For a businessman, sometimes there is a need to convert its business into another larger entity. In this case, it can be a sole-proprietorship converted into a partnership or soleproprietorship/partnership converted into a limited company or public company. In this article, append below the pros and cons of converting one’s business:-
| ADVANTAGES of sole-proprietor or partnership to convert their business into limited or public company: |
- Enjoy limited liability satus;
- Enjoy economies of scales;
- Easier to raise finance;
- Have larger prospec of future growth and expansion;
- Able to diversify and spread the business risk and
- other reasons
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| DISADVANTAGES of sole-proprietor or partnership to convert their business into limited or public company: |
- Accounts must be audited;
- Taxation aspects must be looked as larger amount of taxe to be paid
- Business needs to comply with the rules and regulation of the Registrar of Companies
- In the case of public company, there is the larger costs of making sure corporate governance is established ( audit committee, non-executive directors,etc)
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This entry was posted
on Monday, October 22nd, 2007 at 6:27 pm and is filed under Business Conversion.
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