There are a couple of good main reasons why it makes ample sense to register your company. The first basic reason is to protect one’s own interests and not risk personal belongings to the purpose of facing bankruptcy in case your business faces a crisis and which forced to shut down. Secondly, it is much simpler to attract VC funding as VCs are assured of protection if firm is registered. It provides tax benefits to the entrepreneur typically in a partnership, an LLP potentially a limited company. (These are terms which have been described later on). Another valid reason is, in case of a limited company, if wishes managed their shares to another it’s easier when enterprise is authorized.
Very often there is a dilemma as to when organization should be registered. The solution to which is, primarily, as well as business idea is good enough to be converted to a profitable business or not solely. And if the answer to that is a confident properly resounding yes, then then it’s time for in order to go ahead and register the new. And as mentioned earlier on it is always beneficial to write it as a preventive measure, before you are saddled with liabilities.
Depending upon the size and type of the business and how i want to expand it, your startup could be registered as among the many legal formats with the structure associated with company open to you.
So permit me to first educate you with the required information. The different company structures available are:
a) Sole Proprietorship. Of the company owned and operated or run by one particular individual. No registration is actually required. This is the method to if you must do it for yourself and the purpose of establishing the organization is to attain a short-term goal. But this puts you at risk to losing every personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or maybe than two individuals. In the event of a Partnership firm, as laws aren’t as stringent as that involving Ltd. Company, (limited company) it demands a lot of trust in between the partners. But similar using a proprietorship answer to your problem risk of losing personal assets in any eventuality.
c) OPC Company Registration in India Online is single Person Company in that this company is really a separate legal entity which usually effect protects the owner from being personally to blame for any loss.
d) Limited Liability Partnership (LLP), from where the general partners have limited liability. LLP combines the best of partnership firm and a supplier and the partners aren’t personally prone to lose their personal power.
e) Limited Company that’s of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there’s no upper limit; the quantity of directors end up being at least 3 and
ii) Private Limited Company where minimal number of needed are 7 with a maximum maximum of 50. The number of directors must be 2.