There are a few good main reasons why it makes ample sense to register your tiny. The first basic reason is guard one’s own interests but not 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 an additional is registered. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or even a limited group. (These are terms which have been described later on). Another valid reason is, in case of a limited company, 1 wishes to transfer their shares to another it’s easier when group is registered.
Very often there is a dilemma as to when business should be registered. The answer to which is, primarily, in case business idea is sufficiently good to be converted to a profitable business or not. And if the answer to method has . confident which has a resounding yes, then it is time for in order to go ahead and register the startup. And as mentioned earlier on it’s always beneficial to make it work as a preventive measure, before you could be saddled with liabilities.
Depending upon the type and size of the business and a method to want to grow it, your startup could be registered among the many legal formats belonging to the structure of the company available to you.
So allow me to first fill you in with necessary information. The various company structures available are:
a) Sole Proprietorship. That’s a company owned and operated or run by just one individual. No registration is needed. This is the method to if you should do it all by yourself and the purpose of establishing the organization is to achieve a short-term goal. But this puts you at risk of losing every personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or maybe 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 requires a lot of trust in between the partners. But similar in order to some proprietorship there could risk of losing personal assets in any eventuality.
c) OPC is a One Person Company Registration in India online Person Company in how the company is really a separate legal entity within turn 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 best of partnership firm and a supplier 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 is no upper limit; the connected with directors must be at least 3 and
ii) Private Limited Company where the minimum number folks needed are 7 having a maximum upper limit of corporation. The number of directors must be 2.