There are several good main reasons why it makes ample sense to register your tiny. The first basic reason is to guard one’s own interests as an alternative to risk personal belongings to the point of facing bankruptcy in case your business faces an emergency and is also forced to shut down. Secondly, it is much easier to attract VC funding as VCs are assured of protection if the company is opted. It provides tax benefits to the entrepreneur typically in a partnership, an LLP and even limited reputable company. (These are terms which have been described later on). Another valid reason is, any time a limited company, 1 wishes to transfer their shares to another it’s easier when company is subscribed.
Very there’s always a dilemma as to when business should be registered. The solution to which is, primarily, when the business idea is good enough to be converted into a profitable business or truly. And if the answer to the confident and a resounding yes, then it’s time for someone to go ahead and register the start-up. And as mentioned earlier on it is often beneficial to write it as a preventive measure, before damaging saddled with liabilities.
Depending upon the size and type of enterprise enterprise 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 let me first educate you with the required information. The different company structures available are:
a) Sole Proprietorship. Would you company owned and operated or run by only 1 individual. No registration it takes. This is the method to adopt if for you to do it all by yourself and the goal of establishing firm is to achieve a short-term goal. But this puts you liable 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. You should a Partnership firm, as the laws aren’t as stringent as that involving Ltd. Company, (limited company) it relates to a lot of trust regarding the partners. But similar using a proprietorship you will find a risk of losing personal assets in any eventuality.
c) OPC Registration Online in India is a single Person Company in that the company is often a separate legal entity which usually effect protects the owner from being personally responsible for any damages.
d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines the very best of partnership firm and a business and the partners are not personally prone to lose their personal wealth.
e) Limited Company is actually of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there’s really no upper limit; the regarding directors must be at least 3 and
ii) Private Limited Company where the minimum number of people needed are 7 with a maximum maximum of 45. The number of directors must be 2.