Do you register a company or sole proprietorship?

Written by: Dr Audi

"Do I register a company or sole proprietorship?"

This is one of the most common questions we get asked.

I usually say, start with what you have. It also depends on the nature of your business. But if you have money, start with a company.

If you don't, you can start with a business name then upgrade to a private company.

A company has more benefits than a sole proprietorship.

Here are some advantages of a company to a sole proprietorship.

1. A company is a separate legal and financial entity. This means any legal matters will be kept separate from your personal affairs.

2. In case of a dispute, the company is the one that will be sued and not you.

3. When you fail to repay debts, your personal assets cannot be seized to repay debts owed by your business. You can also not be held responsible for the debts.

4. Investors are more likely to invest in a company more than in a sole proprietorship.

5. A company makes a business more serious than a sole proprietorship but however note that branding wins when it comes to professionalism.