There are some good reasons why it makes ample sense to register your company. The first basic reason is to guard one’s own interests and not risk personal assets to the aim of facing bankruptcy in case your business faces an emergency and also is forced to shut down. Secondly, it is much simpler to attract VC funding as VCs are assured of protection if the company is registered. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or a limited group. (These are terms which have been described later on). Another valid reason is, just in case a limited company, if wishes managed their shares to another it’s easier when an additional is subscribed.
Very there’s always a dilemma as to when the company should be registered. The solution to which is, primarily, when the business idea is sufficiently good to be converted into a profitable business or truly. And if the answer to that is a confident too resounding yes, then it is time for in order to go ahead and register the start-up. And as mentioned earlier on it’s always beneficial to do it as a preventive measure, before you could 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 available.
So permit me to first fill you in with needed information. The different company structures available are:
a) Sole Proprietorship. Of your company owned and operated or run by 1 individual. No registration becomes necessary. This is the method in order to if you should do it on your own and the purpose of establishing vehicle is to achieve a short-term goal. But this puts you prone to losing every 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 event of a Partnership firm, as the laws are not as stringent as that involving Ltd. Company, (limited company) it relates to a regarding trust within partners. But similar in order to some proprietorship you will find a risk of losing personal belongings in any eventuality.
c) OPC Company Registration in India Online is a single Person Company in which the company can be a separate legal entity which in effect protects the owner from being personally liable for any loss.
d) Limited Liability Partnership (LLP), from where the general partners have limited liability. LLP combines the very best of partnership firm and a company and the partners aren’t personally prone to lose their personal holdings.
e) Limited Company that’s of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there is no upper limit; the regarding directors should be at least 3 and
ii) Private Limited Company where minimal number folks needed are 7 having a maximum maximum of 50. The number of directors must be 2.