There are a few good main reasons why it makes ample sense to register your company. The first basic reason is to safeguard one’s own interests but not risk personal belongings to the aim of facing bankruptcy in case your business faces a crisis and and that is forced to seal down. Secondly, it is easier to attract VC funding as VCs are assured of protection if firm is accredited. It provides tax benefits to the entrepreneur typically in a partnership, an LLP and even limited reputable company. (These are terms which have been described later on). Another valid reason is, from a limited company, if wishes managed their shares to another it’s easier when the company is recorded.
Very often there is a dilemma as to when business should be registered. The solution to which is, primarily, when the business idea is good enough to be converted to a profitable business or not too. And if the answer to that is a confident properly resounding yes, then then it’s time for someone to go ahead and register the investment. And as mentioned earlier on it will be beneficial to make it work as a preventive measure, before damaging saddled with liabilities.
Depending upon the size and type of the organization and like you would want to flourish it, your startup could be registered as the many legal formats in the structure in a company open to you.
So ok, i’ll first educate you with necessary information. The different company structures available are:
a) Sole Proprietorship. That’s a company managed or run by 1 individual. No registration is actually required. This is the method to be able to if you must do it alone and the objective of establishing the organization is gain a short-term goal. But this puts you liable to losing your entire 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 a Partnership firm, as laws are not as stringent as that involving Ltd. Company, (limited company) it demands a lot of trust in between the partners. But similar to a proprietorship thankfully risk of losing personal assets in any eventuality.
c) Online OPC Registration in India is single Person Company in that this company can be a separate legal entity which effect protects the owner from being personally subject to any cutbacks.
d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines the very best of partnership firm and a business and the partners aren’t personally liable to lose their personal wealthiness.
e) Limited Company will be of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there’s really no upper limit; the quantity of directors end up being at least 3 and
ii) Private Limited Company where minimal number of people needed are 7 having a maximum upper limit of 50. The number of directors must be 2.