There are some good some reasons why it makes ample sense to register your company. The first basic reason is to protect one’s own interests and is not risk personal belongings to the aim of facing bankruptcy in case your business faces a crisis and which forced to seal down. Secondly, it is simpler 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 potentially a limited enterprise. (These are terms which have been described later on). Another valid reason is, any time a limited company, 1 wishes to transfer their shares to another it’s easier when the company is subscribed.
Very often there is a dilemma as to when business should be registered. The solution to which is, primarily, if your business idea is good enough to be converted to a profitable business or not. And if the answer to method has . confident properly resounding yes, then it’s time for someone to go ahead and register the investment. And as mentioned earlier on it will be beneficial to do it as a preventive measure, before you will be saddled with liabilities.
Depending upon the size and type of the business and like you would want to grow it, your startup can be registered among the many legal formats with the structure of a company open to you.
So let me first fill you in with necessary information. The various company structures available are:
a) Sole Proprietorship. Would you company managed or run by only individual. No registration is actually required. This is the method to adopt if you want to do it on your own and the objective of establishing firm is to achieve a short-term goal. But this puts you liable 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 case of a Partnership firm, as laws aren’t as stringent as that involving Ltd. Company, (limited company) it requires a regarding trust concerning the partners. But similar the proprietorship answer to your problem risk of losing personal assets in any eventuality.
c) Online OPC Registration in India is a 60 minute Person Company in that this company is a separate legal entity which effect protects the owner from being personally responsible for any loss.
d) Limited Liability Partnership (LLP), whereas the general partners have limited liability. LLP combines the best of partnership firm and an organisation and the partners aren’t personally prone to lose their personal wealthiness.
e) Limited Company that of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there’s really no upper limit; the quantity of directors should be at least 3 and
ii) Private Limited Company where the minimum number folks needed are 7 with a maximum upper limit of corporation. The number of directors must be 2.