There are many good reasons why celebrate ample sense to sign up your company. The 1st basic reason would be to protect ones own interests and not risk personal assets to the point of facing bankruptcy should your business faces a crisis and in addition has to shut down. Secondly, it is better to attract VC funding as VCs are assured of protection if your firm is registered. It offers a superior tax benefits to the entrepreneur typically within a partnership, an LLP or a limited company. (They are terms which have been described later on). Another valid reason is, in case there is a restricted company, if someone wishes to transfer their shares to another it’s easier when the firm is registered.
Usually there is a dilemma as to when the company ought to be registered. The solution to which can be, primarily, should your business idea is a great one to become converted to a profitable business or otherwise not. And when what is anxiety that’s a confident and a resounding yes, it’s here we are at you to definitely go ahead and company registration services. And as mentioned previously it is usually best for take action as a safety measure, prior to deciding to might be saddled with liabilities.
Depending upon the sort and size the company and in what way you want to expand it, your startup can be registered among the many legal formats with the structure of the company available to you.
So let me first fill you in with the required information. The several company structures on offer are:
a) Sole Proprietorship. That’s a company run or run by just one single individual. No registration is necessary. This is actually the method to adopt if you wish to do everything all on your own as well as the reason for establishing the business would be to gain a short-term goal. However this puts you vulnerable to losing all your personal assets should misfortune strike.
b) Partnership firm. Is run or run by at least a couple of than two individuals. In the case of a Partnership firm, as the laws usually are not as stringent as that involving Ltd. Company, (limited company) it relates to a lot of trust involving the partners. But much like a proprietorship there is a risk of losing personal assets in a eventuality.
c) OPC can be a One Person Company when the firm is another legal entity which in essence protects the owner from being personally accountable for any losses.
d) Limited Liability Partnership (LLP), in which the general partners have limited liability. LLP combines good partnership firm and a company as well as the partners usually are not personally liable to lose their personal wealth.
e) Limited Company which can be of two types,
i) Public Limited Company in which the minimum amount of members needed are 7 and there’s no maximum; the amount of directors must be at least 3 and
ii) Private Limited Company in which the minimum number of individuals needed are 7 using a maximum maximum of fifty. The volume of directors must be 2.
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