Starting a Company

Table of Contents

Starting a company 

In the ‘start-up nation’ anyone, including non nationals, can form a private company like a limited liability company (LLC). Most business owners aspire to become a limited liability company because it makes good business sense and allows more flexibility. Also, customers tend to view companies more favorably, and, in the business world, having the right image is key.  Adding a suffix like ‘ltd’ to a name immediately sends the message that this is a serious enterprise that means business (pun intended). Potential employees, too, are more likely to join a team with a strong future, a message that is clearly conveyed when a business is incorporated into a limited company.  


Advantages of setting up a Limited Liability Company 

Though the image associated with being a limited liability company is no doubt crucial, there are additional advantages to being an LLC.  For example, taxation now applies to two entities – the owner, who draws a salary either with a slip or through a dividend, and the company itself, which pays a corporate tax. Another advantage of establishing a company is the legal aspect. As any business owner would confirm, working as a licensed dealer involves significant financial risks. If someone sues a business, they essentially sue the owner, who would be responsible for paying all the incurred costs. Owners of a limited liability company, however, can afford to take on bigger risks because their liabilities as owners are limited. 


What exactly is a Limited Liability Company? 

A limited liability company, or LLC (designated by the Hebrew acronym ב’’עמ) is a private company with one or several owners who are considered shareholders in the company. An LLC operates as a separate legal entity from its shareholders, and while a shareholder can be an active part of the company’s growth, they have limited liability when it comes to the company’s debts. Simply put, if the company builds up unpaid debts or goes bankrupt, the owners will not be liable for repaying these debts. This means that a person’s property cannot be seized, nor can restrictions be imposed on them as a result of debts incurred by the company. If, however, there is a case of fraud or dishonesty in the company, the owners can be implicated and involved in the legal procedures. 


When is the right time to start a company? 

While it would be easier if specific periods in the business cycle are more propitious than others, the truth is, the ‘right time’ to set up a company depends on more than just fate, luck or a lucky number. In fact, if you want to form an LLC, this decision will depend on factors like the type of business, how much you can risk, management costs, taxation considerations, and more.   

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