The way to Register a Startup Company
There are lots of great reasons why celebrate ample sense to register your organization. The initial basic reason is to protect your interests and not risk personal assets to begin facing bankruptcy if the business faces a serious event and also is forced to shut down. Secondly, it really is easier to attract VC funding as VCs are assured of protection if the company is registered. It provides tax advantages of the entrepreneur typically in a partnership, an LLP or a limited company. (They are terms which has been described later on). Another justification is, in case of a limited company, if an individual desires to transfer their shares to an alternative it’s easier once the company is registered.
Frequently there exists a dilemma as to once the company should be registered. The answer to which is, primarily, in case your business idea is a useful one to become converted to a profitable business or otherwise not. And when the answer to that’s a confident plus a resounding yes, then its time for you to definitely proceed to company registration. In addition to being mentioned previously it is good to get it done as being a safety measure, before you could be saddled with liabilities.
Based upon the kind and size the organization and in what way you need to expand it, your startup could be registered as among the many legal formats in the structure of a company on hand.
So allow me to first educate you using the required information. Different company structures on offer are ::
a) Sole Proprietorship. That’s a company operated and owned or operated by only one individual. No registration is required. Here is the method to adopt if you need to do it all all on your own along with the reason for establishing the business is to gain a short-term goal. But this puts you susceptible to losing all of your personal assets should misfortune strike.
b) Partnership firm. Is operated and owned or operated by a minimum of two or more than two individuals. When it comes to a Partnership firm, as the laws are not as stringent as that involving Ltd. Company, (limited company) it relates to a lot of trust between the partners. But much like a proprietorship there exists a risk of losing personal assets in different eventuality.
c) OPC can be a A single person Company in which the company is a separate legal entity which in effect protects the owner from being personally responsible for any losses.
d) Limited Liability Partnership (LLP), where the general partners have limited liability. LLP combines good partnership firm plus a company along with the partners are not personally likely to lose their personal wealth.
e) Limited Company which is of two types,
i) Public Limited Company where the minimum amount of members needed are 7 and there’s no upper limit; the quantity of directors must be a minimum of 3 and
ii) Private Limited Company where the minimum number of individuals needed are 7 with a maximum upper limit of 50. The number of directors must be 2.
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