There are some good reasons why it makes ample sense to register your tiny. The first basic reason is to guard one’s own interests but not risk personal belongings to the point of facing bankruptcy in case your business faces a crisis and is also forced to shut down. Secondly, it is easier to attract VC funding as VCs are assured of protection if organization is disclosed. 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, from a limited company, 1 wishes managed their shares to another it’s easier when an additional is authorized.
Very often there is a dilemma as to when business should be registered. The answer to which is, primarily, if your business idea is good enough to be converted to a profitable business or not. And if the answer to the confident and also resounding yes, then it’s time for in order to go ahead and register the startup. And as mentioned earlier on it’s usually beneficial to create it happen as a preventive measure, before important work saddled with liabilities.
Depending upon the size and type of enterprise enterprise and like you would want to flourish it, your startup could be registered as among the many legal formats with the structure of the company open to you.
So ok, i’ll first fill you in with the required information. The different company structures available are:
a) Sole Proprietorship. Would you company managed or run by one particular individual. No registration is actually required. This is the method to be able to if you should do it all by yourself and the reason for establishing firm is to attain a short-term goal. But this puts you prone to losing all your personal assets should misfortune strike.
b) Partnership firm. Is owned and operated or run by at least two or maybe than two individuals. For a Partnership firm, as laws are not as stringent as that involving Ltd. Company, (limited company) it requires a involving trust between the partners. But similar in order to some proprietorship you will find a risk of losing personal assets in any eventuality.
c) Online OPC Registration in India is a Person Company in that your company is often a separate legal entity which usually effect protects the owner from being personally responsible for any obligations.
d) Limited Liability Partnership (LLP), while general partners have limited liability. LLP combines the very best of partnership firm and a company and the partners are not personally prone to lose their personal holdings.
e) Limited Company that of 2 types,
i) Public Limited Company where minimal number of members needed are 7 and there’s really no upper limit; the regarding directors should be at least 3 and
ii) Private Limited Company where the minimum number of needed are 7 with a maximum maximum of corporation. The number of directors must be 2.