How to Build Your Company During a Pandemic
In an ordinary course of a business, it is only natural that an entrepreneur thinks about their capital recovery period. Business analysts would say that it would take an average of six months to two years for a company to have its initial capital and investment return. However, for entrepreneurs who built their company during a pandemic, it might take a little longer and a little riskier for them to have their money back.
For business persons who want to take this worldwide situation as a stepping stone to establish their businesses, we compiled some tips that will help your organization survive the pandemic. What’s more, these tips will safeguard your business against future crises that can threaten your operations. After all, certain plans cannot be postponed. Yet, necessary steps can be taken, especially if you desire to establish a company during a pandemic.
Establish a Statutory Business Entity
Small businesses are easier to manage and relatively easier to finance, no doubt about that. However, unexpected events like natural disasters or the occurrence of a global pandemic may hurt a small business’s capability to recover from huge losses. To guarantee profitability and increased chances of sustainability, you can choose to have your business owned by a statutory entity (corporations) or LLC.
Assess Whether the Statutory Entity, Corporation or LLC is in Good Standing
Having your business owned as a statutory entity, LLC or corporation is a viable assurance for funding and liability for its debts. But, without a good standing, your chances for rebuilding your business is negatively affected.
To guarantee a good standing, be prompt in filing annual reports and the payment of annual fees. If you can’t comply with these administrative regulations, you’ll have to face the consequences of being administratively dissolved.
Include Contingency Plans in Governing Documents
What makes a great business different from mediocre ones? It’s the ability to adapt to the new normal and prepare contingency plans in cases of emergencies. Governing documents include a partnership agreement, shareholder agreement, and operating agreement.
These documents must reflect contingency measures like having to name someone in replacement of a key officer, measures to take if an employee is unable to work, or if your organization is forced to close down because of a lockdown.
Open in Areas Where Risks Are Minimal
Risks of experiencing a global pandemic is an unfortunate event that most businesses aren’t prepared for. Moreover, the occurrence of natural disasters like hurricanes, wildfires, or floods threatens the continuity of operations.
Aside from securing permits and business licenses, the management must assess whether the crisis ceases to have your business operate. If it doesn’t, you may look into withdrawing your business from that foreign state, although you’re previously qualified to operate.
Update Public Documents As Needed
Some concerns or issues may force your business to change public documents like registration papers or change of address. As COVID-19 greatly affected all businesses, take it as a learning curve to update documents. Make necessary changes to adapt to the new situation at hand. Failure to do so can have grave consequences concerning administrative regulations or getting your business sued.
How 3E Accounting Helps With Philippine Incorporation Package
Professionals like 3E Accounting can help you establish a company during a pandemic with ease and clarity. With the help of a Philippine Incorporation Package, you can start your business with a better understanding of risks and increased rates of profitability. For more information you may contact us.