There are a couple of good reasons why it makes ample sense to register your company. The first basic reason is to protect one’s own interests and is not risk personal belongings to the aim of facing bankruptcy in case your business faces an emergency and and that is forced to shut down. Secondly, it is much simpler to attract VC funding as VCs are assured of protection if the company is disclosed. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or a limited firm. (These are terms which have been described later on). Another valid reason is, from a limited company, if one wishes to transfer their shares to another it’s easier when group is authorized.
Very almost always there is a dilemma as to when organization 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 that is a confident and a resounding yes, then it’s the perfect time for in order to go ahead and register the start-up. And as mentioned earlier on it is often beneficial to make it work as a preventive measure, before you are saddled with liabilities.
Depending upon the size and type of enterprise enterprise and how i want to grow it, your startup can be registered as the many legal formats with the structure of a company open to you.
So let me first fill you in with the required information. The different company structures available are:
a) Sole Proprietorship. That’s a company owned and operated or run by one particular individual. No registration is actually required. This is the method to if for you to do it on your own and the reason for establishing vehicle is obtain 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 higher than two individuals. In the event of a Partnership firm, as the laws aren’t as stringent as that involving Ltd. Company, (limited company) it demands a associated with trust between the partners. But similar in order to some proprietorship answer to your problem risk of losing personal assets in any eventuality.
c) OPC Registration Online in India is a one Person Company in how the company is often a separate legal entity within turn effect protects the owner from being personally subject to any loss.
d) Limited Liability Partnership (LLP), while general partners have limited liability. LLP combines the best of partnership firm and a company and the partners aren’t personally prone to lose their personal holdings.
e) Limited Company that of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there is no upper limit; the regarding directors should be at least 3 and
ii) Private Limited Company where the minimum number persons needed are 7 having a maximum maximum of 45. The number of directors must be 2.