Pros
Clear Organizational Structure: Formal companies typically have a defined hierarchical structure with clear roles, responsibilities, and reporting lines. This structure helps in establishing order, promoting accountability, and ensuring efficient decision-making processes within the organization. Professionalism and Standardization: Formal companies often emphasize professionalism in their operations. They adhere to standard business practices, procedures, and policies, which can contribute to consistent quality, reliability, and customer satisfaction. The formal environment also fosters a sense of discipline and professionalism among employees. Legal Protection and Compliance: Formal companies are typically registered entities that comply with legal requirements and regulations. This provides legal protection to the company and its owners, shielding them from personal liability in case of legal issues or financial obligations. Compliance with laws and regulations also helps establish trust and credibility with stakeholders. Access to Resources and Funding: Formal companies have better access to resources and funding compared to informal or unregistered setups. They can approach banks, investors, or financial institutions for loans, grants, or equity investments. Formality often enhances credibility and facilitates partnerships with suppliers, vendors, and other businesses. Growth and Scalability: Formal companies are better positioned for growth and scalability. The structured nature of these organizations allows for systematic expansion, such as opening new branches or hiring additional employees. Formality also attracts potential customers, partners, and investors who are more likely to engage with an established company, leading to greater opportunities for growth and market penetration.
Cons
Management issue was there which is not fixed