A single-member company is the most natural form of business when the entrepreneur works alone and he or she has a permanent location for sales, purchases or similar activities and exercises business in the form of a company. A company is part of its owner's business and financial resources.
When setting up a company, there is little paper work and other related duties, a registration and an announcement for the tax authorities on starting a business. In a single-member company an entrepreneur has got unlimited liability, which means that the person is responsible for his operations with his entire personal property. In practice this means that the person takes a big economic risk when starting a business.
Many of those who intend to become entrepreneurs justify choosing a single-member company with the fact that the scope of business will be small and there are no great losses to be expected. Many people also wish to try it out first with a single-member company and thus gain experience. When the business grows, it is easy to turn a single-member company into another form without heavy consequences as comes to taxation.
Overview Forms of Company |
Unlimited partnership |
Limited partnership |
Limited company |