There are a couple of good main reasons why it makes ample sense to register your tiny. The first basic reason is to guard one’s own interests as an alternative to risk personal assets to the aim of facing bankruptcy in case your business faces a crisis and is also forced to close down. Secondly, it is much easier to attract VC funding as VCs are assured of protection if an additional 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, any time a limited company, 1 wishes managed their shares to another it’s easier when the company is authorized.
Very often there is a dilemma as to when a lot more claims should be registered. The answer to which is, primarily, when the business idea is sufficiently good to be converted into a profitable business or not. And if the answer to that is a confident which has a resounding yes, then it’s time for in order to go ahead and register the new. And as mentioned earlier on it will be beneficial to make it work as a preventive measure, before you will be saddled with liabilities.
Depending upon the type and size of the organization and how i want to expand it, your startup could be registered as one of the many legal formats with the structure of a company on the market.
So let me first fill you in with needed information. The various company structures available are:
a) Sole Proprietorship. That’s a company managed or run by only individual. No registration becomes necessary. This is the method to if you wish to do it for yourself and the purpose of establishing firm is to attain a short-term goal. But this puts you at risk of losing all your personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or higher than two individuals. For a Partnership firm, as the laws aren’t as stringent as that involving Ltd. Company, (limited company) it demands a associated with trust within partners. But similar to a proprietorship thankfully risk of losing personal belongings in any eventuality.
c) OPC Company Registration in India Online is a Person Company in that your company is really a separate legal entity which effect protects the owner from being personally responsible for any losses.
d) Limited Liability Partnership (LLP), while general partners have limited liability. LLP combines the best of partnership firm and a corporation and the partners are not personally prone to lose their personal wealth.
e) Limited Company that’s of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there isn’t any upper limit; the quantity of directors should be at least 3 and
ii) Private Limited Company where the minimum number folks needed are 7 using a maximum upper limit of 150. The number of directors must be 2.