Doing Company registration is important to obtain legal authorization for conducting a business within one’s chosen jurisdiction. Most of the jurisdictions make company registration as a legal obligation to ensure that whether a company is operating under its control. Before doing company registration there are some formalities which have to be completed.
The core and first stage of company registration are to decide upon in which jurisdiction to establish a company. Finance and economics pros and cons must be considered before starting the business in the chosen jurisdiction. Once the jurisdiction is decided, company licensing and registration can be begun.
If a company is not registered then the entity cannot be considered legal and will never have protection for any grievance procedures etc., and the main point is the entity will never be protected from any legal, social and economic by the jurisdiction.
If one hopes about the business growth and expecting revenue from the startup at the future, ultimately the business entity shall be registered. If one wants to start up on own with no staffs it can be registered as a Proprietorship firm which does not stick to huge formalities for registration and compliance. When a start-up is supposed to operate with two people, LLP is the registering option.
The registered company only has the eligibility tie up with other brands or companies. The company shall be registered as a Private limited company if it wants to raise the funds in the nearing future.
A current account cannot be opened in the bank unless the startup company is not registered because all companies’ transactions are only done through the company account.
A much-anticipated initiative called “Start-up India” was recently launched by the Central Government. The Government issued an action plan to aid the startup companies and encouraging entrepreneurship in India.
‘Startup India Scheme’ involves with some eligibility conditions:
- The startup company should be a Private Limited or a Limited Liability Partnership firm or a Registered Partnership firm to get the benefits of this scheme.
- The Startup Company’s annual turnover should not have exceeded Rs. 25 crores in any preceding financial year
- The startup should be less than five years old.
- The motto of a startup company must be developing a new product or service which shall be viable commercially and must add up value for the customers.
- Splitting an existing entity, forming a new entity from there, will never be treated as a startup company.
Key benefits of a startup company
- With respect to ‘Labour & Environment Laws’ rule, the startup entity can self-certify themselves. “Startup India Mobile App” helps the entity for self-certification.
- In the case of bankruptcy of a startup entity, the Governments help them with speedy winding up procedures.
- For the first three consecutive years, Income tax is exempted on the profits made by the startup firms.
- The Government approved venture capitalists have 20% tax exemption on the capital gains.
The flagship initiative of Startup India by the Indian Government has been proposed to develop a strong Eco-system for developing innovation and startups in our country that will definitely drive an excellent economical growth with huge employment opportunities.
From the above, it is the safest way to start up a business with proper Company Registration to enjoy the benefits of the Government and to protect the entity from unforeseen downfalls. The proper registration only helps the entity for a long survival even between the economic fluctuations.