Let’s discuss the 3rd reason why you may want to use a corporation for your business. In the first reason, we tackled liability. In the second, we discussed control. Now, it’s all about appearances.
In our law office, we have a funny way of stating our policy on clothing for lawyers. Since we run a non-traditional law practice based on educating clients and making the law more approachable for SME’s and Family businesses, we take efforts to avoid wearing the traditional barongs worn by other lawyers as we found that the lawyer’s barong tends to intimidate people. We want to make things easier to access for people not used to dealing with lawyers. So if there’s no appearance scheduled in court, we allow our lawyers to wear business shirts paired with a blazer instead. No ties required because we want to keep the laid back and approachable feel for everyone.
But on the other end of the spectrum, we don’t want our lawyers looking sloppy when they go out to meet clients. We had to put in minimum standards. We didn’t want to curtail their fashion choices, so we put it into general terms in our Operations Manual.
It goes, “Dress nicely enough so that when you enter Greenbelt 5 in Makati, the guard will hesitate to pat you down as you enter the door.” We chose Greenbelt because it is relatively high-end and the guards there get to interact with all levels of people every day so they are in the best position to sniff out who to pat down.
Our policy sounds a little tongue in cheek, but this contains a few nuggets:
- You dress with enough credibility that guards instinctively know you mean business;
- You are successful enough to have these clothes as options; and most important of all
- You walk in with a certain level of swagger and confidence so they hesitate to treat you like a normal person out for a stroll. You’re a cut above the rest.
Its the perfect embodiment of Rachel Zoe’s quote: “Style is a way to say who you are without having to speak.”
What does your business “Attire” look like
The same thing happens when you conduct business in the Philippines. When people see your business, is there instant credibility conveyed? Or do you have to work hard, pick yourself up and convince everyone you encounter that you’re “legit”? To pass everyone’s internal “security guard” and for them to let you thru without patting you down suspiciously, I tend to favor operating as a Corporation over other types of business entities.
When you enter a business deal as a Corporation, here’s what you are saying between the lines:
“I’m serious, son!”
Doing business as a corporation silently says to people that you are serious about what you are offering. This is because putting up a Company, versus a Single Proprietorship or a Partnership, entails more work which would not make sense if you were only “casual” about conducting business.
To set up a company, you typically enlist the help of a lawyer to ensure that you engineer the corporation with all the capitalization structure, powers and authorizations you will need down the line. There are more regulatory compliances you need to be mindful of. If you were a “Fly by night” business or you’re just doing this as a hobby, would you go thru all that effort and expense for something you’re not taking seriously?
“Trust me, I know what I’m doing.”
Putting up a company also implies that you know what you are doing. Company setups require a certain level of strategy and fore-planning which casual players would probably have no patience for. When we go thru company setups with our clients, we have them go thru checklists to ensure that everything they want their company to undertake for the next 3-5 years is reflected in the registration papers.
We want them to imagine far into the future and envision where the company will fit into their grand plan. Only serious players get this far. Others fall by the wayside.
“I’m equipped”
You have resources and capabilities that people who are not serious about doing business wouldn’t be able to utilize.
Let me show you why. To set up a corporation the right way, there are so many things you need to prep beforehand:
- Technical know-how;
- Advisors (usually lawyers and accountants);
- Initial capitalization;
- corporate structure;
- bank accounts;
- Registration with multiple government agencies such as, but not limited to: SEC, BIR, local governments, IPO, Barangay, etc.
Similar to a fashion get up, you wouldn’t be able to wear blazers, cool watches, and nice shoes if you weren’t successful enough to have them ready. As with corporations, you appear with a certain level of achievement walking in because it takes resources to pull off company setups.
Recap
So that wraps up the reasons why I recommend the Corporate setup to clients if they want instant credibility in the business sphere. Hope this helps you determine if a corporation is the right setup for you. In the next article, we tackle how easy it is to maneuver with a corporation in terms of ownership.
