Starting a business is a very big deal. While it may seem easy enough to get started there are many factors that go into running a successful business, and one of these is having a company registration number. A company registration number is a vital part of the business lifecycle, which you should consider to be an essential part of your business. Here are just some of the reasons why you need a company registration number for your business.
To Become A Limited Liability Company
Even if you want to run a business on your own, there are certain legalities that you have to go through. In some cases, it might be better for your purposes to form a limited liability company and you need to register with the Companies Registry to get limited company status for your business. A limited liability company is a company that has a legal identity separate from its owners. It can have shareholders, but these shareholders cannot be held responsible for the debts of the business. In a limited liability company, it is the business itself that is being sued by creditors. A limited liability company still needs a registration number in order to operate legally and to pay taxes every month.
To Be Identifiable
It helps ensure that your business has a separate identity from any other businesses with the same name and allows you to set up accounts in the future using the registration number. This is important when it comes to banks, suppliers, and customers. It will also be useful in the future if you decide to close down or sell your company’s business division that you originally registered.
For Tax Reasons
Another reason why you need a company registration number is that it allows the government to track and collect taxes from your business. Each month, you need to file a tax return which is essentially a report on the financial performance of your business. If you don’t submit the reports at all or if you submit them late, it can result in penalties and fines. It is only if the revenue department knows where to find you that they can assess your company’s assets and liabilities at any given time and this information will allow them to determine how much tax you are liable to pay. It also allows you to claim tax deductions or set up a system for establishing how much tax is payable by the company.
To Go Through The Legal Process
Running a business comes with many legal issues. Some of the most common ones include:
Business Contracts
Business contracts, such as those for selling goods and services, hiring employees, need to be in writing so that both parties know what they are agreeing to. Without a company registration number, it becomes difficult for you to go through the written law process and present your case if there is any conflict between you and another party. Also, contracts, where you purchase properties, need to clearly state the terms of the agreement. If you are not registered with the government when acquiring assets for your business, it is very difficult to establish the terms of the agreement.
Consumer Protection
If you are running a business that deals directly with consumers, there are many consumer protection laws. This means providing certain disclosures to your customers about your products or services before they make the purchase and refunds and warranties in case of damages and failures. If you don’t have a company registration number, it becomes difficult for you to give this notification and these disclosures to your customers. You might end up in a legal jam or not be able to deal with consumer complaints and take appropriate action.
Licensing
There are many licenses that you need to apply for in order to start a business. Some of them include selling alcohol, entertainment, and certain types of food and drinks. All these licenses need to be re-evaluated at regular intervals and this can only happen if your business is registered with the relevant authorities. Without a company registration number, it can be difficult to get these licenses in place and you might end up running your business illegally.
Getting A Loan
Loans are another important aspect of business life and they allow you to acquire funds at a lower interest rate compared to other loans. When applying for a loan, your bank will ask if you have the appropriate authorization to run your business and this includes a company registration number. If you do not have one, they might reject your loan application and refuse to provide you with financial assistance.
In conclusion, a company number is one of the most important things you need when starting up a business. It allows you to go through business contracts, consumer protection laws and enables you to get loans at lower rates than if your company is not registered.
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