The RAKEZ company setup process guides you through the company setup process. It guides you through a simple process to complete startup. When a company is registered, it becomes a legal entity and can perform:
- receive loans
- issue shares
There are several types of startup businesses that include:
- limited liability partnerships
- limited liability company
- initial public offerings (IPOs)
- business combinations
Each type of startup has different requirements for:
- running an operation
- paying taxes
Why It is Important to Choose Company Setup Type?
One important aspect of the company setup is choosing the type of incorporation. You have two choices:
- standard incorporation
- partnership incorporation
Most startup companies use standard incorporation. Standard company setup allows for limited liability, taxation of the profits, and designation of the company as an S corporation or a C corporation. In addition, standard company setup does not allow for incorporation of domestic or foreign corporations.
Select the Startup Registration:
After company setup, the next step is to select which type of startup to register: C corporation or partnership. After selecting either company setup option, entrepreneurs must next select the type of funding they plan to raise. In most cases, entrepreneurs use debt capital for startup operations, while some also use equity capital for Shams free zone license. If an entrepreneur does not have enough equity to qualify for debt financing, he may apply for a cap table loan from the local credit unions or investors.
Setup Business Model:
Once entrepreneurs have selected a type of startup for incorporation, they need to select the type of business model they intend to use in their company:
- Sole proprietorship
- limited liability company (LLC)
As discussed earlier, the sole proprietorship and partnerships require startup capital; sole proprietorship requires entrepreneurs to provide their personal assets to the business whereas limited liability company allows for partial financing by the owners but guarantees that owners will lose their ownership in the business upon its failure. Finally, a corporation provides greater flexibility for funding and better tax advantages.
Once all of these steps are complete, entrepreneurs can begin company setup. Company setup requires significant amounts of time and money. In addition, business setup demands that startup entrepreneurs research several funding sources and choose the one that offers them the best return.
Because it is expensive to incorporate, many new startups choose to utilize the services of attorneys instead of personally providing capital to the business. However, because an attorney can represent both the startup company and potential investors, they typically offer startup entrepreneurs the best professional negotiating power when negotiating with funding sources.