Why company registration is mandatory in the present era ?
The private limited company registration in mandatory in the present era; since, a business organization is a company that makes, buys, or sells goods or services in exchange for money. Simply put, a company is a mode of doing business. Your business setting needs to be well considered and most importantly decide what type of business structure or vehicle to adopt. Choosing a vehicle will help you achieve most of your entrepreneurial dreams. Mostly, it depends on your expansion plans, future team size, funding requirements and what the business vision is. Company registration means acquiring the right to do business legally. In India, company registration is also known as business formation or company affiliation.
Why Pvt Ltd company registration is mandatory?
The company registration in chennai is important for the following reasons below.
Taxes and liabilities
The company registration when done must have an Employer Identifying Number (EIN) with the IRS and the state in which they are based as a business. This ensures the legitimacy of the business entity as a legal and tax-legal operation. Next, it ensures compliance with legal standards for bookings and accounting. This establishes that the business pays taxes, employees are covered under adequate insurance and the business reports income to the government. There are also many tax benefits for registering a business.
Reputation with customers
The establishment of a consumer trust highlights the importance of company registration. Customers and consumers, especially people you’ve never worked with before, need to make sure you’re a legitimate business. If your opc company registration in chennai is not properly registered, a potential client may suspect your business of a “fly-by-night” operation. When a state files with the state, it can make it easier for your customers to decide whether or not to spend money with your company.
Company incorporation also qualifies you for a supplier discount that you would not normally receive as an unregistered operation. Suppliers usually reserve wholesale rates for business owners. Also, if you plan to try to get a government contract for your company, business registration is one of the first requirements.
Company incorporation allows you to hire full-time employees and pay them according to state law. When you register your business with the state you will receive a state identification number. Even if you plan to hire employees in your business, before you start looking for workers, it is best to take care to register your business with the state. Online company registration in chennai is now simple and easy.
Types of companies in India
Public limited company
A public limited company in India has at least three directors, at least seven shareholders and can have a maximum of unlimited shareholders. It can be either listed or listed on a stock exchange. Once the company is listed on the stock exchange as a public limited company, its shareholders can freely trade in the company’s shares. As it is a separate legal entity, the existence of the company is not affected by retirement, death or bankruptcy of its shareholders. Involving such companies can be difficult and time consuming.
Private limited company
A private limited company registration in India is a privately held small business entity and is regarded as an independent legal entity on investment. It has a minimum one and a maximum fifty shareholders. Unlike public limited companies, private limited companies will not be able to trade its shares in public.
Partnership firm in India
Partnerships are “relationships between people who have agreed to share in the profits of the business they do or work for all of them”. Partnership is a type of joint venture company in India. The owners of a partnership firm are known individually as partners and collectively as a partner. Starting a partnership business requires at least two people. The maximum number of partners is ten. The partners have unlimited liability. Registration of partnership firm is not mandatory.
One Person company
A One Person Company (OPC) is a new type of company launched in India since 2013. Only residents of India are allowed to join the OPC. No foreigner can include any OPC. An OPC can have single owner. It was introduced to encourage individual entrepreneurs to start their own business. This is a type of private company and can be displayed in the same way as a separate legal entity. The owner’s liability is limited.
Companies limited by shares
Here the liability of the members is limited by the nominal value of their shares. So if the shares he owns are paid in full, he has zero liability. If the shares are not paid in full, the llp company registration in chennai may be asked to pay the outstanding amount in case of liquidation.
Limited companies by guarantee
Some companies are limited by underwriting. This means that the members agree with the amount they will pay in case of liquidation, i.e. the guaranteed amount. Such liability will only increase in the company it is ending. To know more about private limited company registration in coimbatore, click here.
Unlimited Liability Companies
Here the members of the company are personally responsible for the losses of the company. So in case of liquidation, the assets of the company are not enough for the impression of its debts, then the members will have to pay the remaining amount. Their private property can also be attached. This type of company is not really seen in India.
Benefits of company registration
Benefits of company incorporation are as follows:
- Limited liability
Since the private limited company registration has its own legal identity, its members are not liable for its debts. The liability of the members of the company is limited to unpaid shares of their share value. Some companies are limited by a guarantee, where the liability of each member is determined by the amount of such guarantee.
- Transfer of shares
The shares held by the shareholder of the company are transferred by nature. Ownership in the Company may therefore be transferred in accordance with the manner provided in the Articles Association. In a private company, some restrictions may be placed on the transfer of shares. But the right is not completely stripped away.
- Permanent existence
The company is an artificial person, so there are no life restrictions. Death, bankruptcy, insanity, retirement, etc. do not affect the company status of any or all of its members. To know more about partnership firm registration in chennai, click here.