There are many good some reasons why it makes ample sense to register your little. The first basic reason is to safeguard one’s own interests and not risk personal belongings to the purpose of facing bankruptcy in case your business faces a crisis and and that is forced to shut down. Secondly, it is a lot easier to attract VC funding as VCs are assured of protection if an additional is opted. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or maybe limited firm. (These are terms which have been described later on). Another valid reason is, from a limited company, if one wishes to transfer their shares to another it’s easier when the company is authorized.
Very often there is a dilemma as to when business should be registered. The solution to which is, primarily, when the business idea is sufficiently good to be converted into a profitable business or not too. And if the answer to and also confident and a resounding yes, then it is time for in order to go ahead and register the start-up. And as mentioned earlier on it will be beneficial find a quote as a preventive measure, before important work saddled with liabilities.
Depending upon the type and size of the business and when there is want to be expanded it, your startup can be registered as the many legal formats belonging to the structure associated with company open to you.
So permit me to first fill you in with needed information. The various company structures available are:
a) Sole Proprietorship. It is a company managed or run by only individual. No registration is needed. This is the method to adopt if you want to do it alone and the objective of establishing the company is to realize a short-term goal. But this puts you at risk to losing complete personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or higher than two individuals. You should a Partnership firm, when your laws aren’t as stringent as that involving Ltd. Company, (limited company) it demands a lot of trust between the partners. But similar the proprietorship you will find a risk of losing personal assets in any eventuality.
c) OPC Company Registration in India Online is a Person Company in which the company is a separate legal entity within turn effect protects the owner from being personally subject to any losses.
d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines the very best of partnership firm and a corporation and the partners aren’t personally prone to lose their personal wealth.
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 number of directors end up being at least 3 and
ii) Private Limited Company where the minimum number of folks that needed are 7 along with a maximum maximum of 150. The number of directors must be 2.