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Thousands of entrepreneurs start their business each year. Know the advantages of few entities below.
Incorporation of Company
Private limited Company is among the most
preferred business entities. Compared to a Proprietorship or Partnership Firm,
Company offers a host of advantages as below.
Improves
Credibility:Improves
credibility by being registered as a corporate entity.
Separate
Legal Entity:Establish
separate legal identity and pursue multiple opportunities
Limited
Liability:Protect
personal asset of promoters with limited liability protection.
Attract
Funding:Syndicate both
equity and debt funds to have an optimal capital structure
Foreign
Investment:Accept
foreign direct investment (FDI) under the automatic route.
Team
Building:Offer stock
ownership ESOP plans to attract and retain talent
Have
an Exit Plan:Through
sale or dilution of equity of the company
Before the
introduction of one Person Company (OPC), a minimum of two persons were
required to start a Company or LLP. Now a single entrepreneur can establish a
corporate business entity with following advantages
Easy
Incorporation
Single
Promoter:OPC can be
registered and managed by a single promoter easily
Lesser
Compliances:Compared to
private limited company. OPC needs fewer compliances
Limited
Liability:Protects
personal assets of the promoters with limited liability protection
Improves
Credibility:Improves
credibility by being registered as a corporate entity.
Separate Legal Entity:different and distinct from the Sole Director.
Incorporation of Limited Liability Partnership
LLP is
increasingly being preferred by SMEs in India. LLP do not have a minimum
capital requirement and is not required to have its accounts audited unless the
annual sales turnover exceeds 40 lakhs or capital contribution exceeds 25
lakhs.
Easy
Incorporation
Capital
required:LLP has no
minimum authorized or paid up capital requirement.
Lesser
Compliances:Audit is
not required for LLPs , subject to revenue and capital contribution
Limited Liability:Protects personal assets of the promoters with limited liability protection
Improves
Credibility:Improves
credibility by being registered as a corporate entity.
Separate
Legal Entity:different
and distinct from the Sole Director.
Unlimited
Partners:LLP needs a
minimum of 2 partners. No limit on maximum partners
All big businesses were once only a startup. Give your dreams enough hard work and professional assistance , they are bound to become real.