BizBahrain_December_2016

Focus | Trust Formation
Registration, the most basic of recording
- a notification to the authorities that
from now on you will be making and
selling your candles under a specific
name, your business name, and that you
are doing it commercially, to the public
and not just for your closest friends.
A business that is more complex
and carries potentially higher risks
for either failure or other, especially
financial, complications is better run
as a so called “legal person”. A legal
person is what is commonly known as
a company with limited liability. It is
legally considered an entity separate
from its owner and thereby protects
said owners as anyone who holds
shares in such a company can only be
held financially liable up to the value of
his/her contribution to the company’s
capital - the initial financial injection
into this legal person’s wallet.
Company Formation
and Types
by Dr. Alex R. Suchy von Weissenfeld
We have, once again, reached that
time of the year when Thanksgiving
decoration fight over space with the
first Christmas treats in the shelves
of the local supermarkets. Is it just
me or is the year REALLY almost
over once July is done? - it seriously
seems that way or I’m just getting
older.
In either case, I want to use this last
issue in December 2016 to reflect - not
on how many new year’s resolutions
remained unchallenged and are just
being forwarded to January 2017, I
shall leave that to you, but on the
points we have discussed during
the last 12 issues. Some you have
missed, some you may have forgotten
but I hope that my 2 cents worth
overall are useful and if not, at least
interesting and entertaining to you…
Starting up a business, changing
your life and that of your family
for the hopefully better is a major and
very exciting step. When you choose
to make it, you need to get it right from
the start. And that includes the official
announcement to the world that you are
going to run a business.
You do that by informing the local
authorities about your intention and
have your business registered in the
country’s, municipality’s or city’s official
records. Businesses and their owners
are not all the same and so there is a
wide variety of types of recording to
choose from.
If you enjoy making candles at home
or similar pieces of arts and craft and
sell them to people, you may be okay
with a simple Individual Establishment
If your business is growing as you
intend it to do - congratulations. Also,
you’ll soon find that other people will
notice you and potentially want to share
in your success by buying shares in
your company or at least expressing
the wish to do so. If you agree, you
can either increase the company
capital in your existing company and
issue more shares or simply ‘upgrade’
your company to a publically traded
shareholding company. Companies of
this type have shares that can be bought
and sold with great ease on a strictly
controlled market platform, the burse or
the stock exchange, and investors who
see your firm’s performance and want
to support you and benefit from your
business strategies, can freely purchase
and resell shares of your business.
International Bank accounts
Now, what would a company be
without a bank account? As most
businesses are a form of trade, you buy
and then subsequently sell goods to your
clients, money needs to be exchanged.
In times of governments trying to crack
down more and more on people and
businesses trying to avoid paying their
taxes or using their funds to support
organizations that are frowned upon
by most people, using good old cash
48 December 2016