the advantages of operating as a company
The advantages of operating a business as a limited liability company as opposed to a sole proprietorship:
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| After registration the company possesses legal personality; in other words it is an entity legally separated from its shareholders. |
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| The company, as an entity with legal personality, has powers to act in a broad range of areas permitted by law and by the company's object. A company can, for example, sign contracts, buy and sell within the ambit of its business activity, sue and be sued and even be held liable for infringements of legislation. |
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| As an entity with legal personality a company is liable for its own debts. Shareholders, managers or directors are not generally liable in regard to the company's obligations. If a company records a loss, it will have to cover the loss via its own resources and not by means of the personal assets of its shareholders, managers or directors. |
| Thus, the shareholders only bear losses up to the value of their initial contribution to the company's capital. |
| Managers assume liability before a company's creditors when the company's assets are not sufficient to cover the respective credits and when said fact results from the infringement of their legal or contractual duties. |
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| Unless the company's articles of association establish otherwise, the company has unlimited duration, irrespective of the death or legal incapacity of its shareholders, managers, directors etc. |
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