There are several explanations why it can make ample sense to register your small business. The 1st basic reason would be to protect ones own interests instead of risk personal belongings to the point of facing bankruptcy but if your business faces an emergency and also is forced to close down. Secondly, it is simpler to attract VC funding as VCs are assured of protection in the event the business is registered. It gives you tax advantages of the entrepreneur typically in a partnership, an LLP or possibly a limited company. (They’re terms which have been described later on). Another justified reason is, in case of a small company, if someone wishes to transfer their shares to a new it’s easier in the event the business is registered.

Often there’s a dilemma as to in the event the company ought to be registered. The reply to which is, primarily, if the business idea is a good example to be converted into a profitable business or otherwise. And when the reply to this is a confident and a resounding yes, then its here we are at one to go ahead and company registration. So that as mentioned previously it is usually good to undertake it as being a protection, before you could be saddled with liabilities.

Based on the type and sized the organization and how you need to expand it, your startup might be registered as one of the many legal formats of the structure of the company available to you.

So i want to first educate you together with the required information. The different company structures on offer are:

a) Sole Proprietorship. This is a company operated and owned or run by just one individual. No registration should be used. This can be the strategy to adopt in order to do it all by yourself along with the intent behind establishing the business would be to have a short-term goal. However this puts you susceptible to losing all of your personal belongings should misfortune strike.

b) Partnership firm. Is operated and owned or run by at the very least two or more than two individuals. When it comes to a Partnership firm, since the laws usually are not as stringent as that involving Ltd. Company, (limited company) it demands a great deal of trust involving the partners. But such as a proprietorship there’s a risk of losing personal belongings in a eventuality.

c) OPC is a One individual Company where the business is an outside legal entity which in essence protects the master from being personally responsible for any losses.

d) Limited Liability Partnership (LLP), the place that the general partners have limited liability. LLP combines the very best of partnership firm and a company along with the partners usually are not personally at risk of lose their personal wealth.

e) Limited Company which is of 2 types,

i) Public Limited Company the place that the minimum amount of members needed are 7 and there’s no upper limit; the volume of directors should be at the very least 3 and
ii) Private Limited Company the place that the minimum number of individuals needed are 7 having a maximum upper limit of 50. The number of directors should be 2.
More info about company registration have a look at this resource: read here