“For we must be one thing or the other, an asset or a liability, the sinew in your wing to help you soar, or the chain to bind you to earth – Countee Cullen” Its one of the most important issues a company has to deal with before stepping into the world of business to protect themselves from keeping their personal assets separate from the liabilities of the organization they have created.
The business has to be separated using the Companies act where the personal assets of people like directors, stakeholders, employees etc are not under risk is the company goes bankrupt or is winding up business. There are many Limited company advantages which help contractors, partners, suppliers and other professionals have better confidence in the organization because of the laws that protect both parties in the contracts they have between each other.
There are many tax benefits that come under the Limited company advantages that they can enjoy if they opt for this option. There are many businesses that opt for being a sole trader or have a partnership but that leads towards many problems which make people end up using their personal funds into the business which is not good for business. It has a great option that allows them to maintain less administrative paperwork compared to a corporation who has to track every transaction. This can be set up by just one person involved in the company, and it is not mandatory to have more than one to have this option. This system has allowed many people to feel safer while doing business in the world, and free their minds from additional liabilities that would keep them from achieving their long term goals that would be beneficial for humanity in return.
The limited company advantages also helps protect people who are involved with the company with cross liability which shields their property to be dissolved for the payments of debts if the time of bankruptcy comes. Only that property that belongs to the company will be dissolved to pay back the debts that may arise due to possible dire situation in the future.