Why entrepreneur needs company registration in India?
Why entrepreneur needs company registration in India?
It is important for any start-up business in India to register a business under proper authority following a structured approach. Business can range from engineering to design, development, marketing to sales and support or any other business activity. Choosing the right business structure and strategy will help the business to function effectively and achieve its business goals and objectives set by the various segments of the business. In order to register a company in Company registration in Madurai, the required business must be channelized by legal consent. Once these concepts are clear you need to understand the detailed process for incorporating a company. Here, we discuss about the topic on Why entrepreneur needs company registration in India?. Here a clear note about this topic below.
Types of structures in India:
Company registration in Madurai states various types of companies.
Sole proprietor: You become the whole and soul of the business. You are solely responsible for all business decisions made.
Hindu Unified Family (HUF): Family members can form the HUF collectively. According to the Indian, Law HUF has the status of a separate legal entity.
Partnership: A group of people who run a business together and share profits and losses through a partnership deed implemented between them.
Private Limited Company: Company registration in Madurai states that the Company is a specialized legal entity registered under the Companies Act 2013. A shareholder who is the director who runs the business on behalf of the company owners and shareholders.
One Person Company: A private limited company with a single director registered under the Companies Act, 2013.
Their qualifications are based on the business structures described above:
Suitable for small traders and merchants.
Only one person manages the work of the business
Go back to file in person name.
Audit if necessary
Small business involving two or more people
The partnership document is entered stating the terms and conditions specifying how the partnership and business will be conducted
In addition to filing a return of the business, a personal return must also be filed in the name of the partners
Audit if applicable.
Limited Liability Sharing (LLP):
Company registration in Madurai states that service-oriented businesses and low investment requirements are required
An LLP is registered under the Companies Act, 2013, which states that their liability in the event of bankruptcy and business closure is limited to their share in the LLP.
The business return must be filed and the partner’s personal returns must be filed.
Audit if applicable
Points to remember while selecting the company registration
Number of business owners
Company registration in Madurai states that this is an important question to ask when registering a company in India. E.g. If you want to own an entire business and you have the total investment needed to run the business, it is a good idea to go for a sole proprietor or one person company. Otherwise, if you want to run a business with 2 or more owners, LLP or a partner company or HUF or a private limited company if you are willing to invest and invest from the outside in the best business structure possible for you
The amount of investment
Company registration in Madurai states that initially, if you have less capital to invest you can go for a sole proprietorship or partnership company or HUF. However, you can go for OPC or LLP or Pvt Ltd if you believe you can recoup the cost of setup and compliance.
Confidence and willingness to bear responsibility
Company registration in Madurai states that commercial structures such as sole construction company, partner company and HUF have unlimited liability. In the event of insolvency the total amount of losses will be recovered from you and the partners in proportion to their profit and loss sharing. Hence there is a greater risk to personal property.Companies and LLPs have limited liability. This means that your liability is limited to the value of the contribution or shares provided.
The income tax rate applicable to the sole proprietorship and the HUF are the general tax slab rates. In the case of sole proprietorship, business income is linked to the other income of the individual. The same applies in the case of other types of companies such as partnership and company tax rate 30%.
Strategy for funding
As mentioned earlier, it is difficult to get an investment if your business structure is not registered. When it comes to trust, LLP and Pvt Ltd are at the top in terms of investment.
Why entrepreneurs need to register the company?
Business Current Bank Account – Company registration in Madurai states that if you are initially dealing with your personal savings bank account for business transactions, then leave the savings bank account and open a business current bank account in the company / company name, which is always registered in your start up in India with some relevant verification on company / company name as per RBI compliance.
Invoice and Billing – Whether you are running an online business or an offline business. You should always issue an invoice to your clients or customers in the name of the company or organization. So for that, you need a registration number that you can specify on the invoice. For X – In a private limited company you can check out the sin number or the sole proprietorship, you can check out the tin number or service tax number.
Bind contracts – Company registration in Madurai states that whether you are a tech start up or an e-commerce marketplace or any other start up. You may always enter into an agreement with vendors, suppliers or alliance partners or subsidiaries in the name of the company or organization. So it needs your registered company or start up name.
Payment Gateway – Internet based service or product business always needs business payment gateways to receive money from customer through cards / net banking / wallets. Payment gateway companies are required to have a registration certificate as per RBI compliance on the business name. They also prepare an agreement between the payment gateway company and the client’s company name.
Internship Certification –Furthermore Company registration in Madurai states that bootstrapped online start-ups always hire interns instead of employees due to cost. They save operating costs by paying stipend and certification to super interns, but for proper certification, they must specify their registered company name and details that are not possible without legal registration of the company.