Introduction
In today's dynamic business environment, the recipe for success involves having two essential elements: sufficient financial resources and compelling, innovative ideas. This guiding principle originates in the concept of free economic relations, which has allowed countless entrepreneurs to establish and grow their ventures. With approximately 333.34 million businesses worldwide, the potential for success hinges on effectively implementing a well-balanced management system [1]. However, it is unfortunate to witness the setbacks of enterprises and the unrealized potential of brilliant ideas due to mismanagement or the failure to navigate legal and accounting challenges. Nevertheless, by addressing these issues, businesses can thrive, and ideas can become lucrative ventures worth millions. In other words, to effectively implement a business idea, it is essential to initially establish a legal entity, set up an appropriate bank account, gain an understanding of business taxation rates, and ultimately, make well-informed decisions to capitalize on the opportunities presented by launching a business in Armenia.
What is trust management and which are its benefits?
The trust management agreement is a vital legal and economic instrument that plays a significant role in facilitating the growth and success of both resident and non-resident entrepreneurs' start-ups or established businesses within the Armenian business landscape. This agreement proactively addresses the common challenges faced by businesses and provides professional oversight, opening up opportunities for growth and advancement. Furthermore, it actively considers legal, accounting, and other specialized professional aspects that are inherent in business operations, ensuring a comprehensive approach to business management and development.
In a Trust Management Agreement, it is typical for a company engaged in business activities to transfer the management of its assets, including funds, real estate, and other holdings, to a designated individual or organization for a specified period and fee. The appointed entity is entrusted with the responsibility to operate exclusively in the best interests of the company. This article will delve into the specific scenario where Trust Management is conducted by an organization rather than an individual. Despite its proven effectiveness, this mechanism remains undervalued within the business community. Incorporating trust management within an organization presents several key advantages that can greatly benefit businesses. One of the primary advantages is the establishment of a profitable and efficient business management system. This allows for streamlined operations and effective resource allocation, ultimately contributing to increased productivity and profitability. Furthermore, adopting trust management opens up new opportunities for businesses to expand beyond their current geographical limitations. By leveraging trust management practices, businesses can strategically venture into new markets and diversify their operations, potentially reaching new customer bases and achieving sustainable growth. In particular:
Pay less taxes in Armenia
When a business is overseen by another company rather than an individual, it may be eligible for an exemption from income tax on the management services it receives. However, suppose a single person manages a business. In that case, it's essential to carefully consider the potential requirement to pay approximately 24 percent of the director's salary in taxes and other state fees based on estimated tax rates in Armenia. Thus, by selecting managers with a team of experienced lawyers and financiers, businesses can take advantage of the tax benefits available in Armenia at specific times. This strategic approach can empower enterprises to play a more impactful role in fostering their own growth.
Documentation flow and administrative tasks for the business in Armenia
It has been found that on average, each employee spends about 1.5 hours per day on administrative tasks, which can significantly impact their productivity. By having the managing organization take on responsibility for handling administrative and organizational issues, employees can focus more on their core tasks, leading to increased business profitability and efficient administrative operations.
Accounting and bookkeeping in Armenia
The success and profitability of any company are intrinsically tied to the correct implementation of accounting practices and precise document management. By seeking the assistance of a specialized and reputable trust management company, the company can significantly decrease the time and effort necessary for handling complex accounting processes. This proactive decision empowers the company to reallocate its valuable time and resources toward essential business activities. It eliminates the need to search for and appraise professional and reliable accounting service providers. It is paramount to underscore the pivotal role that accounting and bookkeeping play in effectively managing a business. Maintaining a well-structured accounting system is critical to ensuring seamless business operations and perpetuating financial transparency.
Representation of Companies Rights and Best Interests in Armenia
In the course of conducting business, companies often find the need to join forces with other companies and government entities at different levels. This collaboration is essential for forming partnerships and addressing various legal matters and industry-specific issues. In such scenarios, firms can benefit significantly from engaging the services of a Trust Management company. These specialized organizations boast a team of experts proficient in a diverse range of areas, enabling them to navigate collaborations with other businesses and government bodies seamlessly. The advantage of partnering with such companies lies in their ability to represent your company effectively, without the need for additional resources, ensuring a smooth and efficient process.
Financial Management Challenges (Money transfers)
In the complex financial landscape of both for-profit and non-profit organizations, there exists a sophisticated turnover system that encompasses a multitude of financial activities. These include managing expenses, generating income through the organization's activities, disbursing remuneration to employees, and various other financial operations. It's important to emphasize that these operations often require high professional expertise, especially considering the substantial sums of money involved.
