With an estimated one hundred twenty seven unregistered companies for every registered company, India has the world's second-highest number of unregistered businesses. Until recently, registering a company was a time-consuming operation, so most entrepreneurs operated their companies as unregistered sole proprietorship or partnerships. However, with the advent of the internet, startup company registration has become much easier. Hence, Here are some of the advantages of registering the company which one should know:
- Perpetual Succession: The term perpetual succession refers to the company's ability to continue or endure indefinitely. It refers to a corporation's or company's continued life until it is legally dissolved. The importance of perpetual succession cannot be overstated. It is a separate legal body that is unaffected by the death or resignation of any of its members, as previously mentioned. Nothing changes, whether it's the membership, members, employees, or shareholders.
- Limit Personal Liability: You are legally responsible for all facets of your company as a sole trader or partnership, including debts and losses. Furthermore, you will be held legally liable if you deliver a faulty product or make a mistake. Running a company in this manner can be dangerous because it puts your personal assets at risk. A company, on the other hand, is a separate legal entity that makes it simple to shield your personal assets from your business activities. Debts owed to the firm would not be owed to you, allowing you to concentrate on growing the company.
- Establish Consumers Trust: The importance of registering a company is highlighted by the importance of establishing customer trust. Customers and clients, especially those with whom you have never worked before, need confirmation that you are a legitimate company. If your company isn't properly licensed, a potential client may accuse it of being a fly-by-night operation. When a company is registered with the state, it will put your customers at ease when deciding whether or not to spend money with you.
- Provides a Tax Benefit: Company owners are only taxed on their own salaries and bonuses, so you'll need to understand how dividends are taxed as well. Many companies may also take advantage of other tax breaks, such as insurance plan deductions, deferred tax contributions, and income splitting.
- Easy Transferability: When selling a company as a going concern, all that is needed is to pass the entire shareholding to the buyer, allowing for a smooth transition of management and ownership. The Promoters would save time and money as a result of this. A significant amount of stamp duty is avoided.
- Dual Relationship: Any individual member could enter into an arrangement or contract with the company. It is possible for an individual to take charge of a company's operations while still being an employee. As a result, an individual may simultaneously be a shareholder, creditor, owner, and employee of the company.
With an estimated one hundred twenty seven unregistered companies for every registered company, India has the world's second-highest number of unregistered businesses. Until recently, registering a company was a time-consuming operation, so most entrepreneurs operated their companies as unregistered sole proprietorships or partnerships. However, with the advent of the internet, startup company registration has become much easier. Hence, Here are some of the advantages of registering the company which one should know:
- Perpetual Succession: The term perpetual succession refers to the company's ability to continue or endure indefinitely. It refers to a corporation's or company's continued life until it is legally dissolved. The importance of perpetual succession cannot be overstated. It is a separate legal body that is unaffected by the death or resignation of any of its members, as previously mentioned. Nothing changes, whether it's the membership, members, employees, or shareholders.
- Limit Personal Liability: You are legally responsible for all facets of your company as a sole trader or partnership, including debts and losses. Furthermore, you will be held legally liable if you deliver a faulty product or make a mistake. Running a company in this manner can be dangerous because it puts your personal assets at risk. A company, on the other hand, is a separate legal entity that makes it simple to shield your personal assets from your business activities. Debts owed to the firm would not be owed to you, allowing you to concentrate on growing the company.
- Establish Consumers Trust: The importance of registering a company is highlighted by the importance of establishing customer trust. Customers and clients, especially those with whom you have never worked before, need confirmation that you are a legitimate company. If your company isn't properly licensed, a potential client may accuse it of being a fly-by-night operation. When a company is registered with the state, it will put your customers at ease when deciding whether or not to spend money with you.
- Provides a Tax Benefit: Company owners are only taxed on their own salaries and bonuses, so you'll need to understand how dividends are taxed as well. Many companies may also take advantage of other tax breaks, such as insurance plan deductions, deferred tax contributions, and income splitting.
- Easy Transferability: When selling a company as a going concern, all that is needed is to pass the entire shareholding to the buyer, allowing for a smooth transition of management and ownership. The Promoters would save time and money as a result of this. A significant amount of stamp duty is avoided.
- Dual Relationship: Any individual member could enter into an arrangement or contract with the company. It is possible for an individual to take charge of a company's operations while still being an employee. As a result, an individual may simultaneously be a shareholder, creditor, owner, and employee of the company.
Therefore, Registering a company is one of the most effective ways to grow the business and ensure its sustainability. Company registration cost is so low that not only will it make you free of responsibility, but also allows you to concentrate on growing your company into the profitable venture you desire. If you're not sure which business arrangement is best for you, a business lawyer will assist you in determining which choice is best.
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