Briefly explained below are the benefits of incorporating a company.
Separate Legal Entity
An incorporated company assumes a separate legal entity from the owner or the individuals running it. As a result, the company can enter into contracts, own properties, request for loans as a corporate entity and can also sue and be sued in its own name.
Perpetual Succession
An incorporated company does not come to an end because the owner(s) are no longer involved. As stated earlier, an incorporated company has a legal identity of its own. Hence, entering into contracts or agreements with other companies is done as a separate legal entity. In the event that the administration of the company changes at any point in time, incorporating a company ensures that the company enjoys perpetual succession.
Fund Raising
Upon incorporation, a company becomes an artificial person, capable of doing to an extent what a natural person can do such as raising funds. Incorporation gives credibility to the company, hence banks and other financial institutions will most times not hesitate to grant a credit facility to a registered company.
Additionally, because of the benefit of being a separate legal personality already discusses above, where a company is indebted, the shareholders are not personally liable, because the company is the debtor, hence, shareholders are insulated.
Building of a Reputation with Potential Customers Or Clients
Building reputation especially from customers and clients you have never done business with before is very difficult. Registration of your business gives your potential customers confidence that they are dealing with a reputable organization. If your business is online based and you have the option of customers paying to your company account before you can ship the goods or service to them, then having a registered company together with a corporate account give more credibility and trust.
Account Opening in your Company’s Name
Another great benefit of registering your company’s name is that it assists in the opening of a corporate account in your company’s name. Having a corporate account give you more credibility and trust from your customers, bank, suppliers and other business partners.
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