Some time ago my partner just made a co. business legal structure for his online store. Although, it is still not necessary at his small business start. But a business legal structure will be very important in the future. His main purpose of getting a business legal structure earlier was to be able to propose his business as a tender for goods procurement to companies or other agencies in need. Because some time ago he followed a tender of 7 Apple MacBook devices procurement to a university.
Meanwhile, his two rivals are already legal entities, namely Inc. and the other one is Ltd. And fortunately, he won the tender even though at the time his online store wasn’t yet a legal entity. Because at that time he offered the cheapest price. In this case, we can take a conclusion that the main assessment of most clients or businesses isn’t the legal structure.
Companies or business could just perceive on the website only, but the other possibility of winning a tender bidding competition is acquaintance with the target business partner. So, it’s why it’s important to have networking skills.
Maybe the words I will use to explain the different types of business legal structures the language is likely a layman as I’m not an advocate nor a lawyer. But at least I know some types of business legal structures and sharing my business knowledge in a perspective of how it’s important to our business.
Why Getting a Company Legal Structure is Important
Definitely, having your a legal structure for your business would be really important for tomorrow’s tender bidding to be a more established, credible, and prestigious. You can choose one of the different types of business legal structures based on your business capabilities and which legal structure is appropriate to your business. Getting a business legal structure isn’t as difficult as you might think.
And after I finding out more about the organization legal structures, it turns out that establishing an incorporated company will feel more valid in the public eyes, especially your prospective customers. And to be more steady, you then can also make a bank account under your business name. In addition, would be easier for your to attend official exhibitions at national events.
Again, having a small business with its legal status can also easier to get business loans instead of applying it using your personal name. There are also other benefits of having a legal structure for your business.
Well, the above paragraphs are actually just an Intro. Actually, here we are going to find out, what is the difference between Ltd and Pvt. Ltd., the difference between Co and Inc, and so on, by knowing the definition of all types of business legal structures.
Types of Business Legal Structures
So, it turns out that Ltd stands for Limited, Pvt Ltd stands for Private Limited. Both labels are the business forms which its level is equivalent to a limited liability company in the USA with LLC label. In which, Ltd label is commonly used in Canada and Europe countries. While Pvt. Ltd. is a limited company label from India and Pakistan. Pte Ltd a private company label in Singapore, and PT (Perseroan Terbatas) in Indonesia.
Generally, the directors and shareholders of this level of company structure have limited liability for their organization’s debt and the business commonly runs beneath the country’s law. The board of directors of the company pay income tax and the entire enterprise pays tax on profits. This type of company is also called as “private company limited by guarantee,”. In which, the shareholders are the guarantors.
It’s a type of the main company (a holding or the parent company) which has legal status. A corporation has many child companies under it. But even though it’s the parent company, it has different rights and obligations with each of its child or member companies. The differences can also vary, either the form of the business or its core business. In addition, corporations are varied including profit and non-profit organizations.
The company ownership of a corporation is governed by a law and it can not be transferred to the other party. So the shares of a corporation can not be sold freely.
Incorporated Companies (Inc.)
An incorporated (Inc.) company is another corporate business form of the corporation. The definition of incorporated and corporation is almost similar. But the difference is; the Inc. ownership is transferable, and its shares can be traded freely.
An example of a world-class incorporated organization is eBay. It’s the parent company of PayPal, the most popular and credible online payment system. And of course, you fanboys should also know Apple company with its full name “Apple Inc.”. Where Steve Jobs once had a stake in that company.
Companies in General
Co. is a catchall label for an organization of an association doing business together in an industrial enterprise or commercial. Co. stands for Company. Companies that use the Co. label could be limited liability company, sole proprietorship, or corporation. But the Co. label is just like the word company which doesn’t mean its a distinctive company legal form on its own.
A Business Trick with A Business Legal Label
Instead of winning a tender, you can always follow the tendering process of road construction project plans. But winning the tender shouldn’t your main goal. By following a tendering process of a new the toll road or highway map construction project plan, you’ll know where designated locations are business worthy.
Well, I think all new roads would be new business potentials. There are so many ideas to start a new business in such locations. And then buy the land around it when it’s still cheap for your next business plan. It could be reselling the land with a sky-high price after the high way construction has been completed. Or if you have sufficient budget, you can build an exclusive residential. I call this trick as an Indirect Marketing strategy which is targeting a number of businesses that are not directly related to your market.
So, getting started your business with a new legal structure label isn’t only for credibility and prestigious reasons. But your business also has chances to grow and grow.