Advantages of the Corporate Structure
A company is a legal entity created separately from those who own and operate it. As a separate entity, the company's debts and taxes are separate from its owners (shareholders), thereby, offering the greatest personal liability protection of all business structures.
A company is an artificial "legal" person. It is owned by shareholders who have limited liability (i.e., they are not personally responsible for the company’s debts). A company is run by directors.
Because the company continues to exist even after the death of a shareholder, it offers tremendous estate planning advantages. In addition to liability protection, incorporating offers attractive tax advantages, better financing and the ability to raise cash.
The main advantage of a Limited Company is to separate business risk from the shareholder's personal assets and a possibility to limit the amount of money that a business proprietor owes personally.
A Company allows shareholders to limit their maximum possible liability for the debts of that Company to the amount of the paid capital in the Company. If a shareholder holds hundred $1.00 shares in a Company, that shareholder's liability for the company's debts is limited to $100.00. Shareholders are only liable for any unpaid shares and any debts that have been personally guaranteed. That's in contrast to the position of a sole trader or partner in a firm who is liable for the debts of that business unlimited.
Whilst there are still common law grounds for the protection of an unregistered name, forming a Company is a way to formally register a Business name and therefore notifying the world of a name's existence.
Once the Registrar of Companies approves the Comp ...