Trending Useful Information on Pvt Ltd Company Registration You Should Know


PRIVATE LIMITED COMPANIES: WHY SHOULD YOU REGISTER?


GETTING A BETTER UNDERSTANDING OF THE INDIAN COMPANY REGISTRATION PROCESS

Several reports claim India has the second highest number of unregistered businesses in the world. However, as per Ministry of Corporate Affairs data, the number of registered companies has steadily increased.

The final step towards achieving your entrepreneur dream is the registration of your business, which starts with shortlisting your business idea, conducting in-depth market research and development, developing the product or service, looking after finances, and charting the rough business plan.

VARIOUS TYPES OF BUSINESS ENTITIES

Private limited companies, sole proprietorships, partnerships, limited liability companies, and one-person companies can be registered under different guidelines. Companies and limited liability companies, for example, are governed by the Companies Act 2013 and registered with the Ministry of Corporate Affairs. The process of starting a business was once tedious and costly, involving a lot of legal complexities. However, by seeking professional assistance, it is now straightforward and affordable and comes with many benefits.

- PRIVATE LIMITED COMPANY REGISTRATION

The Companies Act 2013 allows private limited companies to be incorporated under its provisions, granting greater flexibility, limited liability, and the possibility of growth than other types of businesses.

- LIMITED LIABILITY PARTNERSHIP

LLP was first introduced in 2008 by the LLP Act. It provides owners with a minimum degree of liability and is easy to maintain. However, LLP does not attract investors and cannot easily accommodate employee stock options.

- SOLE PROPRIETORSHIP

This type of business entity is commonly called a sole trader company because only one individual owns and manages the business operations. It is very simple to set up, no capital is needed. There are no benefits of limited liability or legal distinction between the business owner and the business.

- PARTNERSHIP FIRM

A partnership company is managed by two or more partners, as the name implies. Several advantages of this approach include the ease of starting, minimal compliance, and relatively inexpensive costs. The partnership deed specifies all the roles and responsibilities of each partner, as well as other terms and objectives.


THE TOP FIVE REASONS FOR FORMING A PRIVATE LIMITED COMPANY

1. SETTING UP A BANK ACCOUNT FOR YOUR BUSINESS:

The establishment of a current bank account is a prerequisite and an important asset of any business, regardless of whether it is a sole proprietorship, partnership, or private limited company.

The incorporation certificate and memorandum of association are required for opening a business bank for a private limited company in the respective state, whereas such documents are not required for sole proprietorships and partnerships.

2. OWNERSHIP CAN BE TRANSFERRED EASILY:

Occasionally, it is necessary to transfer ownership of a business, and in such cases, an unregistered business entity finds it more challenging. Ownership of assets can only be transferred when a sole proprietorship is sold. Those registered as private limited companies or limited liability partnerships have an easier time transferring shares and business documents.

3. LIMITATION OF LIABILITY:

In addition to the fact that any business is prone to incurring losses, registration offers limited liability protection, which means that the promoters are not responsible for the business' liabilities. Personal assets cannot be lost.

4. REPUTATION OF THE BRAND:

In order for a business to be sustainable, it needs to be registered. Registered businesses can be passed down as heirlooms to future generations.

5. FINANCES THAT ARE SECURE:

You cannot miss out on seeking and securing investment for your business if you want to move forward. It could be in the form of debt or equity. Having a company incorporated facilitates the funding process and attracts more investors. Also, most banks and financial institutions prefer to fund registered entities over unregistered ones.

HOW DO I REGISTER A COMPANY?

Now that you are aware Company Registration of the importance and benefits of company registration, it is always best to seek professional assistance who can guide you through the process and tell you what the pros and cons of each registration are. According to the Companies Act 2013, registration of companies is done through the MCA (Ministry of Corporate Affairs)/ROC (Registrar of Companies).

Thank you for giving your valuable time for reading this write-up, if still, you have any queries regarding Private Limited Company Registration then please connect to our team at [email protected] or call us at 9988424211.

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