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5 Things to know before formation of company

Formation of company

Whether you have been operating a sole proprietorship or a partnership, the formation of a company is something that can be complex. It must be performed with some level of understanding. Formation of company can be beneficial as it, to a great extent, cushions the assets of the directors or investors from the company. The company gets to stand as a legal entity, and that opens room for funding and growth. It can be made available to the public through the sale of shares.

Here are some of the things to know before formation of a company:

Work with a professional firm

Formation of company can be quite involving. From carrying out a name search and arriving at the ideal name, engaging the registrar of companies, attaining forms/documentation to be filled and signed, the tasks involved can be quite overwhelming. Instead of choosing to do all that by yourself, you should consider engaging a professional service provider as they have the level of expertise and experience required to undertake such tasks. 

A corporation requires funding

Unlike a partnership or sole proprietorship, operating a corporation will require some level of funding. Formation of company requires that some setup costs be met, and funds will be required to dissolve a corporation fully. Other tasks, such as engaging a company secretary, local director services, and such may attract additional costs. Before you consider the incorporation of a company, funding is a key factor that should be taken into consideration. 

Engagement of knowledgeable professionals

Unlike a partnership or sole proprietorship, you should consider engaging professionals when considering formation of company. Since there are legal requirements and statutory returns that should be made on specific dates, it’s advisable that you engage professionals who understand such tasks and are also capable of executing them well. Working with a professional firm such as onestop-ca.com can be of great help as it gives you access to professional staff that you can work with as you get started.

Preparation of articles and memorandum of association

Before you engage in the formation of company, you should be aware of some of the critical requirements and articles and memorandum of association are some of the documents that will be prepared and signed by the parties involved. As much as you can engage a professional to help with such, having some background knowledge of what it all entails and the requirements can make the whole process to be a lot more efficient. 

 Personal assets may be protected or not

 A lot of business people consider formation of company so that in case of failure of the business, it doesn’t end up affecting their assets. While it is what the corporate law states, it all depends on how the directors indulge in the company affairs. If they mingle personal assets with business finances, then such protection may not happen. We must consider engaging professionals who can help with the operations and provision of advice when it comes to the process of a corporation.

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