We all want to be rich and there are two ways to get rich, either you work under someone (Job) or start your own business.
But there are some people who do not want to work under someone, so they start their own business/Startup as entrepreneur. So before starting any business it is necessary to follow some steps.
First of all, you have to think of an idea for your business. You have to think that what service or what product are you going to provide to your customers?
When you are completely satisfied with the idea of your business, after that give a name to your business. Name should be relevant for your business, it should reflect the mission of your business. After you decide the name of the company, you have to register your company in the government.
Why Company/Business need to be registered?
So it makes it easier for your company to get a fund or loan.
How to register company?
First step toward the registration of Company is to obtain the Digital Signature Certificate (DSC) and Director Identification Number (DIN) from the official website of Ministry of Corporate Affairs (MCA) (under the Companies Act 2013). As I said, this is a complex process so you can hire a Lawyer who can help you.
The final step is to incorporate your entity (company) under a specific business type (also called business structure). It is very important to choose the correct business structure for your company.
Business structure or Business entities: Business structure is a system outlining how the activities are organized and directed to achieve goals. These activities will generally include the rules to be followed and the roles and responsibilities of those within the company.
Incorporation: It is the formation of a new corporation.
Corporation: A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity; a legal person in legal context) and recognized as such in law for certain purposes. -wikipedia
Various Business Structures-
1) Sole proprietorship: It is the easiest type of company registration in India. As the name suggests, only one person manages the company and only he/she will be responsible for his/her profit and loss. Also, there are minimum rules and regulations of the government.
This is generally recommended only for small businesses.
2) One-person company (OPC): It limit liabilities for directors of company, this means that the director's personal assets will not be endangered if the company sinks.
It makes the company easy to get a loan. And it is also simple to manage company as there is lesser compliance compared to a private limited companies.
3) Partnership firm: If you have partners in your business then you can register your company in this type. You and your partners have to sign an agreement (called partnership deed) that will contain all the duties and responsibilities between partners and how the profit will be shared.
4) Limited liability company (LLC): LLCs keep their members safe from the liabilities like personal debts and legal hearings. In this, Tax and profit sharing is flexible, and paperwork is much lesser as compared to other type of registrations, that's why LLC is called as flexible business structure.
5) Private Limited Company (LTD): This is the most reputed way of registering a company. If you register the company in this way, then the trust of investers, bank and customer increases on your company. It is the type of company that has minimum of 2 and maximum of 200 directors/shareholders. In this, the liability of the company’s owner with respect to the company’s debt is only limited to his shares.
The company's shares can be easily transferred to another person. Also, there are more tax benefits as compared to other types of Companies.
And at last, I would suggest to take a help of lawyer and chartered accountant because this process might be complicated for you.
And at last, I would suggest to take a help of lawyer and chartered accountant because this process might be complicated for you.
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