There are a few good some reasons why it makes ample sense to register your little. The first basic reason is to protect one’s own interests and not risk personal assets to the stage that facing bankruptcy in case your business faces an emergency and is forced to shut down. Secondly, it is easier to attract VC funding as VCs are assured of protection if an additional is opted. It provides tax benefits to the entrepreneur typically in a partnership, an LLP potentially a limited company. (These are terms which have been described later on). Another valid reason is, in the eventuality of a limited company, if one wishes to transfer their shares to another it’s easier when enterprise is enrolled.
Very there’s always a dilemma as to when organization should be registered. The answer to which is, primarily, in case 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 one to go ahead and register the start-up. And as mentioned earlier on it is always beneficial to do it as a preventive measure, before you could be saddled with liabilities.
Depending upon the size and type of corporation and when there is want to flourish it, your startup could be registered among the many legal formats in the structure on the company available.
So ok, i’ll 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 it takes. This is the method to be able to if for you to do it on your own and the objective of establishing vehicle is to realize a short-term goal. But this puts you prone 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. In the a Partnership firm, as the laws are not as stringent as that involving Ltd. Company, (limited company) it requires a associated with trust in between the partners. But similar together with proprietorship thankfully risk of losing personal assets in any eventuality.
c) OPC Company Registration in India Online is a one Person Company in how the company is often a separate legal entity within turn effect protects the owner from being personally responsible for any loss.
d) Limited Liability Partnership (LLP), from where the general partners have limited liability. LLP combines the best of partnership firm and a corporation and the partners aren’t personally prone to lose their personal wealthiness.
e) Limited Company that of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there’s no upper limit; the number of directors must be at least 3 and
ii) Private Limited Company where minimal number of people needed are 7 with a maximum maximum of corporation. The number of directors must be 2.