Here in Myanmar, there are many young startups who don’t register their company. As they don’t have a registered company, they are not titled under the company. They are titled as freelancers. There are lots of reasons why young startups don’t want to register the company. The reasons are as follows.
The first reason is tax issue. Law and regulation on tax is changing most of the time in Myanmar. Tax on company income, tax on employee salary, etc are boring staffs to do. And if the company is not having a decent profit, the tax is really a bid burden for them. The second reason is legal jobs. Legal jobs in Myanmar is time consuming. People usually have to go on several process to get legal jobs done in registering, taxation, and everything related the company. And some people are just want to work as freelances. Freelancing don’t have impact on company image. It just impact on his own image and impression.
However it is good to have your company registered. If you registered your company you will get the following benefits.
The first benefit is bankrupt issue. No matter bankrupt or founder issue happened, you can solve it out easily just by splitting the amount you announced in the legal contract. When you start the company in Myanmar, you have to show the value of the company. The value is by money. Depending on how much money you put in, you have to pay as a fine to Myanmar government or pay back to board of directors in company which don’t want to work with you anymore. However it is a little complicated then I wrote here. However the concept is clear that if you have your company registered, you have the law backing you.
The second benefit is getting more opportunities. Foreign companies usually check your company background. If you are not having a company, you will be titled as a consultant or a freelancer. The biggest weakness of it is lowing of trust level. People trust more on someone who have an office than who work around in city. The third benefit is relating to second benefit. Foreign companies usually send a big amount of money to companies only. They don’t send to personal bank account. They use company to company system or they will think there will be money laundering problem. The fourth benefit is getting more chance in community. Government and its related organisations usually give free training and other course on each type of business. You can send your employee or you can even go by yourself. The fifth benefit is being able to borrow money from government banks and other banks. Banks and other Micro-finance business are willing to borrow you money if you can show your company. But if you are an individual without a company, it is more hard to get those chances.
There are actually more about it. Comment your thoughts.