There are a couple of good the actual reason why it makes ample sense to register your network. The first basic reason is to guard one’s own interests but not risk personal assets to the point of facing bankruptcy in case your business faces a crisis and which forced to seal down. Secondly, it is simpler to attract VC funding as VCs are assured of protection if firm is opted. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or even a limited group. (These are terms which have been described later on). Another valid reason is, just in case a limited company, if one wishes to transfer their shares to another it’s easier when the company is enrolled.
Very there’s always a dilemma as to when the corporate should be registered. The solution to which is, primarily, in case business idea is good enough to be converted into a profitable business or not solely. And if the answer to that is a confident which has a resounding yes, then then it’s time for one to go ahead and register the start-up. And as mentioned earlier on it’s always beneficial to make it work as a preventive measure, before you are saddled with liabilities.
Depending upon the type and size of the business and when there is want to expand it, your startup could be registered as among the many legal formats with the structure of a company on the market.
So permit me to first fill you in with necessary information. The various company structures available are:
a) Sole Proprietorship. It is a company managed or run by 1 individual. No registration it will take. This is the method to adopt if you wish to do it all by yourself and the reason for establishing business is to attain a short-term goal. But this puts you liable to losing complete 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 event of a Partnership firm, as laws are not as stringent as that involving Ltd. Company, (limited company) it demands a lot of trust concerning the partners. But similar in order to some proprietorship there could risk of losing personal belongings in any eventuality.
c) OPC Registration Online in India is single Person Company in that the company is often a separate legal entity which effect protects the owner from being personally to blame for any damages.
d) Limited Liability Partnership (LLP), that the general partners have limited liability. LLP combines the very best of partnership firm and a business and the partners are not personally liable to lose their personal wide range.
e) Limited Company will be of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there is no upper limit; the regarding directors must be at least 3 and
ii) Private Limited Company where minimal number of folks that needed are 7 along with a maximum maximum of fifty five. The number of directors must be 2.