Getting started in a new professional activity is a big step for everyone, but getting started in setting up a business or a startup is even more challenging.
It is a question of mastering the administrative, finance and legal fields, which is not necessarily within the reach of everyone. This is the reason why it is better to consult a chartered accountant, who knows all the secrets of starting a business, especially regarding the choice of legal status.
So how can he advise you?
Why should you opt for the support of a chartered accountant for a startup?
Before launching a startup, regardless of its field, it is absolutely necessary to collaborate with the right people in order to leave nothing to chance. Thanks to such a professional, you’re able to know all the procedures you should follow.
The role of a chartered accountant is to guide clients in terms of accounting, administration, or the choice of legal form, which is crucial.
That being said, it is important to know that the functions of an accountant during the launch of a startup is essential because they offer very good advice during the planning steps. Indeed, accountants can develop an effective plan because of their skills, thus driving the project to its success. An entrepreneur can understand all the available opportunities of their future business, especially in terms of potential sources of capital. In addition, thanks to the advice of the accountant, it is possible to know financial regulators with whom the startup will work with.
So these are some of the benefits of hiring an accountant.
What are the legal statuses proposed by a chartered accountant for a startup?
The process of establishing a company must follow a specified route such as choosing its legal status, with or without the help of an accountant. This is a somewhat complicated area for a first-time entrepreneur, and so the need to work with a chartered accountant.
The accountant will be able to explain in detail all the legal requirements for startups such as:
- Sole proprietorship
- Limited liability company (LLC)
- Nonprofit organization
The sole proprietorship is the easiest business one can start because it has a single owner. All the income and expenses of this type of business are included in the owner’s personal income tax record. The downside of this type of business is that the owner is personally liable for the business’s liabilities.
A partnership business is owned by multiple people. It can be a general partnership where the owners are responsible for the debts of their business or limited partnerships where the investors have no control of the day-to-day running of the business and are thus not subject to its liabilities.
A limited liability company (LLC) has no limitation on the number of shareholders and any member or owner can have a full participatory role in the day-to-day running of the business.
A corporation is a complex business type that is fully independent. A nonprofit organization is a type of business that is tax-exempt and uses its profits for charitable purposes. On the other hand, a cooperative is operated and owned by members using its services.
Additionally, the accountant will tell you about the debt and liability of the type of business you choose, how to file taxes, look for partners and investors, hiring employees and more.
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