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IMPORTANCE OF REGISTRATION OF THE COMPANY FOR YOUR BUSINESS
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Article Details
IMPORTANCE OF REGISTRATION OF THE COMPANY FOR YOUR
BUSINESS
Authored By - ABHINAV MISHRA
CO- AUTHOR – SABIR JAMAL KHAN
Department- Law Department
Amity University Lucknow, Uttar
Pradesh
Starting up any new business it can
be a daunting task, and there are many important decisions to be made. The most
important decisions we will make is whether or not is to register your company;
first of all when you decide to start a business registration of a company is
an essential part of your business. And the other you should plan, preparing,
registering, launching, and establishing the business is the right way of
starting a business.
First, we should know what company is
registration? Company registration is the most important process is to
registering your business with the appropriate authorities is is known as
company registration. It denotes that formal permission to engage in commercial
activity is granted to you if you register as a company. In the modern era a
crucial step is taken by to start a new business. Earlier, company registration
was a time – consuming and expensive procedure for startup but with the
development of the internet business takes a drastic change. Regardless of the
firm’s size, business registration is necessary to safeguard your company
legally. If you rgister your firm, you gain access to a variety of advantages
for your fledgling enterprise.
There are several benefits to
registering your business, and in this post, we will examine some of them. To
operate a business in the Indian market, a company must be registered.
Understanding the benefits of company registration is crucial for all new
business organisations to launch their ventures successfully.
A legal commercial organisation of
this kind is a company. Typically, it consists of a group of individuals who
have come together to form a business organization and who have a common seal,
everlasting succession, and a different legal entity. It is a legitimate
existence covered by the 2013 companies Act or any other prior acts that were
prevalent in india.
DIFFERENT TYPES OF COMPANIES IN INDIA:
1. ONE PERSON COMPANY OR OPC : it can be implemented by a single
person, as the name suggests. This new business category was created
specifically to support young and beginning business owners. Also, it promotes
the idea of corporation’s commerce. You should be aware that OPC has separate
legal existence and very minor financial obligations, unlike the sole
proprietorship firm.
2. PRIVATE COMPANY: to register a private company under
the companies act, at least two people are required. It is not permitted to
trade on a licenced exchange or accept shares or debts obligations from the
general public. Up to 200 people may be members of a private business.
3. PUBLIC COMPANY: to establish a public company, seven
members are required at the very least.the securities are freely transferable
and are posted on a stock exchange. The number of members is not limited in any
way.
There are some reasons why company
registration is so important:
LEGAL PROTECTION: it is one of the very important tools
for safeguard your business from any dispute arising related to your company
because legal protection would save you from any problem relating to your
business. when you register your company, a legal entity is created by you that
is separate from its owners. Company and the owner both have different legal
entity if any problem is arising to your company than you would not personally
be liable. This means that any business debts or legal issues are protected by
your personal assets. Any issues regarding the any business-related debts you
would be personally liable without the company registration. For safeguard your
personal finance and assets you would register your company.
BRAND PROTECTION: when you are registering your company
your brand identity would be save there no one have any option to copy your
company name and logo it can protect your brand identity. It can prevent your company from copying your
branding and creating confusion in the market. It can save your company form
any misconduct or any fraudulent activity relating to your company. Registering
your company people don’t hesitate to buy a product because they know company
have a legal protection and they have their own legal entity as well as brand
protection.
CREDIBILITY: when you register your company, you
are demonstrating that you are serious about your business that you registered
your company and that have taken the necessary steps to establish it as a
legitimate entity. If company have no any credibility, brand protection or
unregistered business customers, suppliers or investors, they may hesitate to
work because unregistered company have not given any guarantee to customers ,
investors and supplier they should not take any responsibility on their own.
The most probably chance is to unregistered company are fraud they have no any
legal entity. Company registration lends credibility to your business.
EASY TRANSFERABILITY: when we register a company, it is
easy to sell the business and make a profit and also we required is to change
the entire shareholding rights to the buyer and therefore it is easy to
transfer the ownership and management by simple agreement. In this way, money,
time and importantly the big process of stamp duty are also saved in a company.
It will get easier to transfer the business property to other businesses
seller.
BPRROWING FUNDS: when you register your business as a
company, we can enjoy all types of funds. Large financial assistance usually is
offered by banks and financial institutions and investors prefer to work with
registered company because they are stable, and they have their own legal
identity and other than the unregistered company. bank or investors don’t
hesitate to give loan to any registered company because they know they are the
trustworthy company.
TAXATION: company tax on their profits will be
paid by organisations that are registered as a company. In registered companies
they are entitled to a range of tax benefits and incentives. It can include
lower tax rates, tax deductions, and exemptions. Additionally, it offers a
large range of latitude and costs that are tax deductible and can be offset
against a company’s profits.
DUAL OR MORE RELATIONSHIP: your business can enter into legally
binding contracts with any of its directors and shareholders by registering as
a company form of organization. The person is simultaneously in charge of the
company in addition to their job. For instance, a person may simultaneously
occupy the position of shareholder, creditor, employee, and director of the
business. And a person can gain from all of his jobs, for instance, if he/she
is a shareholder of the company and also a creditor, they can both collect
dividends and interest.
COST AND RISK FACTORS: given the considerable financial risk
inherent with high – tech projects, it is always preferable and advantageous to
pursue large capital expenditure or hi-tech initiatives. Even banks and other
financial institutions urge that businesses be registered as corporations
rather than choosing other organisational structures when obtaining business
loans or financial support.
In conclusion, registering your business is a
crucial step in starting a successful enterprise. It offers legitimacy,
trademark protection, legal protection, finance access, and tax advantages. A
legal expert should be consulted if you are beginning a new business endeavour
to determine the optimal business structure to all legal criteria for company
registration.
REFERENCES
Article Information
IMPORTANCE OF REGISTRATION OF THE COMPANY FOR YOUR BUSINESS
Authors: ABHINAV MISHRA, SABIR JAMAL KHAN
- Journal IJLRA
- ISSN 2582-6433
- Published 2023/04/05
- Volume 2
- Issue 7
About Journal
International Journal for Legal Research and Analysis
- Abbreviation IJLRA
- ISSN 2582-6433
- Access Open Access
- License CC 4.0
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