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Registering
your business Why should
you register your business? There are many reasons. Firstly, if
the name of your business is registered, no one else can use it
for their benefit or to your detriment. Secondly, you
need a registered business if you wish to open a bank account or
to obtain bank facilities to carry on your business. Thirdly, if
you wish to bid for tenders and register yourself as a supplier
of products or services, business registration becomes a mandatory
requirement. In addition
to all the above reasons, the fact that you are a registered business
provides a firm foundation on which to build your credibility among
prospective customers, clients and business partners. It is proof
that you are serious in what you are planning to do. So, what sort
of business should you register? In Sri Lanka, there are four main
business structures that are recognized by the banks and other financial
institutions. They are, the sole proprietorships, partnerships,
cooperative societies and limited liability companies. The simplest
form of business is a sole proprietorship. If you take on business
under this structure, your financial risk extends to all your personal
and family assets. This means, that in the case of an inability
to pay for your business obligations, you are required by law to
even sell your personal assets and settle the debts. On the other
hand, it is very simple to obtain a registration and the formalities
are less rigorous as compared to registering or carrying on a partnership
or a limited liability company. A registration
can be obtained from the Registrar of Business Names at the Provincial
Council of your area. You can register the business in your name
or under any other name that you wish if it complies with the rules
and regulations. The second
type of structure is a partnership. Simply put, a partnership is
an agreement that a group of persons draft to carry on a business
activity for profit. A partnership can have a minimum of two partners
and a maximum of 20. All partnerships
require a partnership agreement that is written or verbal. A written
agreement will be immensely useful for you to avoid misunderstandings
and can save a lot of trouble and loss of friendships. A partnership
agreement needs to include clauses on what each partner puts into
the partnership by way of money and assets, what their return should
be for all they put in-interest and other payments, what they are
entitled to as salaries and allowances, the deductions to be made
in calculating the partnership profits, the ratio to use in splitting
profits among the partners and when and how the partnership is to
be dissolved. A partnership
needs to be registered under the Business Names Act of 1990. Like
for a sole proprietorship, you need to register your business with
the Registrar at the Provincial Council to which you belong. To obtain a
registration, first you must pay and obtain documents and make an
application to ensure that the name you wish to register has not
been registered previously. Then, you must
file the forms required to register your business with the Registrar.
All partners need to sign on this application. Once the requirements
are fulfilled, the registrar will issue a business registration
certificate. This must be displayed at your place of business. A partnership
makes the partners jointly and severally liable for meeting the
obligations of your business. Still your financial risk extends
to your personal assets.The third type of business is a cooperative
society which must be registered with the Commissioner of Cooperatives. The fourth
type of business you can register is a limited liability company.
When you register a company, with others, you become a shareholder.
"Limited liability" means that you are liable for the
debts of your company only to the extent that you as a shareholder
have taken shares. We will discuss
the registration process for a company and the types of companies
in the next article. If you have specific questions on choosing
a business idea or starting a business, we look forward to hearing
from you. You can reach us on ft@sundaytimes.wnl.lk
or call on 074-304112. The writer
is the Managing Editor of Athwela Vyaparika Sangarawa (Athwela Business
Journal), the only Sinhala management monthly targeting the small
and medium sized business operators and its English version, Small
Business International magazine. Ceylinco
Savings launches new leasing service A specialised
savings bank under the Ceylinco Consolidated umbrella, Ceylinco
Savings Bank offers personalized banking services to customers at
their own premises. The doorstep leasing concept, further strengthens
the banks' services line up while the doorstep leasing facility
also falls within the ambit of the banks' declared mission statement,
a bank statement said. The Leasing Service provides lease finance for all types of vehicles, heavy equipment, computers, office equipment and specialised machinery. Since the bank sends its own executive to the customer, all details and documentation required to speed up the lease processing time is immediately collected, if available. Cathay
