Advantages of registering your own company

There are many people enjoying certain income coming from various activities without registering their occupation officially. Although the regulations for small companies differ from one country to another, the majority of governments require paying taxes, which is the major reason why many people who could be enjoying sufficient income do not decide to register their activity. Indeed, in some countries, taxes can be rather large.

Still, there are a number of advantages of having an official company that you should be aware of.

Avoiding punishment for not paying taxes

Undeniably, the most obvious advantage of offering one’s products or services officially is a feeling of safety. Even though some people manage to work illegally for years, this can be rather risky especially if their occupation is based on contacts with several clients.

There are many possible scenarios in which the information about your illegal business can reach the tax authorities. You do not have to advertise your products or services everywhere in order to get into such a situation, albeit, this automatically means, you cannot advertise your business at all as you never know who can find your advertisement.

Anyway, you can get into trouble no matter whether you have satisfied clients or not. Those, who did not like the quality of your goods or services might be willing to tell about your business to the authorities whereas those who were very satisfied could unintentionally spread the information about you. the worst thing is that you will never know when the person visiting you happens to be a representative of the tax law enforcement.

The consequences of maintaining unregistered business can be rather serious. Everything depends on the country, however, this activity can be seen as an economical crime and you will definitely have to pay for it. Usually, governments are using the following rule. They calculate the amount of taxes you were supposed to pay for a period of several years which again, depends on the exact country you live in. On top of that, you will have to pay a fine. Still, in some countries the consequences might be even worse, whereas your situation will definitely be even more aggravated if you happen to be living abroad without a status of a citizen. It does not matter whether you are staying in the country legally or not, as foreigners are always treated more harshly. Usually, not paying taxes leads to deportation.

Easier procedure for getting a bank loan

This point is crucial, however, you should realise, as a rule, it is generally rather difficult to get a bank loan. Thus, this point does not mean registering your enterprise activity will allow you to get a loan. It will still be rather difficult, albeit you will at least have an  official status of occupation that might make the process easier for you.

Possibility to give receipts

There are many customers who might be eager to pay less not being bothered by the fact there is no physical evidence of their payment that can be used as a warranty for purchasing a good or service as they are aware of the fact they are paying less as the person who provides them with it does not pay taxes and has a possibility to decrease the price.

Still, in the case of more expensive purchases or some services that might somehow have serious consequences for a purchaser, for example impact on one’s health, people are not ready to pay for these items if they do not have any opportunity to get any official document, which can act as a warranty. It is especially true when people need a receipt that will prove that they have really paid for this item and that they can get any legal help in case they are not satisfied with this good or service.

In such a case, if a person has registered a company, he or she will have an opportunity to give the potential clients receipts and this will make their business look more professional to potential customers. In addition to it, this will boost collaboration with other companies, whether they are potential clients or someone who would like to become partners. It is very difficult for other companies to cooperate with any person who is working illegally even if this person has some exceptional quality of goods or services. Again, in such a situation, it is very helpful to register a business in order to have access to potential partners.