There are several good good reason that it makes ample sense to register your company. The first basic reason is to guard one’s own interests by no means risk personal assets to the stage that facing bankruptcy in case your business faces an emergency and and that is forced to shut down. Secondly, it is much easier to attract VC funding as VCs are assured of protection if this company is disclosed. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or maybe limited company. (These are terms which have been described later on). Another valid reason is, just in case a limited company, if one wishes managed their shares to another it’s easier when the company is enrolled.
Very almost always there is a dilemma as to when the company should be registered. The solution to which is, primarily, when your business idea is sufficiently good to be converted into a profitable business or not too. And if the answer to that is a confident which has a resounding yes, then then it’s time for in order to go ahead and register the startup. And as mentioned earlier on it is often beneficial to create it happen as a preventive measure, before you will be saddled with liabilities.
Depending upon the type and size of the business and how i want to grow it, your startup could be registered among the many legal formats with the structure in a company available.
So i want to first fill you in with needed information. The different company structures available are:
a) Sole Proprietorship. Of your company managed or run by 1 individual. No registration is actually required. This is the method to be able to if you wish to do it alone and the reason for establishing firm is obtain a short-term goal. But this puts you prone to losing your own 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 event of a Partnership firm, when your laws aren’t as stringent as that involving Ltd. Company, (limited company) it relates to a involving trust regarding the partners. But similar in order to some proprietorship there could risk of losing personal assets in any eventuality.
c) OPC Registration Online in India is a single Person Company in which the company is a separate legal entity that effect protects the owner from being personally responsible for any cutbacks.
d) Limited Liability Partnership (LLP), whereas 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 wealthiness.
e) Limited Company that’s of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there isn’t any upper limit; the quantity of directors should be at least 3 and
ii) Private Limited Company where minimal number of people needed are 7 with a maximum upper limit of 50. The number of directors must be 2.