To Incorporate or Not

When an entrepreneur is starting a business, the first question asked is whether he should incorporate a company or work as an individual. Both options have interesting advantages.

To operate as an individual, one must send a request to the Registrar of Companies for the application of an individual BRN. Once the BRN and Trade License obtained, the entrepreneur can start to operate. Working under an individual BRN is very simple and straightforward. At the end of the year, the entrepreneurs simply send their Income Tax Return. However, in the event of litigation with a client or partner, the entrepreneur is personally liable and has the risk of losing all his personal assets.

The second option is to operate under a company, which I strongly recommend to entrepreneurs. Limited company means limited liability. In case of litigation or in the event of liquidation, the entrepreneur is protected. In addition, it is more socially gratifying to be recognized as the director of a company. It is important to note that operating under a company offers long term visions and growths. However, incorporating under a company requires a structured organization and the company must send its Corporate Tax Return to the MRA by the end of each year.


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