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Since there is less scope of satisfying these conditions under the sole proprietorship business.
Business Registration must be done within one month from the date of commencement of business. The registration procedure involves 1. Selection of an appropriate business name. It is important to keep the following factors in mind while choosing a business name: 1. A sole proprietorship may be registered with an English name, a Chinese name, or an English and a Chinese name.
For a Chinese name, you may include English alphabets, but not English words. The name should not suggest that the business is incorporated with limited liability. Complete application form, including proposed business name 2.
There is no legal separation between the owner and the company. What is sole proprietorship business? As the name suggests, the business is owned and operated by a sole person. Since the business is not a separate legal entity, the owner and the business are considered one entity.
Its advantages and disadvantages are listed here by Asia Business Centre (asiabc.com.hk). A lot of small businesses operate this way because the owner can continue with any decision as soon as they think of it. The owner and the business are considered one. This enables the company to acquire assets, go into debt, enter into contracts, sue or be sued in its own name. Since sole proprietorships do not enjoy a separate legal identity status, the sole proprietor is responsible for all business debts and liabilities.
In other words, the owner has unlimited liability and there is no protection of personal assets (including personal property). Limited partnerships are comprised of general and limited partners. While limited partners are not personally liable for any business debts incurred by the firm or the wrongful acts of another partner, general partners have unlimited personal liability. In the case of limited liability companies, the liability of members to contribute to the debts of the company is limited to the amount of their investment in the company and does not extend to personal assets.
The business ceases to exist on the death of the sole proprietor. Limited liability companies have a continued existence notwithstanding the death, resignation or insolvency of shareholders or directors. For sole proprietorships, the only source of capital is the sole proprietor’s personal finances and business generated profits. Often, due to limited working capital, business growth and expansion can be hampered.
Sources of finance include loans from partners, taking on new partners and bank loans extended on the basis of combined assets of all the partners.
Furthermore, a strong public perception makes it easier for limited companies to secure bank loans when compared to other types of business entities. However, the rates of tax vary for different business entity types. Ownership of the company can change hands by selling all or part of the company’s total shares, or through the issue of new shares to additional investors.
Legal documentation is not complicated and business operations are not impacted. Since only one person is accountable for all business deals, this entity is the least preferred for serious business. It is difficult to raise capital and attract high-caliber employees or senior level executives who usually look for owning a share of the business. Like sole proprietorships, limited partnerships also do not have a very high standing in the eyes of the public when compared to private limited companies. Large organizations and people in general are more comfortable dealing with such companies and this makes it easier for the business to conduct transactions and grow.
It is also easier to attract senior management and top notch employees to join the company. There are no legal formalities involved. The role played by directors is substituted for by general partners.
The process of closing a companyis complex, time consuming and expensive and applies to both limited partnerships and private limited companies. The sole proprietorship business and the partnership business will be treated as the same business. Learn more about the application procedures for new business registration as well as renewal and cancellation. Hong Kong follows a territorial basis of taxation.
Sole Proprietorship throughout the basis period for that year of assessment. Instant Downloa Mail Paper Copy or Hard Copy Delivery, Start and Order Now! One alternative to a sole proprietorship is to instead incorporate a private limited company.
Businesses other than corporation (e.g. sole proprietorship or partnership businesses) must make their applications within one month of business commencement. When you engage Kaizen to register your sole proprietorship business, please follow the procedures described below. The person runs the business on his own without sharing his business with anybody.
He gets all the profits of the business, but he also takes up all the risks of the business.