droppbuy. with – The strengths and weaknesses of business ownership is the answer? Regarding business. Therefore, you should be able to choose a form of company, whichever is suitable for the business you are going to run. Like the strengths and weaknesses of business ownership.
So if you choose the wrong form of company. So it could be that the business you are running is not profitable.
And instead of being profitable that lasts a long time, it can be a loss. So, if in the end you can just go bankrupt, in running the business.
Well then here we recommend it. That there are several things you should know when running a business, such as the strengths and weaknesses of business ownership.
Also Read: Inspiration Of A Business Style Tool For A Career Woman That Is Rich In Twists
Strengths and weaknesses of business ownership
The forms of a company that are commonly used to run a business include:
- Companies in the form of Individuals as (Individuals)
- Companies that were in the form of CV (Company Limited)
- A company formed by PT (Limited Liability Company)
This time we will discuss the advantages and disadvantages of individual companies. Or what is referred to in taxation as a private person, and as for the tax aspect.
On the advantages of companies in the form of (private persons) are as follows?
Read too: Learn more about the Diploma in Information Technology
- Establishing an individual company (Personal Person) is very easy or not complicated. Typically, licensing requirements in local governments are lighter.
- And for individual companies, it is suitable for a relatively small business. Or those who already have capital and also a limited line of business.
- It does not require a formal deed (deed by a notary). For the establishment of a business, of course, it is necessary to ask the local government for permission. Also for the owner, there is no need to spend a large amount of money.
- Had freedom in a matter that made a decision. Both determine the direction of the company as well as issues related to a company’s finances.
- Regarding regulations. Therefore, there is no need for many government regulations that regulate this type of business, and the owners are free to carry on their activities.
- And for the tax, the owner does not need to pay the corporate tax. Even so, everyone for income must still pay individual (Personal) taxes.
- For the question of income by a company that has been in the form of individuals. Then it will become the owner can also be used freely by the owner.
The disadvantages of companies that have been in the form of individuals (individuals) are as follows:
Also Read: Mitsubishi Pajero Mini Coming in 2024
- Getting capital from an outside party (bank) will be difficult. This means that if an individual company wants to obtain additional capital or investment, or a loan from a bank, it is relatively difficult, and especially for a larger amount.
This is because a sole proprietorship is considered less credible.
- Regarding the issue of individual companies, it is relatively difficult to participate in tenders that have been organized by the Government (Treasury of Governmental Bodies). BUMN (State-Owned Enterprises), BUMD (Regional Owned Enterprises) are also large private companies. Because they have difficulty meeting the requirements for completeness of documents or the amount of funds/capital that are already available.
- The owner of a sole proprietorship (individual), who is responsible for the company’s debts in full or with other obligations.
- The survival or life of the company is relatively shorter. So this is caused by difficulties in finding a replacement or successor for the manager of the company and if the owner passes away.
Then there’s a vacuum that made the company’s survival come to an end.
- Then the company will be difficult to grow. If you are using the sole proprietorship form, and so it is due to the difficulty of running a business that is only in one hand.
So if you want to grow a company. So you have to change a company form first, so that it becomes a Business Entity in the form of a PT (Limited Company) or CV (Limited Liability Company).
- Because the administration of a company is usually not well managed. Due to the lack of effective oversight of the business owner. So for that it made it difficult to find documentation of every transaction.
Also, sometimes all transactions are not supported with documents that should be required. So in the end, the company’s development is difficult to know precisely.
Tax Treatment of Companies that Formed Individuals
Also read: Uniqueness in the insurance industry that few people know
Companies that were incorporated as individuals or under taxation are called individual taxpayers. They also already have tax obligations, which are almost the same as those of a company that took the form of an Entity (PT or CV).
Taxation rights or obligations for a company that was incorporated as an individual (individuals include:
- What if a company that was formed by an individual is established. Therefore, you must register to become a Contributor by obtaining an NPWP (Contributor Identification Number). No later than 1 (one) month after the company has actually carried out commercial activities.
- Whether income or sales of taxable goods (BKP). Also Taxable Services (JKP), in a tax year exceeding Rp. 4.8 billion, registration is mandatory to become a Taxable Entrepreneur (PKP).
- If you received a TIN. So, the next obligation is to file or declare taxes owed to the Tax Service Office (KPP). Whenever the registered taxpayer is in compliance with the tax obligations contained in the SKT (Registered Certificate), which was received from the Tax Service.
Also read: What is the difference between a business email and a business letter, see the explanation below?
- For all types of services that have been provided by the Tax Services Office. Even those provided can be used free of charge by taxpayers.