There are a couple of good the actual reason why it makes ample sense to register your little. The first basic reason is to protect one’s own interests as an alternative to risk personal assets to the point of facing bankruptcy in case your business faces a crisis and and that is forced to seal down. Secondly, it is easier to attract VC funding as VCs are assured of protection if an additional is registered. It provides tax benefits to the entrepreneur typically in a partnership, an LLP potentially a limited group. (These are terms which have been described later on). Another valid reason is, in case of a limited company, if wishes to transfer their shares to another it’s easier when enterprise is recorded.
Very there’s always a dilemma as to when a lot more claims should be registered. The solution to which is, primarily, when the business idea is sufficiently good to be converted to a profitable business or never ever. And if the answer to that is a confident too resounding yes, then it’s time for someone to go ahead and register the investment. And as mentioned earlier on it will be beneficial to do it as a preventive measure, before damaging saddled with liabilities.
Depending upon the size and type of enterprise enterprise 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 the company on the market.
So allow me to first fill you in with the required information. The different company structures available are:
a) Sole Proprietorship. Of your company owned and operated or run by only 1 individual. No registration it takes. This is the method to adopt if you should do it yourself and the objective of establishing firm is to realize 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 more than two individuals. In the case of a Partnership firm, when your laws are not as stringent as that involving Ltd. Company, (limited company) it relates to a associated with trust between the partners. But similar to a proprietorship there could risk of losing personal belongings in any eventuality.
c) OPC Registration Online in India is single Person Company in that your company is often a separate legal entity within turn effect protects the owner from being personally accountable for any losses.
d) Limited Liability Partnership (LLP), from where the general partners have limited liability. LLP combines the best of partnership firm and an organisation and the partners aren’t personally prone to lose their personal holdings.
e) Limited Company is actually of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there’s no upper limit; the associated with directors must be at least 3 and
ii) Private Limited Company where minimal number of needed are 7 by using a maximum upper limit of corporation. The number of directors must be 2.