Private Business Corporation
A Private Business Corporation is a legal entity regulated by the Private Business Corporation Act
Pros of Private Business Corporations (PBC)
- The primary advantage of PBCs is that they offer liability protection similar to that of a PLC
- Can be created with one person as a member (unlike partnerships which require at least two people)
- The company owner can choose how the PBC should be taxed - either like a partnership or sole proprietorship where the owner is taxed at the individual level (i.e., just file you individual taxes and claim your business expenses on you individual form) or like a PLC where the owner files a separate tax statement for the PBC.
- PBC can get tax registration and tax clearance and VAT registration if it meets the threshold.
- PBCs can also participate in government and private tenders just like a Private Limited Company
- It has less formalities and is cheaper to register the PBC at the Companies Registrar than a PLC
Cons of Private Business Corporations (PBC)
- Must file Statement of Incorporation with the Registrar of Companies
- Must draft an operating agreement that serves as the agreement among the members which describes the affairs of the PBC and the conduct of the business (may have to file this with the State but generally needs to keep a copy along with the PBC’s records)
- Must pay yearly fees to renew the PBC and file specific paperwork yearly