There are a few good good reason that it makes ample sense to register your company. The first basic reason is to guard one’s own interests as an alternative to risk personal belongings to the purpose of facing bankruptcy in case your business faces a crisis and also is forced to shut down. Secondly, it is much easier to attract VC funding as VCs are assured of protection if organization is registered. It provides tax benefits to the entrepreneur typically in a partnership, an LLP potentially a limited firm. (These are terms which have been described later on). Another valid reason is, just in case a limited company, 1 wishes managed their shares to another it’s easier when the company is enrolled.
Very often there is a dilemma as to when organization should be registered. The answer to which is, primarily, when your business idea is good enough to be converted to a profitable business or not too. And if the answer to that is a confident and also resounding yes, then it’s time for one to go ahead and register the start-up. And as mentioned earlier on it is always beneficial to write it as a preventive measure, before damaging saddled with liabilities.
Depending upon the size and type of corporation and a method to want to be expanded it, your startup could be registered as one of the many legal formats with the structure of a company available.
So permit me to first fill you in with the required information. The various company structures available are:
a) Sole Proprietorship. Of the company managed or run by 1 individual. No registration is needed. This is the method to be able to if you must do it alone and the reason for establishing business is to realize 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 a lot more than two individuals. You should a Partnership firm, as being laws are not as stringent as that involving Ltd. Company, (limited company) it requires a associated with trust within partners. But similar in order to some proprietorship there is a risk of losing personal assets in any eventuality.
c) OPC Registration Online in India is single Person Company in that your company is a separate legal entity which effect protects the owner from being personally responsible for any obligations.
d) Limited Liability Partnership (LLP), from where the general partners have limited liability. LLP combines the best of partnership firm and a company and the partners are not personally liable to lose their personal power.
e) Limited Company is actually of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there’s no upper limit; the regarding directors should be at least 3 and
ii) Private Limited Company where minimal number of folks that needed are 7 having a maximum maximum of fifty five. The number of directors must be 2.