Pacific announces full-year results The group's
much improved performance came from increased passenger demand,
strong growth in the cargo business and the success of ongoing efforts
to increase productivity and reduce operating costs, it said in
a statement. Overall passenger load factors reached record levels
while first and business class demand however remained weak. The airline's cargo business enjoyed sustained growth throughout the year, spurred by high demand for Hong Kong exports in Asia, Europe and, in particular, North America. Cargo Operations to Europe were strengthened by new services to Milan, Brussels and Manchester, it said. CTC
sets new standards "This
landmark can only be achieved by rigorous preparation and dedication
by all employees and the commitment at all levels," said Ahmed
Zeb, Operations Director. An integrated ISO 9001 / 14001 Management System results in the simultaneous achievement of both Quality and the Environmental Standards. Among ISO's most widely known and successful standards, ISO 9001 has become an international reference for quality requirements especially in business to business dealings, and ISO 14001 looks set to achieve as much, if not more, in helping organizations meet current day environmental challenges. Macksons
opens Colour Banks in China, Maldives Managing Director
Macksons Paint Industries (Pvt) Ltd, M. Mizver was quoted as saying
in a company statement that having exported paints to China for
the past three years, and to Male for the past two years, he saw
the need for such a facility in these favourable and growing markets.
The next colour bank is due to be opened in India. Macksons Paint Industries has consolidated its market leadership in the export of paints by being the first Sri Lankan paint manufacturer to offer colour tinting systems to overseas markets. This concept, the Coloris France Colour Bank, is in keeping with global trends and offers the most advanced solutions to the consumer. ICASL's
new standards on disclosures ICASL, in a
statement last week on the objectives of the new Standard, SLAS
38, quoted Reyaz Mihular, its chairman of the Statutory Accounting
Standards Committee, as saying "distinguishing discontinuing
and continuing operations improves the ability of investors, creditors,
and other users of financial statements to make projections of the
enterprise's cash flows, earnings-generating capacity, and financial
position." SLAS 38 is a presentation aid disclosure standard, the institute said, adding that it focuses on how to present a discontinuing operation in an enterprise's financial statements and what information to disclose. "It does not establish any new principles for deciding when and how to recognize and measure the income, expenses, cash flows, and changes in assets and liabilities relating to a discontinuing operation," the statement said. Drug
abuse lowers productivity in workplaces Tay Bian How,
Director, Drug Advisory Programme, said 85 percent of drug abusers
are employed. Drug users
are often less productive and responsible for 50 to 80 percent of
the internal thefts and losses, he told the seminar organised by
the Drug Advisory Programme of the Colombo Plan in collaboration
with the National Dangerous Drugs Board. The ILO Code
of Practice clearly states that drug abuse is an occupational hazard
that every work place should address as part of its safety and health
practices, Tay Bian How said. Training managers,
supervisors and employees to implement a drug free workplace programme
benefits the organisation in numerous ways as it would save money,
save employees, save time and enhance the corporate image, he added. Amal Nanayakkara,
Training Manager of Aitken Spence Hotels, dismissed the perception
that hotels were a breeding ground for drugs and that hotel staff
were involved in supplying drugs. "If a
student is found guilty of taking drugs, are the authorities going
to close down the school? If not why is there a special emphasis
on the hotels and the night clubs?" asked another hotelier. Secretary General
of the Colombo Plan, Dr. U. Sarat Chandran, underscored the danger
that drugs could easily penetrate the workplace as their use was
widespread. Productivity
in the workplace is necessary for good quality services, he added. The panel discussion
was titled "The drug scenario in Sri Lanka: policy and strategies
to combat the drug menace". Dr. Pratima
Murthy from India described the drug free workplace programme of
the Karnataka State Road Transport Corporation as one of the exemplary
drug free workplace programmes in Asia. Prior to the
drug free workplace programme, nearly two percent of the employees
came intoxicated to work and 2100 employees were addicted, she said. Strikes and assaults dropped drastically and attendance improved after the implementation of the programme, she added. (TM) |
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