There are numerous reasons why it makes ample sense to subscribe your small business. The first basic reason is always to protect ones own interests rather than risk personal assets to begin facing bankruptcy but if your business faces an emergency as well as is forced to close down. Secondly, it’s easier to attract VC funding as VCs are assured of protection if the company is registered. It offers tax good things about the entrepreneur typically inside a partnership, an LLP or a limited company. (They’re terms which has been described at a later date). Another valid reason is, in case there is a fixed company, if someone desires to transfer their shares to a different it’s easier if the company is registered.
Frequently you will find there’s dilemma as to if the company ought to be registered. The reply to which can be, primarily, if the business idea is good enough being converted to a profitable business you aren’t. And if the solution to that is the confident and a resounding yes, then its time for one to proceed to company registration in india. In addition to being mentioned previously it’s always best for get it done being a preventive measure, when you might be saddled with liabilities.
Dependant on the kind and size of the business and how you want to expand it, your startup could be registered as among the many legal formats with the structure of the company on hand.
So i want to first educate you using the required information. Different company structures on offer are:
a) Sole Proprietorship. This is a company owned and operated or run by only one individual. No registration is required. This is the strategy to adopt if you need to do it all on your own and the purpose of establishing the organization is always to achieve a short-term goal. But this puts you vulnerable to losing all your personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by a minimum of two or more than two individuals. When it comes to a Partnership firm, as the laws are not as stringent as that involving Ltd. Company, (limited company) it demands a lot of trust between the partners. But much like a proprietorship you will find there’s likelihood of losing personal assets in almost any eventuality.
c) OPC can be a One Person Company in which the company is a different legal entity which essentially protects the owner from being personally answerable for any losses.
d) Limited Liability Partnership (LLP), the location where the general partners have limited liability. LLP combines good partnership firm and a company and the partners are not personally likely to lose their personal wealth.
e) Limited Company which can be of two types,
i) Public Limited Company the location where the minimum variety of members needed are 7 and there’s upper limit; the volume of directors should be a minimum of 3 and
ii) Private Limited Company the location where the minimum amount of people needed are 7 having a maximum upper limit of fifty. The amount of directors should be 2.
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