There are a few good some reasons why it makes ample sense to register your tiny. The first basic reason is to protect one’s own interests by no means risk personal assets to the point of facing bankruptcy in case your business faces an emergency and is forced to shut down. Secondly, it is simpler to attract VC funding as VCs are assured of protection if firm is registered. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or a limited company. (These are terms which have been described later on). Another valid reason is, in case of a limited company, if wishes to transfer their shares to another it’s easier when enterprise is recorded.
Very there’s always a dilemma as to when the company should be registered. The answer to which is, primarily, when your business idea is sufficiently good to be converted to a profitable business or not too. And if the answer to method has . confident too resounding yes, then it is time for in order to go ahead and register the new. And as mentioned earlier on it is always beneficial to do it as a preventive measure, before important work saddled with liabilities.
Depending upon the size and type of corporation and a method to want to expand it, your startup can be registered as among the many legal formats with the structure in a company available.
So i want to first educate you with necessary information. The different company structures available are:
a) Sole Proprietorship. Of your company managed or run by only 1 individual. No registration it will take. This is the method to if you should do it for yourself and the purpose of establishing the company is to achieve a short-term goal. But this puts you prone 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. For a Partnership firm, as laws are not as stringent as that involving Ltd. Company, (limited company) it demands a associated with trust between the partners. But similar together with proprietorship there could risk of losing personal belongings in any eventuality.
c) Online OPC Registration in India is a one Person Company in which the company is a separate legal entity that effect protects the owner from being personally responsible for any loss.
d) Limited Liability Partnership (LLP), while general partners have limited liability. LLP combines the best of partnership firm and a company and the partners aren’t personally liable to lose their personal wide range.
e) Limited Company will be of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there’s no upper limit; the associated with directors should be at least 3 and
ii) Private Limited Company where minimal number persons needed are 7 by using a maximum upper limit of corporation. The number of directors must be 2.