There are several good the actual reason why it makes ample sense to register your company. The first basic reason is to protect one’s own interests but not risk personal belongings to the stage that facing bankruptcy in case your business faces an emergency and which forced to close down. Secondly, it is a lot easier to attract VC funding as VCs are assured of protection if this company is registered. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or maybe limited firm. (These are terms which have been described later on). Another valid reason is, any time a limited company, if Online One Person Company Registration in India wishes to transfer their shares to another it’s easier when group is enrolled.
Very almost always there is a dilemma as to when the company should be registered. The solution to which is, primarily, in case business idea is sufficiently good to be converted to a profitable business or truly. And if the answer to method has . confident and also resounding yes, then it’s time for in order to go ahead and register the investment. And as mentioned earlier on it will be beneficial to create it happen as a preventive measure, before you are saddled with liabilities.
Depending upon the type and size of the actual and the way you want to inflate it, your startup can be registered as among the many legal formats belonging to the structure associated with company open to you.
So allow me to first fill you in with necessary information. The various company structures available are:
a) Sole Proprietorship. It is a company managed or run by only 1 individual. No registration it takes. This is the method to be able to if you wish to do it yourself and the objective of establishing business is obtain a short-term goal. But this puts you at risk to losing all your personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or more 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 relates to a regarding trust in between the partners. But similar the proprietorship there could risk of losing personal assets in any eventuality.
c) OPC is a single Person Company in which the company can be a separate legal entity which in effect protects the owner from being personally to blame for any loss.
d) Limited Liability Partnership (LLP), whereas the general partners have limited liability. LLP combines the best of partnership firm and a company and the partners are not personally prone to lose their personal holdings.
e) Limited Company will be of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there’s really no upper limit; the quantity of directors should 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.