Incorporating a business brings a certain degree of credibility to the establishment. Customers and future business partners are more willing to trust businesses that are properly established since it guarantees to them that this business is legitimate. Not to mention that the advantages of incorporating a business often includes incentives or subsidies from the government, enabling owners to manage and run their business in a more productive and cost-efficient manner.
How to incorporate a business? There are different guides to incorporating a business that can help walk you through the process, but generally, it has the same three steps, namely:
Selecting a name
A name encapsulates what your business is about. It represents your mission and values to your audience. Choosing the right name is essential.
Always remember to check with your local business registry body on whether the name you have selected has been registered or trademarked by other entities. For example, in Singapore is done through the Accounting and Corporate Regulatory Authority (ACRA)
Selecting a location
As mentioned above, one of the advantages of incorporating a business often include government tax incentives or subsidies to attract companies into opening their business in a particular area. This means that you can reinvest a bigger portion of your cash flow back into the business instead of paying taxes. In turn, you provide employment opportunities for residents and economic betterment in the place where you open your business. Recently, we covered the five best Asian countries in which to open or expand your business.
Before one decides to incorporate a business, they must first have enough capital to run it. Capital refers to the amount of money needed to set up and run your business. Funding can be achieved in several ways, such as through venture capital or several angel investors that believe in your company’s vision and its growth potential in the future.
These investors are called shareholders, signifying that they own a stake or shares of the company. Such ownership comes with a few privileges, such as voting rights relating to the company’s needs. Shareholders vote to elect a Board of Directors, who set policies with the best interest of the company in mind.
Nowadays, the members of the Board of Directors may also be shareholders, especially for small and medium-sized companies, unlike a public company where the shareholders are typically institutional or retail investors.
Incorporating a business might be in your best interest as it offers benefits that can be beneficial down the road. However, incorporating your business is not a one-and-done process; it can be complex and time-consuming, especially if you don’t know where to start. We hope that this article can be helpful to you in your incorporation journey.
Are you looking to incorporate a business in Singapore? Our team at Lanturn is more than willing to help you get started!