Advantages of private enterprises: Reasons why entrepreneurs should choose

Advantages of private enterprise lies in flexibility and high autonomy in decision making. When owning a private business, entrepreneurs can quickly adjust strategies, implement new ideas and respond quickly to market fluctuations without being limited by complex processes. In addition, private businesses often retain financial control, allowing for profit optimization and brand development according to the founder’s personal vision.

General regulations on private enterprises

Private enterprises operate under the legal framework prescribed in Article 188 of the Law on Enterprise 2020. The legal structure of private enterprises is based on the principle of a single owner with unlimited liability. Accordingly, all assets of the owner are used to ensure the business activities of the enterprise.

Regarding legal status, private enterprises are not recognized as independent legal entities. This comes from the fact that there is no separation between the assets of the business and the assets of the owner. However, private enterprises are still allowed to conduct civil and commercial transactions within the scope of registered business lines.

Regarding rights and obligations, private business owners have the right to:

• Decide on business activities;
• Expand or shrink business scale;
• Hire a manager to run the business;
• Use profits after paying taxes and fulfilling financial obligations;
• Rent or sell businesses.

Advantages of Sole Proprietorship

Private enterprises bring many special advantages to owners in the process of operation and development. Absolute autonomy in decision making creates high flexibility in business operations. This model is especially suitable for entrepreneurs who want comprehensive control of their business.

In terms of management, a simple organizational structure helps:

• Optimize the decision-making process;
• Minimize management and operating costs;
• Speed ​​up market response;
• Maintain high security in business strategy.

Regarding the financial aspect:

• No minimum charter capital required;
• Flexibility in increasing or decreasing business capital;
• Full right to use profits after tax;
• Simplicity in accounting and bookkeeping.

Reasons to choose a Private Enterprise as a business model

According to Article 189 of the Law on Enterprise 2020, private enterprises bring many advantages to startups. This model is suitable for individual investors who want to maintain absolute control. Simplicity in establishment and operation creates favorable conditions for starting a business.

The main reasons for choosing this model:

• Establishment procedures are simple and quick;
• Low establishment and operating costs;
• High autonomy in operations;
• Good business information security;
• Easily converted or dissolved.

Especially suitable for:

• Small and medium scale business;
• Traditional family model;
• Specific professions need high flexibility;
• Initial startup project.

Notes When Establishing a Private Enterprise

When establishing a private enterprise, owners need to pay attention to the provisions in Clause 2, Article 188 of the Law on Enterprise 2020. Full compliance with legal requirements will ensure smooth business operations. At the same time, careful consideration should be given to the unlimited liability of the owner.

Points to note:

• Only one private enterprise can be registered;
• Securities cannot be issued;
• Must fully register business capital;
• Comply with accounting and tax regimes;
• Maintain complete legal records.

Document requirements:

• Application for business registration;
• Copy of legal documents of the business owner;
• Business capital declaration;
• Bank capital confirmation (if any).

Full package private enterprise registration service in Long Phan

Long Phan provides a comprehensive private enterprise registration service with a professional process. A team of experienced consultants will support customers throughout the entire process from preparing documents to completing business registration procedures. Services are designed to suit each customer’s needs.

Service process includes:

• Consulting on choosing business lines;
• Consulting on business naming;
• Drafting business registration documents;
• Representing customers to carry out administrative procedures with state agencies;
• Support post-registration procedures such as tax declaration, opening a bank account,…

Service commitment:

• Fast processing time;
• Competitive and transparent costs;
• 24/7 support;
• Information security;
• Guaranteed results.

Private enterprises are the right choice for entrepreneurs who want autonomy in business and simplicity in management. For detailed advice on establishing a private enterprise, please contact Long Phan via hotline 0906735386. Our team of experts is ready to assist you in completing all procedures quickly, professionally and effectively.