Company Registration refers to the legal process of incorporating a business entity as a separate legal entity, with its rights and obligations distinct from its owners or shareholders.
The primary objective of company registration is to protect business owners or shareholders from personal liability for the debts and obligations of the company.
Taxation is a crucial aspect of business and financial management, and businesses must ensure that they comply with all relevant tax laws and regulations while also minimizing their tax liabilities and maximizing their financial performance.
Therefore, the following query may arise, “Why do you need to know about Taxation and Company Registration?”
Taxation is necessary to pay the government for the services it provides, while company registration is essential to ensure a business is legally compliant and operates within the law. Knowing about company registration and taxation is important for business owners to ensure they are in compliance and understand their responsibilities.
So, read on to find out!
Why Do You Need to Know About Taxation and Company Registration
Knowing about company registration and taxation is essential if you are starting a business. Taxation is a complex and ever-changing subject, and it’s important to understand the various taxes you may have to pay and the deductions you may be eligible for.
Meanwhile, company registration is the process of establishing a firm and registering it with the appropriate authorities. This is crucial to guarantee that you are in compliance with the law and have the appropriate documentation to establish that you are a genuine business.
In addition to tax compliance, businesses must also comply with various post-registration compliance requirements, such as filing annual returns, maintaining proper accounting records, and conducting annual general meetings.
Company registration is a legal procedure that involves registering a corporate entity with the government to create a separate legal entity that may engage in contracts, own property, and undertake commercial operations
In 2021, the global trust and corporate service market was valued at USD 9275.33 million. By 2027, the market value will have increased by US$ 13539.7 million. CAGR of 6.51% from 2021 to 2027.
How Much Does Company Registration Cost
The cost of company registration varies depending on the type of company, the jurisdiction where it is being registered, and the professional fees charged by lawyers, accountants, or other consultants who assist with the registration process.
In general, the cost of company registration includes government fees, professional fees, and other expenses such as stamp duty, legal documentation, and filing fees.
The cost of company registration in Bangladesh varies depending on the type of company. The government fee for registering a Private Limited Company is around BDT 5,000, and the professional fees charged by lawyers or chartered accountants can range from BDT 10,000 to BDT 50,000 or more.
It is important to note that the cost of company registration is just one aspect of starting and running a business. Businesses may also incur ongoing expenses such as rent, salaries, taxes, and other operational costs.
Advantages of Company Registration
Company registration offers several advantages to businesses, including
1. Legitimacy
Company registration gives your business legal recognition, allowing you to open a bank account, apply for business loans, set up a website, and even hire staff.
2. Limited Liability
A registered corporation restricts its stockholders’ liabilities. This means that the shareholders are only accountable for the debts of the firm up to the amount of their investment.
3. Separate Entity
When you register your firm, you create a legal entity independent from its owners. This implies that the company’s finances are fully distinct from your own, preserving your assets in the case of bankruptcy or legal action.
4. Tax Benefits
A registered company is eligible for certain tax benefits such as corporation tax, capital allowances, and other tax deductions.
5. Increased Credibility
Customers, suppliers, and possible investors will see your company as legitimate and credible if you register it. It implies that you are serious about your business and that it is a reputable enterprise.
Company Registration Service is Based on a Percentage
Services | Percentage |
Incorporation of the company | 50% |
Obtaining applicable licenses and permits | 25% |
Preparing and submitting annual filings | 15% |
Monitoring compliance with all applicable laws and regulations | 10% |
What Is the Importance of Company Registration for Every Business
Company registration is important for every business for several reasons:
1. Limited liability protection
One of the most significant advantages of company registration is that it provides limited liability protection to the owners or shareholders of the business.
2. Separate legal entity
A registered company is considered a separate legal entity from its owners or shareholders. It can enter into contracts, own property, sue or be sued in its own name, and conduct business activities independently.
3. Access to funding
Registered companies can access various funding options, such as bank loans, venture capital, and equity funding, which may not be available to unregistered businesses.
4. Credibility and legitimacy
A registered firm is seen as more reputable and legitimate than an unregistered one. It may strengthen its brand image, attract more consumers and investors, and obtain a competitive advantage in the market.
5. Tax benefits and incentives
Registered businesses can take advantage of a variety of tax breaks and incentives, such as tax deductions, exemptions, and credits, which can assist lower tax payments while increasing earnings.
5. Perpetual succession
A registered company has perpetual succession, which means that it continues to exist even if the ownership or management of the company changes.
Last Words
Company registration is a critical process for businesses that want to establish a formal legal structure, protect their owners or shareholders from personal liability, access funding, and avail of various benefits and incentives offered by the government.
Once a business has been registered, it must also adhere to a number of post-registration compliance obligations, including filing yearly returns, keeping accurate financial records, and holding annual general meetings.
Overall, for businesses wishing to create a formal legal framework, safeguard their owners or shareholders, and improve their financial performance, company registration is a crucial first step.
FAQs
What are the different types of company registration?
The different types of company registration vary depending on the country or state where the business will operate. Common types include sole proprietorship, partnership, limited liability partnership (LLP), a private limited company (Pvt Ltd), a public limited company (Ltd), one-person company (OPC), non-profit organization (NPO), cooperative society, section 8 company (formerly known as section 25 company), and joint venture company.
How long does it take to register a company?
The time it takes to register a company varies based on the nation or state where the firm will operate and the sort of company being formed. It can take anything from a few days to several weeks or even months, depending on factors such as the intricacy of the registration procedure, the quality of the documents, and the processing schedules of the government offices involved.
Do I need a lawyer to register my company?
While it is not required to engage a lawyer to establish a business, it is strongly advised to do so to guarantee that all legal criteria are satisfied and the company is correctly registered. A lawyer or business consultant can offer experienced advice on the legal, financial, and regulatory elements of company formation, reducing the risk of legal and financial obligations.
