Is Company Formation Right For Your Business?

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Is Company Formation Right For Your Business?
Within the UAE there are only several formats in
which to operate your business. The type of
legal business structure that you choose
will depend upon your personal circumstances
and the type of business that you operate. Most
new businesses that are operated by a sole
proprietor have only two options. They can either
start business as a sole trader or choose to form
a limited company.
The simplest format to operate is that of a sole
trader business. The instant that any person
starts to sell goods or services they are
essentially a sole trader. There is no
official register for this type of business. The
only responsibilities that you have are to tell
the tax authorities that you have started trading
and to keep accurate accounting records. Sole
trader status is popular for business start
ups as the administration is limited and
closing the business is relatively easy. This
provides greater flexibility if the success of
the business is uncertain. Forming a limited
company is an alternative to operating as a sole
individual. Operating your business as a company
adds credibility and can protect the business
owners from
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any potential liabilities. As a sole trader you
are responsible personally for the acts and
omissions of the business. For example, if your
business were to be sued for an amount of money
that it could not afford, the individual is
personally responsible. Their money, their home
and even their possessions could be seized to
repay the business debt. With a company it is the
company that is liable for this debt and not the
business owner. The owner of the company is
protected from the liabilities of the
company. There are also tax benefits when
operating a company. Under exiting tax
regulations most limited company owners withdraw
funds from the business by dividend. This can
help reduce the tax paid but it is
recommended that you seek advice from an
accountant or bookkeeper who will be able to
discuss your personal circumstances. Starting
your own business will require many important
decisions along the way. If you have any doubt
whether to operate as a limited company or as a
sole trader it is always recommended that you
seek professional advice. Hana Corporate Services
is one of the main corporate business specialists
situated in UAE. From new organization
arrangement to the powerful advertising,
from the occasion the board to everything
that supports another business. We gives
certain legitimate customs that should be
satisfied before setting up the business Article
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