There are some good some reasons why it makes ample sense to register your tiny. The first basic reason is to guard one’s own interests and not risk personal belongings to the point of facing bankruptcy in case your business faces a crisis and also is forced to close down. Secondly, it is easier to attract VC funding as VCs are assured of protection if this company is opted. 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, just in case a limited company, 1 wishes to transfer their shares to another it’s easier when group is authorized.
Very almost always there is a dilemma as to when the corporate should be registered. The answer to which is, primarily, in case business idea is good enough to be converted to a profitable business or truly. And if the answer to that is a confident which has a resounding yes, then then it’s time for someone to go ahead and register the new. And as mentioned earlier on it’s always beneficial to do it as a preventive measure, before you will be saddled with liabilities.
Depending upon the type and size of the business and the way you want to flourish it, your startup could be registered among the many legal formats of the structure in a company available.
So permit me to first fill you in with the required information. The various company structures available are:
a) Sole Proprietorship. Of your company owned and operated or run by only individual. No registration becomes necessary. This is the method to be able to if you want to do it yourself and the reason for establishing business is to achieve a short-term goal. But this puts you at risk to losing your own personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or even more than two individuals. You should a Partnership firm, as being laws are not as stringent as that involving Ltd. Company, (limited company) it requires a associated with trust within partners. But similar to a proprietorship you will find a risk of losing personal belongings in any eventuality.
c) OPC Registration Online in India is a 60 minute Person Company in which the company is often a separate legal entity that effect protects the owner from being personally liable for any obligations.
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 are not personally liable to lose their personal wealthiness.
e) Limited Company that 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 end up being at least 3 and
ii) Private Limited Company where minimal number of folks that needed are 7 along with a maximum upper limit of fifty five. The number of directors must be 2.