In simple terms, registering your business is the process of obtaining legal authorization to conduct business within your chosen jurisdiction. It ensures that a business is operating under the lawful obligations of its control. When you hear the term LAW and associate it with business, we tend to think of taxes, and government policies etc. At least, I can relate as I instantly became mentally stressed out when I hear what I have to do to start my business.
However, the first thing is, we must accept that as an entrepreneur, we have to get use to the regulations, policies and procedures that are set out by the government. The fact is, if you are going to do the right thing as it relates to creating a good structure for your business, you have to “go with the flow.”
Here are the basic reasons as to why you must register your business:
Establishing Business Bank Accounts
You need to provide proof that your business is properly registered with the government to open a business bank account. A business bank account is an important asset to a small business because you can separate your personal activities from your business activities. It is also more professional to give your clients a business name for payment instead of your own full name.
When you apply for small business loans, you're going to have to prove that you are actually a business. Lenders and investors will ask to see your business registration along with other application requirements before approving you for a loan.
Reputation With Customers
I’m sure as an entrepreneur you want to be perceived as a reputable company. Customers and clients, especially people you've never worked with before, need assurance that you are a legitimate business. A potential client may suspect your business of being a "fly-by-night" operation if your company is not registered properly. When a business is on file with the government, it could put your clients at ease when making a decision about whether to spend money with your company.
A registered business also makes you eligible to receive supplier benefits that you would not normally receive as an unregistered operation. Example, if you plan to try to get government contracts for your company, a business registration is one of the first requirements.
A business registration allows you to hire full-time employees and pay them in accordance to the law. If you plan to hire employees, it's best to take care of registering your business with the government before you even start the search for workers.