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Why You Need to Officially Register Your Home-Based Business

Why You Need to Officially Register Your Home-Based Business

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Not too long ago, when we of the fairer sex spoke anything about starting our business, what most people naturally thought of is something like a Tupperware party.

Despite the many examples of successful businesswomen and some recognisable female entrepreneurs who are doing some big things, that association of the Tupperware party-type business still pops up quite a lot. This type of thinking is not only limited to the UK however, with catering also coming in as a common type of business which is associated with female entrepreneurs all around the world – that and selling AVON!

Taking nothing away from those types of businesses, if you are indeed venturing into the business sphere in whatever small way, there are a couple of very important reasons why you need to register your operation formally.

Even if you do indeed still host Tupperware party-equivalent events to make some extra money, or if you sell AVON or operate a catering business, it’s imperative to formalise your business through official registration.

Limiting Your Liability

Registering your business operations formally legally separates you from your business dealings and makes your business its own independent legal entity. This does not mean you’re not responsible for what your business gets up to, but what is does is protect your personal assets from being tied to your business.

If your business goes bankrupt for instance or it becomes legally liable for some monies owed, your personal assets will have nothing to do with those of the business and so they can’t get attached in order to pay off the business’ debt, unless of course you choose for it to play out that way.

The legal liability protection offered also extends to incidents such as someone perhaps getting injured “at work,” like an employee getting injured on your premises, even if you’re operating out of a home office or garage. The registered business or company is liable and not you in your personal capacity, so you can’t be sued, but your company or business “takes the fall” instead.

Better Control over Your Taxes

Running your cash-generation operations under a formally-registered business name gives you much better control of your taxes. Having once been a formal employee myself, I now fully appreciate the difference between receiving a pay-slip at the end of the week with a clear indication that income tax has been deducted and having until the end of the financial year to settle my tax bill as part of my business operations.Trust me, having what is effectively an extra £20,000-£40,000 on your balance sheet, which you only have to “pay later” makes a world of difference to the progress of your business and all its associated income generation avenues.

Trust me, having what is effectively an extra £20,000-£40,000 on your balance sheet, which you only have to “pay later” makes a world of difference to the progress of your business and all its associated income generation avenues.

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Catherine
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Catherine

Blogger & Mother at Career Zine
Avid blogger and career path expert who loves to help people fulfil their dreams.Currently raising my family and walking my dog when i'm not on this site.
Catherine
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