank and ask them for the money. :-)

If you do get into troubles you are only liable for what you initially invest, id suggest going to your local library or book shop and reading up on the FAB of being a LTD company.

If you go bankrupt you will be struck off and BANNED from being a director of another company for a period of time.

In essence if you go bankrupt with huge debts as a limited company its like having your debts insured.

You will have to register your company in the UK with companies house and also in the USA and your company trademark does not stand abroad.

hope this helps. maybe someone else can offer some input as im going to bed !!

Originally posted by xtstrike
A registered company is only liable for its initial investment.

EG:

You invest $10,000 into your company and go bankrupt with $100,000 debts, you are only liable for $10,000This may be the case in the UK, but it would be a mistake to take such a cavalier approach in the US. There are quite real circumstances under which a director of a corporation (director in the legal sense; a member of the board of directors) might be faced with personal liability in such a circumstance.

Basically, you have to act in good faith and show fiduciary responsibility to both shareholders and debtors. Don't go into incorporation thinking you can run up massive debts and declare bankruptcy and run away; you will very likely find yourself in court if you do so.

You should also realize that it's very common in the case of a small, new corporation for the owner(s) to have to sign agreements that specifically assign personal liability to them. If you start a new company and take out a 10-year lease on office space, for example, there's a good chance you'll have to sign on that way. Similarly for some loans, large equipment leases, etc.

Here`s the dumbest, stupidest question anyone has ever asked....can anyone just go and get a $200,000 loan from the bank?

Originally posted by Frosty
Here`s the dumbest, stupidest question anyone has ever asked....can anyone just go and get a $200,000 loan from the bank?

Do you believe in Santa Claus? :D

Here`s the dumbest, stupidest question anyone has ever asked....can anyone just go and get a $200,000 loan from the bank?

Yes, if you have enough assets. You might be thinking, if I have assets why would go to a bank - right? Don't ask me why - that's how banks do business.

My company is Registered in UK.
The main point is mentioned above, as you only work for the company you are not liable for the companies debt.
Also it is easier to get credit with suppliers and other companies and it also gives you more credibility.
You could get 100,000 in debt if you were for example sued for something. (It could happen)
Please do not incorparate just so you can run up debts, or incase you run up debts and cant pay them back. That is not the idea.

jgriff64, how many employees do you have? (you can PM me if you don't want to say it in public)

Can the registered office be a PO Box number? Since registering a residential home address seems a bit stupid.

What about tax, finances? Do you hire an accountant to do all that?

I'm wondering what all this would cost, what's the fee's invoved, since start-ups would not have too much in the bank and would not expect much profit until after 6 months or a year.

Alan

Also, jgriff64, I was wondering how you went about registering your company, the same question applies to any other UK companies too?

Is it possible to be able to run a successfull company without being registered?

Alan

Depending on state if you're in the US, it's not that much to register an llc. In my state only $75 to register and $25 per year to keep it. Not that bad to me.

I think the price was about £65 to register the company, although the people that did this for us dont seem to be in business any more. (their web site has gone).
The price included all the share certificates, certificate of incorparation and The Memorandum and Articles of Association.

http://www.alimited.co.uk/index.php do it for £95 but look around you may get it cheaper.

With regards to tax, you need to register seperatly with Customs and Excise.
You dont have to unless you are turning over more than the alowed amount but if you are getting credit or supplies, for example mobile phones, they would ask you for your VAT reg number.
We have a collegue who is a charted accountant who does our tax returns so that is not a problem.

Not sure if you can use a po number, would not of thought so. The registered addresss does not have to be the trading address so you can put your residential address, it is the address your Articles and memorandum and things should be if some one from the authorities wants to come and check

well, since I am in India so some points may not apply with you, but generally these terms apply with most of companies.

benefits of registration as a company.

1. when you register and forum an company your business get legal status in your country. You may be benefited for tax, excise and local taxes as a registered company. In India we have tax holidays for 5 years for registered IT companies before somewhere in 2000.

:bawling: I missed it.

2. If you are registered company (private limited) and want to go for public limited company then you may be able to create faith in share holder and investors.

3. Some Large companies and government agencies deal only with registered companies, so if you are not a registered company you may not be considered at all.

4. As told before by one of our member, If you are registered company you are only liable upto the paid capital of your company, in case of debts. Also you are limited to liabilities mentioned in your memorandum of association and articles of association.

5. Many times it is easy to get financial assistance in case you are a registered company.

6. It feels good to have (DIRECTOR / MANAGING DIRECTOR ) on your visiting card and name plate. :D

Negative points of registration as a company.

1. You have to submit your audited books of accounts with registrar of companies. Fail to do so you will be liable for fines (it is like that in India I don't know about your country). :o

2. You have to comply with local authorities and tax departments, excise and sales tax people will find you more easily since you are registered company. :D

3. You MAY have to pay higher amount of tax (in India its around 10% high) to government.

4. YOU CAN NOT perform any action or business activities other then mentioned in your memorandum and/or articles of association. (in India this apply).

5. You have to call annual general meetings of share holders and directors meetings from time to time. Also approval of certain directors is required to take any action.

ABOVE ALL if you are grown much or planning for big plays then go for Formation of companies because usually this helps.

I will keep adding points when I remember them. :)

edit: more points and typos removed.

Thanks, I've just PM'ed you asking questions to those answers, so jut ignore it.

It's still possible to just run the company not registered for a while until it gets big right?

Like a lot of people on the web just run the websites etc without making a proper company out of it, anyone agree??

Alan

Originally posted by ho247
Thanks, I've just PM'ed you asking questions to those answers, so jut ignore it.

It's still possible to just run the company not registered for a while until it gets big right?

Like a lot of people on the web just run the websites etc without making a proper company out of it, anyone agree??

Alan

i fully agree with you. Since registration involve cost of registration and stamp duties and goverment fees, its better to keep hands out until you are fully grown and have strong future plans. :)

mahinder, thanks for all those points, they actually do help, even though I'm in a different country.

I'm now wondering how much it costs to get an accountant to do the tax returns and that, or is it not that hard, can you use something like Microsoft Money to keep track of the tax returns for you?

Alan