Why Registering Your Business Should be a Priority!
Many young people are in a rush to make the money, the moment they get a business idea. You source for the fastest income possible to set your business running and forget a crucial legal step. Registering the business. You were probably told the registration process is quite lengthy and going to waste a lot of your time, so you end up postponing each week.
Before you consider postponing to another week, these points will show you what you are likely to face each time you choose to skip this legal process;
There are two ways to this, one; you can’t get any serious work done with any other company without registering your business. Companies only come into agreement with others that are legally considered companies or businesses. Secondly, your clients will only enter into an exchange with you knowing you aren’t legally registered. Therefore, without registration, your business is bound to crash.
Limited Liability Privilege
On registering your business you get to enjoy the privilege of limited liability. This means even when your business crashes in the long/short run, the team doesn’t get to suffer the consequences. On registration, the business becomes a separate legal entity, any damages in the process do not affect the owner(s).
Sourcing for Funds
Today, many startups look at sourcing for funding from banks, savings and credit corporations, foundations, and many others. You will get to understand that potential funders will only be in a position to fund your business only after registering it.
Inability to Initiate a Lawsuit
The law indicates that a company cannot bring suit in a court of law unless it is registered to do business. The court may issue a stay until such time as an unregistered company qualifies, but the decision to do that is at the court’s discretion.
Uganda Revenue Authority penalizes companies monetarily when they do not register in a timely way. Paying all back taxes and fees from the time the company began doing business is a common requirement and they may also add penalties and/or interest.
Opening Business Bank Accounts
If you are to open an official bank account for your business, you will need to be a fully registered company. It’s not only more legitimate and professional to use a business account name rather than a personal bank account but a must in the line of business. Big clients will not transfer funds to personal bank accounts while doing business with you.
With that stated, you should understand, it is important to properly register and make the required filings to maintain that registration to avoid a number of negative consequences and penalties. When setting up a business, it is recommended that you seek the advice of a business lawyer. This will ensure that you choose a business structure that meets your particular needs taking all of the facts into consideration.
Want to Register your Business?