21/02/2023
WHY INCORPORATE YOUR BUSINESS?
Incorporation is the process through which a business is registered to a separate legal entity under the Companies Act. The registered company name usually has the name 'Limited' at the end.
The advantages are:
1. The registered entity is a separate legal entity separate from its director(s) and shareholder(s). This means the company can own assets in its own name, sue or be sued in its own name, and operate independent of the owner(s).
2. The shareholders have limited liabilities in the company. That means in the incidence of debts and taxes, the shareholders are only liable to the extent of their shares in the company.
3. The company has a perpetual succession status i.e. it continues till the unforeseeable future unlike humans who die.
4. Ease of valuation during equity financing. An equity investor usually provides capital to a company based on its value. The unit of value in a company is a share. A share has recorded value known as par value and a market value for its shares which is usually higher than par value. This helps the company to be easily valued as opposed to a sole proprietorship.
5. Ease of sourcing for capital for operations. The owner(s) of the company can sell some of their shares to new owners with the new owners bringing in capital.
6. Ability to do business and get debt financing easily. A registered company is one of the legally recognized entities in Kenya. This helps third parties like other business partners and financial institutions to easily trust the entity for making bipartisan agreements and contracts.
MicroAid SME Consulting assists individuals or groups to formalize by registering them to co-operatives, private limited company, public company, business name, Self-Help-Group or Community Based Organization.
Our entity also trains entrepreneurs, helps you with registration requirements, and then holds your hand in matters to do with banking procedures.
For more inquiries talk to: Samuel on 0723 732122.
