There are lots of explanations why commemorate ample sense to register your company. The very first basic reason is always to protect ones own interests and not risk personal belongings to the point of facing bankruptcy in case your business faces a crisis as well as has to seal down. Secondly, it’s simpler to attract VC funding as VCs are assured of protection if your clients are registered. It gives you tax advantages of the entrepreneur typically in a partnership, an LLP or possibly a limited company. (They are terms which have been described at a later date). Another justification is, in case of a restricted company, if an individual desires to transfer their shares to another it’s easier when the clients are registered.

Frequently there is a dilemma as to when the company should be registered. The solution to which can be, primarily, if your business idea is a great one to become converted into a profitable business or otherwise. And if the answer to that’s a confident along with a resounding yes, then it is here we are at one to just company registration. So that as mentioned earlier on it is beneficial to get it done as a precautions, when you could be saddled with liabilities.

Depending upon the kind of and height and width of the business enterprise and exactly how you would like to expand it, your startup could be registered among the many legal formats from the structure of an company open to you.

So permit me to first educate you with all the required information. The different company structures on offer are:

a) Sole Proprietorship. What a company owned and operated or operated by just one individual. No registration should be used. This is the strategy to adopt if you want to do everything alone and the reason for establishing the company is always to achieve a short-term goal. However, this puts you at risk of losing all your personal belongings should misfortune strike.

b) Partnership firm. Is owned and operated or operated by at least 2 or more than two individuals. When it comes to a Partnership firm, because the laws aren’t as stringent as that involving Ltd. Company, (limited company) it requires a great deal of trust between the partners. But much like a proprietorship there is a likelihood of losing personal belongings in different eventuality.

c) OPC is really a One Person Company when the clients are another legal entity which in essence protects the owner from being personally accountable for any losses.

d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines the best of partnership firm along with a company and the partners aren’t personally at risk of lose their personal wealth.

e) Limited Company which can be of 2 types,

i) Public Limited Company where the minimum number of members needed are 7 and there’s no maximum; the volume of directors should be at least 3 and
ii) Private Limited Company where the minimum number of individuals needed are 7 with a maximum maximum of 50. The amount of directors should be 2.
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