When your business is going well, your consideration of business registration to suit its nature of operations is essential. 

There are two types of business registrations: 

  1. Commercial registration by a regular person
  2. Company registration by a legal entity 

For the commercial registration by a regular person:

This type is more suitable for smaller-scale businesses with a single owner, offering straightforward products or services. The advantage of this registration is that the owner is not required to perform accountancy or to submit a financial statement. Owners will have more freedom in managing and controlling their businesses. The disadvantage, however, is that sometimes it can hold less credibility than being a legal entity, hence more challenging to request for loans from the banks. Therefore, this registration is advised for businesses in their starting phase.  

For the company registration by a legal entity:

This type is more suitable for more mature and more structured businesses with multiple owners (more than 3) and shareholders. This registration results in a  ‘company’ with a status of a legal entity, and it will effectively be required by law to perform accounting, pay corporate taxes, and managing social security for its employees, for example. The advantage lies in that the corporate taxes  which it has to pay will not exceed 20% of your net profit, which is a significantly lower rate than the personal taxes of up to 35%. This allows the business to reinvest its remaining profits to grow itself further, or to withdraw them as appropriate.   

There are three subtypes when registering as a company, and in effect, a legal entity:

  1. Ordinary partnership (having 2 shareholders or more)
  2. Limited partnership (having 2 shareholders or more)
  3. Company limited (having 3 shareholders or more) 

Actio offers you business and legal consultancy services.
☎️ Tel. : +66634413368
📩 Email  : info@actioconsultancy.com