Many people start businesses today, especially those that provide services online, without registering the business as a legal entity. However, companies, even those that have started up and are run by one person, are bound to grow. In Singapore, the Business Name Registration Act (BNRA) describes the businesses that are required to register and those that are exempted. Businesses exempted include those registered in the proprietor’s name, trade unions registered under the Trade Unions act, societies registered under the Societies Act, and mutual benefit organizations registered under the Mutual Benefits Organizations Act.
A registered business shows authenticity
Clients usually want to feel that they are interacting with a duly registered company that complies with the laws of the country. All certified companies have a name to protect so they will endeavor to adhere to business ethics that will ensure they sell the right products and provide the services under their terms of operation. Clients also prefer dealing with registered companies because details on the business can be verified by the Accounting and Corporate Regulatory Authority (ACRA). It is however not an easy feat to complete on your own. Many companies outsource such business registration and incorporation work to corporate service providers such as: https://prelude.sg/services/company-incorporation-business-registration/
It is easier to get funding
Financial institutions quickly provide funding to registered business as opposed to those that are not. This is one of the first considerations when banks and other lenders look at when looking at loan applications. A business entity that is legally recognized by the government is easily trusted more than an unknown entity. Additionally, for a business to benefit from government programs that have been established to support companies, especially startups, including financial programs, it needs to be registered. For example, Enterprise Singapore offers financial and non-financial assistance to registered businesses.
Increased opportunities to transact with the government
When starting a business, many people have a narrow perspective of their client base. Fortunately, even though startups mostly target a particular business model, they are not static. Businesses revolve to be more encompassing as they gain ground and become a brand. Registering the company at a later date means the company will lose the years it took to grow since it will be considered a new entity. The government of Singapore only does business with registered companies. For any company to participate in government tenders, it needs to be registered.
Business registration shows proof of the company’s experience
Have you ever wondered why companies endeavor to indicate when they were incorporated or registered? This serves as a notice to any potential clients questioning the expertise and experience of a company they are thinking of using to meet their needs. It is natural for one to equate the period since registration to imply the company is more experienced. Certification also shows the company is ready to meet its legal obligations, including payment of taxes.
Many clients would rather deal with a business entity that is registered and meeting its tax obligations, especially if it is earning a profit. A registered company has a higher chance of progressing and growing to levels the proprietors never thought possible when they first formed the company. Although most of the success is through hard work and persistence, working through a legal framework helps tremendously.