There are many good the actual reason why it makes ample sense to register your company. The first basic reason is to guard one’s own interests and is not risk personal assets to the stage that facing bankruptcy in case your business faces an emergency and and that is forced to close down. Secondly, it is easier to attract VC funding as VCs are assured of protection if an additional is disclosed. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or maybe limited reputable company. (These are terms which have been described later on). Another valid reason is, from a limited company, 1 wishes managed their shares to another it’s easier when an additional is enrolled.
Very often there is a dilemma as to when the company should be registered. The solution to which is, primarily, as well as business idea is sufficiently good to be converted to a profitable business or not solely. And if the answer to the confident which has a resounding yes, then then it’s time for in order to go ahead and register the investment. And as mentioned earlier on it will be beneficial to write it as a preventive measure, before you could be saddled with liabilities.
Depending upon the type and size of the business and a method to want to grow it, your startup can be registered as one of the many legal formats belonging to the structure of a company available to you.
So permit me to first educate you with the mandatory information. The different company structures available are:
a) Sole Proprietorship. That’s a company owned and operated or run by just One Person Company Registration in India online individual. No registration is actually required. This is the method in order to if you want to do it yourself and the reason for establishing business is obtain a short-term goal. But this puts you subject to losing all your personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or more than two individuals. In the a Partnership firm, as being laws aren’t as stringent as that involving Ltd. Company, (limited company) it demands a lot of trust regarding the partners. But similar the proprietorship you will find a risk of losing personal assets in any eventuality.
c) OPC is a single Person Company in that the company is often a separate legal entity which in effect protects the owner from being personally to blame for any damages.
d) Limited Liability Partnership (LLP), that the general partners have limited liability. LLP combines the very best of partnership firm and a company and the partners aren’t personally liable to lose their personal wealth.
e) Limited Company will be of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there’s really no upper limit; the connected with directors end up being at least 3 and
ii) Private Limited Company where the minimum number of folks that needed are 7 using a maximum upper limit of 50. The number of directors must be 2.