There are a couple of good good reason that it makes ample sense to register your tiny. The first basic reason is to protect one’s own interests as an alternative to risk personal belongings to the aim of facing bankruptcy in case your business faces an emergency and also is forced to seal down. Secondly, it is much easier to attract VC funding as VCs are assured of protection if firm is accredited. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or a limited company. (These are terms which have been described later on). Another valid reason is, in case of a limited company, if one wishes to transfer their shares to another it’s easier when the company is registered.
Very there’s always a dilemma as to when the company should be registered. The answer to which is, primarily, when the business idea is good enough to be converted to a profitable business or truly. And if the answer to method has . confident too resounding yes, then it’s time for in order to go ahead and register the start-up. And as mentioned earlier on it will be beneficial to create it happen as a preventive measure, before you will be saddled with liabilities.
Depending upon the size and type of enterprise enterprise and like you would want to be expanded it, your startup can be registered as the many legal formats of the structure in a company open to you.
So let me first fill you in with necessary information. The different company structures available are:
a) Sole Proprietorship. It is a company managed or run by one particular individual. No registration is needed. This is the method to be able to if you must do it all by yourself and the objective of 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 maybe than two individuals. In the a Partnership firm, just as the laws aren’t as stringent as that involving Ltd. Company, (limited company) it demands a involving trust within partners. But similar the proprietorship there could risk of losing personal assets in any eventuality.
c) Online OPC Registration in India is single Person Company in that your company is a separate legal entity that effect protects the owner from being personally responsible for any cutbacks.
d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines the best of partnership firm and a corporation and the partners are not personally liable to lose their personal wealthiness.
e) Limited Company which is of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there isn’t any upper limit; the number of directors should be at least 3 and
ii) Private Limited Company where the minimum number of needed are 7 having a maximum maximum of 150. The number of directors must be 2.