There are a few good good reason that it makes ample sense to register your company. The first basic reason is guard one’s own interests but not risk personal assets to the purpose of facing bankruptcy in case your business faces a crisis and also is forced to close 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 or maybe limited enterprise. (These are terms which have been described later on). Another valid reason is, from a limited company, if one wishes managed their shares to another it’s easier when an additional is registered.
Very there’s always a dilemma as to when the company should be registered. The answer to which is, primarily, in case business idea is good enough to be converted to a profitable business or not solely. And if the answer to method has . confident too resounding yes, then it’s the perfect time for someone to go ahead and register the startup. And as mentioned earlier on it is often beneficial to do it as a preventive measure, before important work saddled with liabilities.
Depending upon the size and type of the business and like you would want to grow it, your startup could be registered among the many legal formats for this structure of the company accessible to you.
So let me 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 becomes necessary. This is the method to if you must do it alone and the reason for establishing business is gain a short-term goal. But this puts you subject to losing every personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or even more than two individuals. In the case of a Partnership firm, as laws are not as stringent as that involving Ltd. Company, (limited company) it relates to a involving trust in between the partners. But similar the proprietorship there could risk of losing personal assets in any eventuality.
c) Online OPC Registration in India is single Person Company in that the company is really a separate legal entity which in effect protects the owner from being personally responsible for any losses.
d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines the very best of partnership firm and a company and the partners aren’t personally liable to lose their personal wealth.
e) Limited Company which is of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there’s no upper limit; the connected with directors must be at least 3 and
ii) Private Limited Company where the minimum number of folks that needed are 7 having a maximum maximum of 150. The number of directors must be 2.