Selecting the Business Structure and the Process of Company Registration in India
In India, to work legally, Every business has to register itself. The company registration process starts by agreeing on its structure. A organization may pick the proper structure by
1. Set goals quickly.
2. Operate at their optimum capacity.
A corporate structure determines two essential factors:
1. Income Tax filing returns.
2. The compliances to which one must adhere.
A business registered as a corporation is expected to file income tax returns along with annual reports to the company registrar. At the other hand, a business that is licensed as a sole proprietor only needs to file income tax returns. In fact, the corporation has to be audited financial records once a year which means extra expenditures of: Auditors, Authorities of Tax Filing and Accountants.
In India, there are these businesses that is when deciding on business formation an entrepreneur has these options:-
• One Person Company – In this single individual is allotted as a sole proprietor of a firm. This is ideal for a company which has just one owner or one promoter, It is introduced in year 2013.
• Private Limited Company – This is a separate legal entity and this is the most common structure. Private Limited Company has its director and shareholders. This firm consider all of them as their employees.
• Public Limited Company– This also has its separate legal entity and similar to Limited Liability Partnership the shareholder’s liability is limited to their shares. This type of structure is formed by the “volunteer association of members”
To choose the right business structure, ask the following questions.
1. Number of Owner in the Business :- One Person Company is ideal when the total initial capital is put by the one individual. Private Limited Company is appropriate when there are two or more owners and they are looking forward for suited investment in their company by new entities.
2. Liability:- In One Person Company, Private Limited Company and Public Limited Company they have a limited liability that is if there is any debt then the members will repay equal to the amount their value of shares and their contribution.
3. Tax rates of Business Structures – Any entity which is registered as a company has a flat tax rate of 30%
4. Whether others will invest in a company - Any business that hopes to get investments from venture capitalists or other parties should register it as a Private Limited. They are assessed as trustworthy organizations, and thus easier to gain financial assistance.
Process of Registration of New Business
Registration or start up of a new company in India can be easily registered online now. A few years ago, the Ministry of Corporate Affairs embodied this new phase of online registration. The basic steps needed to register a business are:
1. Get a Digital Signature Certificate, which is also known as DSC.
2. Get a Direct Identification Number which is also called as DIN.
3. Then, fill the Registration form of New User which is also known as e-Form.
4. Then, submit the e-Form.
Now, the company is registered and is ready to work legally in India. It is evident that to run a legitimate business in a country it has to get registered. Although in recent times the method has been greatly streamlined, it is something that has no scope for error. All of this registration can be done online without having to visit a brick and a motor site. Swing through their website to find out more about how they can get their legal license for a company. A person can also call them and ask to set up a free first consultation.