There are some good main reasons why it makes ample sense to register your company. The first basic reason is preserve one’s own interests as an alternative to risk personal assets to the point of facing bankruptcy in case your business faces an emergency and also is forced to close down. Secondly, it is much simpler to attract VC funding as VCs are assured of protection if organization is disclosed. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or maybe 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 group is registered.
Very almost always there is a dilemma as to when business should be registered. The answer to which is, primarily, if your business idea is good enough to be converted to a profitable business or not too. And if the answer to and also confident too resounding yes, then it’s time for in order to go ahead and register the startup. And as mentioned earlier on it’s usually beneficial to create it happen as a preventive measure, before damaging saddled with liabilities.
Depending upon the type and size of enterprise enterprise and a method to want to grow it, your startup could be registered as the many legal formats in the structure of a company accessible to you.
So allow me to first fill you in with necessary information. The different company structures available are:
a) Sole Proprietorship. That’s a company managed or run by 1 individual. No registration becomes necessary. This is the method to be able to if you want to do it all by yourself and the objective of establishing firm is to attain 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 higher than two individuals. In the case of a Partnership firm, as being laws aren’t as stringent as that involving Ltd. Company, (limited company) it demands a associated with trust regarding the partners. But similar together with proprietorship you will find a risk of losing personal belongings in any eventuality.
c) OPC Registration Online in India is single Person Company in how the company is often a separate legal entity which effect protects the owner from being personally liable for any damages.
d) Limited Liability Partnership (LLP), whereas 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 which is of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there isn’t a upper limit; the associated with directors must be at least 3 and
ii) Private Limited Company where the minimum number persons needed are 7 by using a maximum upper limit of 50. The number of directors must be 2.