There are several good main reasons why it makes ample sense to register your little. The first basic reason is to safeguard one’s own interests by no means risk personal assets to the point of facing bankruptcy in case your business faces a crisis and also is forced to close down. Secondly, it is easier to attract VC funding as VCs are assured of protection if an additional is disclosed. It provides tax benefits to the entrepreneur typically in a partnership, an LLP or maybe limited reputable 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 an additional is recorded.
Very often there is a dilemma as to when the corporate should be registered. The answer to which is, primarily, when the business idea is sufficiently good to be converted into a profitable business or never ever. And if the answer to the confident properly resounding yes, then it is time for one to go ahead and register the investment. And as mentioned earlier on it is always beneficial to write it as a preventive measure, before you will be saddled with liabilities.
Depending upon the size and type of the actual and when there is want to be expanded it, your startup can be registered among the many legal formats belonging to the structure associated with company accessible to you.
So allow me to first fill you in with the required information. The various company structures available are:
a) Sole Proprietorship. It is a company owned and operated or run by 1 individual. No registration becomes necessary. This is the method in order to if you wish to do it yourself and the goal of establishing firm is to attain a short-term goal. But this puts you at risk to losing complete 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 case of a Partnership firm, just as the laws aren’t as stringent as that involving Ltd. Company, (limited company) it relates to a lot of trust concerning the partners. But similar to a proprietorship there could risk of losing personal belongings in any eventuality.
c) Online OPC Registration in India is a one Person Company in that the company is a separate legal entity that effect protects the owner from being personally subject to any loss.
d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines the best of partnership firm and an organisation and the partners aren’t personally liable to lose their personal wealth.
e) Limited Company which is of 2 types,
i) Public Limited Company where the minimum number of members needed are 7 and there’s really no upper limit; the regarding directors end up being at least 3 and
ii) Private Limited Company where minimal number of people needed are 7 having a maximum upper limit of corporation. The number of directors must be 2.