• Fri. May 27th, 2022

The Importance of Standing a Business Legal Entity


Dec 17, 2020
The Importance of Standing a Business Legal Entity

Having a legal entity is an important basis when someone is going to build a business. The existence of a business that is incorporated either on a small, medium or large scale will protect the company from all claims due to the activities carried out by the company, as well as expand the profit opportunities owned by the company.
Even so, in procuring a business, not all are required for an entrepreneur to establish a legal entity. This is an option for them. But certain companies are required to have, such as banks, hospitals, formal education units.

Deciding to have a company that is a legal entity does require extra capital and processes. This is the reason why some businesses or businesses in Indonesia are still delaying the legality and completeness of their company documents. However, according to the extra process, establishing a legal entity will provide many benefits for the business owner, including the following.

Has Legal Protection

A company that has no legal basis due to certain conditions can be sued or discontinued at any time, this is of course very threatening. Having a business entity in the form of a Limited Liability Company, a company will be approved, recognized, and listed on the company list of the Ministry of Law and Human Rights. This means that the name of this company will not be used by other companies.

Clarifying the Separation between Personal and Company Property

Legal entities such as PT have conditions for segregation of assets. So, the company’s financial management will be better, orderly, and have very clear boundaries. This will also allow business owners to have their own savings in the bank on behalf of the company. Also get profit sharing according to what has been determined.

Supporting Professionalism in the Company

Without a clear legal basis, many consumers may doubt the quality of services or products offered by a company. Of course, consumers will prefer companies that are professional and bona fide. That way, the level of consumer confidence in your company will increase.

Make it easy for companies to get additional capital

In the future, as a business develops, it is possible and very possible for business owners to need additional capital to enlarge the scale of the company’s business. In this case, having complete business legality will be very helpful for applying for additional capital from the bank, or inviting investors from within and outside the country. Automatically, creditors such as banks will have more confidence in providing loans if the debtor has a clear business entity.

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