In today's modern financial environment, the prevalent method of conducting these transactions is through electronic means, primarily via bank transfers. Therefore, it is crucial to recognize that any organization involved in fiduciary management assumes the responsibility of not only overseeing non-cash financial transactions but also addressing any challenges or issues that may arise within this intricate financial ecosystem.
Save time for finding the perfect CEO
The success and smooth operation of the company's day-to-day tasks and its ability to generate profits are significantly influenced by the presence of a skilled and capable manager. Therefore, the process of identifying, hiring, and onboarding an experienced and knowledgeable manager involves:
Announcing the vacant position through various channels.
Carefully reviewing numerous resumes and cover letters.
Dedicating extensive time to conducting in-depth interviews to ensure the right fit for the role.
Regarding companies that offer trust management services, it's worth noting that while there are several such companies in Armenia, the ones operating in this field are known for their exceptional service quality. Given their extensive experience in trust management, these companies are well-versed in understanding your specific requirements and what they can bring to the table for a mutually beneficial collaboration and to support business growth. Therefore, posting job announcements or reviewing CVs may not be necessary, as these seasoned organizations are adept at comprehending your needs and offering tailored solutions.
When you make use of these services, you can take advantage of a wide range of financial tasks such as bookkeeping, payroll, tax preparation, and financial reporting. This means that you won't have to go through the hassle of hiring a separate accountant to handle these tasks for you.
Providing guidance on legal contracts
Understanding the importance of systematically creating and enforcing legally binding contracts to meet the company's objectives is crucial. These agreements serve multiple purposes, contributing to revenue, financing, and offering additional privileges and benefits. Crafting these agreements meticulously to align with the company's rights and responsibilities is essential to prevent complications and financial losses and to capitalize on profitable and well-negotiated deals that align with corporate goals.
Having a proficient and knowledgeable team in place is crucial for ensuring the company's legal compliance and operational efficiency. These processes are designed to minimize potential legal and financial risks, safeguarding the organization's interests.
Establishing effective contractual relationships within specific timelines requires professionals with relevant knowledge and services and the development of a reliable management framework governing these vital agreements.
Ultimately, having a dedicated and cohesive team rather than relying on individuals will significantly contribute to a diversified talent pool and present a more compelling and capable prospect for the chief executive officer role, ensuring the company's overall success and growth.
Management is available 365 days a year, 24 hours a day
It is essential to recognize that every individual, regardless of their resilience or work ethic, requires regular rest. In the operation of large organizations, the absence of the company's director can disrupt the smooth functioning of the company and may require a significant amount of time to fully recover. Entrusting your company's management to a professional management organization can potentially help avoid such challenging scenarios. The dedicated team at the management company is structured to ensure the efficient management of your company around the clock, 365 days a year, alleviating the need for you to be constantly present.
In Armenia, finding business success involves recognizing and taking advantage of opportunities that differentiate your company from competitors. It's essential to focus on consistently and reliably managing your company's operations to continually provide uninterrupted and dependable business services to your customers. This includes creating systems and procedures to guarantee the smooth coordination of all business activities, ultimately promoting a stable and trustworthy service delivery.
Conclusion
The implementation of trust management by a professional organization can be compared to the role of a highly skilled leader in various specialized fields such as law, accounting, economics, and banking. Similar to how a director efficiently organizes and oversees the qualified management of a company at the highest level without burdening their staff with unnecessary responsibilities, a professional organization operates at least in a similar manner. However, the scope of trust management by a professional organization exceeds that of an individual for several reasons.
Firstly, the team comprising individuals with advanced legal education, extensive experience, as well as those with accounting and financial expertise collectively brings a wealth of knowledge and skills to the table. This diverse team has already established a proven track record in effectively managing clients' affairs across multiple online platforms, streamlining administrative processes, and generating comprehensive management reports.
Furthermore, considering the inherent limitations of an individual's capacity, it becomes objectively unfeasible for one person to carry out such extensive work efficiently. Therefore, entrusting such responsibilities to professional organizations with years of experience in trust management becomes the more viable option. Their expertise and professional approach are evidently reflected in their efficient handling of complex tasks.
Gritarres Professional Law Company is a trailblazer in Armenia, offering a wide range of sophisticated trust management and comprehensive legal and financial services. We aim to provide you with the freedom to focus on growing your business without the burden of legal, accounting, banking, and other regulatory concerns. Gritarres's professional law team boasts extensive experience and displays a professional and approachable demeanor. We have established strong working relationships with financial institutions and government bodies, which enables us to broaden your business development horizons. Our in-depth knowledge of the legal landscape in the Republic of Armenia ensures that you can take full advantage of all available legal benefits. Additionally, we take pride in our conscientious and transparent approach, fostering not just contractual relationships but also a sense of trust and a continuous, mutually beneficial partnership.
[1] Visit "General SME Statistics" article on brimco.io