Company registration is a simple process of registering a business to conduct operations of Business, Trade, and Commerce. It is registering our firm to the government treasury under the department of revenue to show, record, and prove that our company is registered. It is done to acquire and maintain the registered status of our business and the structure of it. It is recommended and is required by law to register. Business registration helps to encapsulate the ownership and details of the company. The registration of business helps in many ways to promote and expand the business. It also ensures that no one else can start and operate under the same banner if our business is once registered.
Importance of Company registration in Chennai:
Looking for company registration in Chennai? Let’s see what are the importance of company registration. Starting and running a business under a certain name is not a matter. As a fact, it is important to register your business name for both legal and own purpose. If it is not registered anyone can start the same business and produce the same product under your name. You cannot sue him for breaching the law for the use of your name. After registration under the government, you can take legal steps, action against anyone who is violating the use of the trademark name of your company. Registering not only to help for the offline purpose it can help for digital purpose as well. You can use your brand name, once registered, as the domain name for the Company’s website. It may also make you aware if somebody is operating under the same name or the name, if, already exists.
Different Business structures in India:
There are many structures followed in India for business. Let’s have a detailed explanation of different structures and some of the important facts of them. Here is the list of structures which is currently under use in India:
1. Private Limited Company:
We all came across a plethora of company names, in our daily life, ending with private limited known as Pvt. Ltd. in short. The company whose turnover is usually high use this structure. The private limited company is chosen with the company of minimum two to a maximum of two hundred; including shareholders, stakeholders. Most startups prefer choosing this structure because of the opportunities for growth offered by this. They may gain benefits from the schemes, introduced by the government of India. To encourage new startups, there will be an exemption of tax for the first three years. So that they can use the tax amount on the development and growth of the company which eventually helps in the economic growth of the nation.
2. Public Limited Company:
The company is open for volunteers with a minimum capital of five lakhs, while there is no limit for the maximum number of members, but the minimum must be at least seven in the count. A public limited company is not a private company, it is incorporated and governed under the India Companies act of 2013. Usually, a company with a high income prefer to operate under this structure.
3. One Person Company:
This one is the latest, new to India, structure introduced by The Companies act of 2013. The Company which has only one member as its shareholder falls under this category. These companies are usually started by only one person and persons who are in their early stages generally select this structure because of the benefits offered by this structure. Like Private Limited Companies, there will be tax exemption for the first three years under startup India Higher Benefits of Depreciation. OPC generally has a unique name. There is an online portal to check the name. This will be a suitable structure for the single owners because it has more benefits than a proprietorship structure.
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4. Sole Proprietorship:
A sole proprietorship is the easiest form of business that can be done in India and it is not governed by any specific laws. The proprietor has the whole power, responsibility, decision, control over his firm. There will be few formal requirements for this proprietorship. There is no need for registration under the government. This is known as the “One-man registration” by the government of India.
5. Limited Liability Partnership:
This is known as the LLP in general. Here the partners are limited to their liabilities, roles, power based on their contribution to the firm or business. Usually, this is best suitable for the business with low investment. As per the agreement, the shares and capital ratio may change. LLP has more flexibility while coming to terms with compliance.
Advantages of Business registration:
1. Autonomous Legal Entity: While looking through the eyes of the government, the company is separate from the owners, owners are subject to change. The company will operate under the registered structure, even though there is frequent change in ownership. There is no need for fear of the company run.
2. Financial Assistance: If a company is registered it can easily get support from the financial and banking institutions. They will come forward to help or support you financially only if you are registered.
3. Limited Liabilities of the company: Apart from the LLP there is the unlimited liability of the owners. If there is any loss incurred in the company, the onus comes to the owner’s shoulders to pay back. Only the company is liable to the losses.
4. Tax Benefits: According to the structure chosen by the startups, firms there will be tax holidays for the first three years. They will not have any tax burden until they are stable in their business. The tax that benefited can be used for the development and growth of the company.
5. Financial Support: Private limited companies can raise funds through their banking institutions once the firm is registered. Public companies can raise openly in the form of capital shares and deposits.
Registering your business is the best way to expand your business. So register your business today by contacting one of our tax consultants in Chennai who can guide you in choosing what is best for your business.
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