There are a few good main reasons why it makes ample sense to register your company. The first basic reason is to protect one’s own interests by no means risk personal assets to the aim of facing bankruptcy in case your business faces a crisis and is forced to shut down. Secondly, it is simpler to attract VC funding as VCs are assured of protection if an additional is subscribed. It provides tax benefits to the entrepreneur typically in a partnership, an LLP potentially a limited company. (These are terms which have been described later on). Another valid reason is, any time a limited company, if wishes to transfer their shares to another it’s easier when company is recorded.
Very often there is a dilemma as to when organization should be registered. The answer to which is, primarily, when the business idea is good enough to be converted to a profitable business or not. And if the answer to that is a confident properly resounding yes, then then it’s time for someone to go ahead and register the startup. And as mentioned earlier on it is often beneficial to make it work as a preventive measure, before damaging saddled with liabilities.
Depending upon the size and type of the organization and the way you want to flourish it, your startup can be registered as one of the many legal formats belonging to the structure of a company on the market.
So let me first fill you in with needed information. The various company structures available are:
a) Sole Proprietorship. It is a company managed or run by 1 individual. No registration it will take. This is the method in order to if for you to do it all by yourself and the reason for establishing the organization is to achieve a short-term goal. But this puts you liable to losing every personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or higher than two individuals. You should a Partnership firm, when your laws aren’t as stringent as that involving Ltd. Company, (limited company) it requires a involving trust concerning the partners. But similar together with proprietorship thankfully risk of losing personal assets in any eventuality.
c) OPC Registration Online in India is a 60 minute Person Company in which the company can be a separate legal entity within turn effect protects the owner from being personally liable for any obligations.
d) Limited Liability Partnership (LLP), from where the general partners have limited liability. LLP combines the very best of partnership firm and a business and the partners aren’t personally liable to lose their personal wide range.
e) Limited Company that’s of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there is no upper limit; the number of directors should be at least 3 and
ii) Private Limited Company where minimal number persons needed are 7 along with a maximum upper limit of 50. The number of directors must be 2.