Art Creative Ltd

The Importance of Formally Registering Your Business Operations

Martin Castilla            No comments            Oct, 14

If you’re going through a particularly rough period with your business and you’re considering something like liquidation, a few factors come into focus detailing the importance of having formally registered your enterprising operation. Sure, often we go into business as a result of perhaps first identifying a gap in the market which we go on to explore, then we go on to formalise proceedings by registering with the Company Register to see the options around disqualification.

If your operation has become insolvent, it’s not the end of the world or the end of your career as a business person, but you’ll be glad your business is a formally registered entity, especially if you used a site similar to Your Company Formations Ltd to help you through the registration process.

Separation of liability

The consequences of the liability legally associated with a business operator who hasn’t officially registered their operation are not often reported on, for some reason, but it’s a very real and surprisingly common occurrence. It’s a very unfortunate situation to have to navigate, that of having your personal assets attached to your insolvent business operation, because simply registering the operation could have helped avoid what can be a very crippling reality.

So formally registering your business simply and crucially facilitates the separation of liability from you personally and your company, which becomes its own legal entity. This doesn’t grant you the licence to be reckless or take unnecessary risks though, because directors still have some liability in their capacity as a decision-making figure within the enterprise.


A business that’s formally registered is infinitely more professional in its appearance than that operation which is operated out of one’s “garage,” or as is sometimes referred to as running it “out of the boot of your car.” Okay, so even if it is physically being operated out of a residential address, the fact that it has an official company registration number (CRN) makes it infinitely more professional.

What this means to the bottom line is that you’re likely to get more business, as part of the proactive approach to avoiding insolvency. The professional manner through which you interact with your customers, suppliers, partners, etc, can also help you retain those relationships in the event that you go through a liquidation and seek to start afresh, with a brand new company.

Physical best-practice cues

It’s as simple as something like having to go through an official processes, which in many instances stop the owner/founder from mismanaging the business’s resources, like the admin associated with using the business bank account to fund personal financial needs. The official processes involved with running an officially registered entity act as a physical barrier or cue to hedge against destructive operational practices.

Even if there are indeed some workarounds, eventually you’ll have to self-correct and you’re less likely to make it habitual within a professional structure.


Any business-recue entity, whether private or state-run, will never consider taking on a case if proceedings were operated unofficially. It’s only an officially registered business that would be eligible for consideration to go through a business rescue plan that best matches the circumstances of the insolvency.

Only a formally registered entity would also be eligible for something like business development funding, business loans, etc.