Did you know that the simple act of formalizing your company through a corporation can be the boost you need to take your business to the next level? Imagine a world where your entrepreneurial ideas become a safe and prosperous reality, where growth opportunities multiply and business advantages unfold before you. In this article, we will reveal the best-kept secrets of corporate formalization and how it can transform your business trajectory.
Colombia has a diversity that allows entrepreneurs to have different options of companies to formalize, and they can choose the one that best suits their needs and the activities they will carry out in the market, with the most used being the corporation (S.A.) and the simplified stock company (S.A.S.).
Thus, by having various corporate types and choosing one to formalize, the entrepreneur will create a separate legal entity that will become the ideal legal vehicle to achieve the growth and development of their business, and to obtain certain benefits, which we will explain in this article.
Thus, with the creation of a company, it is easier to join efforts and capital for the development of an activity in the market that achieves an impact and successive growth. For this, the people who decide to join, called partners, establish rules to follow in the operations of their economic activity, indicate their rights, obligations, responsibilities, how decisions will be made in the direction of the business, and other aspects within the legal framework.
Also, the entrepreneur's assets are separated from those invested in the business, that is, in the company. In this way, partners protect their personal assets, and the company has its own to carry out and answer for its operations, which means that in the face of its obligations and creditors, partners do not have to answer with their personal assets, with their liability limited to the contributions they made to the company.
Furthermore, although there is a separation of assets, partners obtain a benefit proportional to the investment they make, at the end of each period, thus receiving the so-called profits, coming from the returns that the company has obtained in its activity, and which are distributed once the corresponding operations have been carried out, such as payments of obligations to third parties, for supplies, merchandise, and others necessary to maintain the company's activity.
Similarly, when formalizing and growing as a company, it is essential to provide confidence and security in the market, to consumers, creditors, suppliers, institutions, and others to establish a relationship, carry out joint operations, invest, and other actions that allow the company to continue growing, which can be achieved by carrying out the activity within legal guidelines, and having internal rules that guide the direction of the company. Likewise, by obtaining such trust, credibility is generated, making it easier to access financial credit and loans from banking entities, with better interest rates and negotiation position.
Another aspect is the continuity of the company, something that is achieved through a solid and enduring structure in the market such as the company, in which even if its partners change, it is maintained according to what has been agreed in its bylaws; and hand in hand with this continuity, it is possible to create a sustainable corporate image that makes the company identifiable to third parties.
Similarly, by existing as a company, it is possible to receive tax and financial benefits, since some companies can access special tax regimes, in which advantages are obtained such as the deduction of taxes, business expenses, reinvestment of profits, and the possibility of obtaining other tax benefits for promoting business development.
Now, in the labor field, hiring employees, who are key to the development of economic activity, is facilitated by entering into service provision contracts or employment contracts where security is provided to the worker by affiliating them to the social security system, with benefits such as health, pension, and occupational risks, being supported in the fulfillment of their rights by the company as a legal entity and not by the partners as separate natural persons.
In that sense, the formalization of a business into a company offers entrepreneurs and partners involved a series of benefits that allow developing a solid and enduring business in the market under legal protection against both partners and third parties, such as: separation of assets, limitation of liability, access to financing and investment, tax benefits, hiring of workers, growth, image, recognition, and trust that ensure the necessary bases for the sustainability and success of the company in the long term in the market.