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• Patrick Moore

  
  May 14

  A trading company is a company that specializes in buying and selling products, acting as an intermediary between manufacturers and customers, and arranging the delivery or introduction of the products to a specific market.

  
  

  Trading companies that ultimately deliver the goods to the customer also set up stores and warehouses so as not to become dependent on a manufacturer's ability to supply products on demand. Another peculiarity of trading companies is that they usually act as points of sale for several manufacturers; That is, one outlet sells the goods manufactured by several companies. Although this is not a requirement, in practice it is very likely that a shop selling the products of only one manufacturer will be a retail outlet of that manufacturer and not a trading company. In addition, trading companies can arrange all necessary procedures for the delivery of goods, including procedures for international trade.

  
  

  Depending on the particular business, a trading company can function as either a retailer, a wholesale business, or a combination of both. A retail company sells products to the end customer, usually in comparatively small quantities. A wholesale company caters to other businesses (including other trading companies) and typically sells products in bulk for further distribution, e.g. in retail stores.

  
  

  functions of a trading company
  The functions of a trading company depend on the particular industry in which it operates, but generally include the following:

  
  

  Purchase of goods from manufacturers
  Sale of goods to businesses and consumers
  store goods for sale
  Matching goods in a retail chain
  Furnishing of storage rooms and points of sale
  Management of international commercial operations
  Make logistical arrangements for the delivery of goods

  
  

  In general, the main function of a trading company is obtaining goods from manufacturers and delivering them to customers. In this regard, a trading company may undertake any tasks necessary to achieve that end. They may also be involved in negotiating and making use of land grants that allow a business to own, manage and develop a piece of real estate property, including land and buildings. Obviously, this is an additional possibility for a trading company as a legal entity, and not a major business function or task.

  
  

   

  
  

  Planning a commercial structure
  When planning a B2B commercial venture, consider the following:

  
  

  Taxation: The corporate income tax of your chosen jurisdiction plays a large role in structuring your business. You will also need to think about withholding tax, payroll requirements, VAT registration (if based in the EU) and other tax issues.
  Banks: A fast, easy to reach, convenient and trustworthy bank is essential for any commercial enterprise. Bank fees, commissions and especially the speed of transactions can be crucial to a trade. We therefore recommend that you seek professional advice from us when choosing a bank for your company.
  Legal and Accounting Requirements: While a prestigious business location can be important to your trading business, some of the most respected jurisdictions place excessive demands on business owners. Contact Confidus to ensure you are aware of all legal and financial obligations before registering your company.
  When planning a B2C trading company:

  
  

  Types of trading companiesThere are two primary types of trading companies:

  
  

  B2B (Business-to-Business)

  
  

  Trading CompanyB2C (Business-to-Consumer)

  
  

  Trading CompanyB2B (Business-to-Business)

  
  

  Trading Company

  
  

  The most extensive use of trading companies is as intermediary trading companies or B2B companies. These businesses usually 1) specialise in a certain range of products or services, which they purchase from suppliers or merchants; 2) broker the products or services (i.e. add value and commission to the transaction); and 3) coordinate the logistics of delivering these products/services to the purchasing company (i.e. arranging the delivery and providing their own or affiliated transportation services).B2C (Business-to-Consumer) Trading CompanyB2C refers to selling products or services to the end client, and so the final destination of the trading company’s goods is usually a shop.

  
  

  If you intend to sell your products or services locally, you will need to develop strong relationships with local consultants, real estate agents, accountants and other service providers within the jurisdiction where your business will operate. Confidus will help you with all local arrangements including:

  
  

  Find a location for your office, shop or warehouse
  Personnel search and recruitment
  Find a local accountant
  For import/export operations, Confidus can also assist with customs clearance, warehousing arrangements and document preparation (sales contracts, CMRs, export declarations, etc.).

  
  

   

  A trading company is a company that specializes in buying and selling products, acting as an intermediary between manufacturers and customers, and arranging the delivery or introduction of the products to a specific market.

  Trading companies that ultimately deliver the goods to the customer also set up stores and warehouses so as not to become dependent on a manufacturer's ability to supply products on demand. Another peculiarity of trading companies is that they usually act as points of sale for several manufacturers; That is, one outlet sells the goods manufactured by several companies. Although this is not a requirement, in practice it is very likely that a shop selling the products of only one manufacturer will be a retail outlet of that manufacturer and not a trading company. In addition, trading companies can arrange all necessary procedures for the delivery of goods, including procedures for international trade.

  Depending on the particular business, a trading company can function as either a retailer, a wholesale business, or a combination of both. A retail company sells products to the end customer, usually in comparatively small quantities. A wholesale company caters to other businesses (including other trading companies) and typically sells products in bulk for further distribution, e.g. in retail stores.

  functions of a trading company
  The functions of a trading company depend on the particular industry in which it operates, but generally include the following:

  Purchase of goods from manufacturers
  Sale of goods to businesses and consumers
  store goods for sale
  Matching goods in a retail chain
  Furnishing of storage rooms and points of sale
  Management of international commercial operations
  Make logistical arrangements for the delivery of goods

  In general, the main function of a trading company is obtaining goods from manufacturers and delivering them to customers. In this regard, a trading company may undertake any tasks necessary to achieve that end. They may also be involved in negotiating and making use of land grants that allow a business to own, manage and develop a piece of real estate property, including land and buildings. Obviously, this is an additional possibility for a trading company as a legal entity, and not a major business function or task.

   

  Planning a commercial structure
  When planning a B2B commercial venture, consider the following:

  Taxation: The corporate income tax of your chosen jurisdiction plays a large role in structuring your business. You will also need to think about withholding tax, payroll requirements, VAT registration (if based in the EU) and other tax issues.
  Banks: A fast, easy to reach, convenient and trustworthy bank is essential for any commercial enterprise. Bank fees, commissions and especially the speed of transactions can be crucial to a trade. We therefore recommend that you seek professional advice from us when choosing a bank for your company.
  Legal and Accounting Requirements: While a prestigious business location can be important to your trading business, some of the most respected jurisdictions place excessive demands on business owners. Contact Confidus to ensure you are aware of all legal and financial obligations before registering your company.
  When planning a B2C trading company:

  Types of trading companiesThere are two primary types of trading companies:

  B2B (Business-to-Business)

  Trading CompanyB2C (Business-to-Consumer)

  Trading CompanyB2B (Business-to-Business)

  Trading Company

  The most extensive use of trading companies is as intermediary trading companies or B2B companies. These businesses usually 1) specialise in a certain range of products or services, which they purchase from suppliers or merchants; 2) broker the products or services (i.e. add value and commission to the transaction); and 3) coordinate the logistics of delivering these products/services to the purchasing company (i.e. arranging the delivery and providing their own or affiliated transportation services).B2C (Business-to-Consumer) Trading CompanyB2C refers to selling products or services to the end client, and so the final destination of the trading company’s goods is usually a shop.

  If you intend to sell your products or services locally, you will need to develop strong relationships with local consultants, real estate agents, accountants and other service providers within the jurisdiction where your business will operate. Confidus will help you with all local arrangements including:

  Find a location for your office, shop or warehouse
  Personnel search and recruitment
  Find a local accountant
  For import/export operations, Confidus can also assist with customs clearance, warehousing arrangements and document preparation (sales contracts, CMRs, export declarations, etc.).