There are several good reasons why it makes perfect sense to register your business. The first basic reason is to protect your own interests and not risk personal assets to the point of facing bankruptcy in case your business faces a crisis and is also forced to close. Second, it is easier to attract venture capital funds, as venture capitalists are assured of protection if the company is registered. Provides tax benefits to the entrepreneur, typically in a partnership, LLP, or limited partnership. (These are terms that are described later.) Another valid reason is that, in the case of a limited company, if one wants to transfer their shares to another it is easier when the company is registered.

Very often there is a dilemma as to when the company should register. The answer to this is mainly whether your business idea is good enough to turn it into a profitable business or not. And if the answer is a sure and resounding yes, then it is time for one to go ahead and record the startup. And as mentioned above, it is always beneficial to do it as a preventive measure, before you can shoulder responsibilities.

Depending on the type and size of the company and how you want to expand it, your startup can be registered as one of the many legal formats of the structure of a company available to you.

So first let me fill you in with the required information. The different corporate structures available are:

a) Unique property. That is a company that is owned and operated or run by a single person. No registration required. This is the method to adopt if you want to do everything yourself and the purpose of establishing the business is to achieve a short-term goal. But this puts you at risk of losing all of your personal property in the event of a misfortune.

b) Collaborating firm. It is owned and operated or managed by at least two or more than two people. In the case of a partnership, since the laws are not as strict as those involving Ltd. Partnership, (joint stock company) requires a lot of trust between the partners. But similar to a property, there is a risk of losing personal assets in any eventuality.

c) OPC is a sole proprietorship in which the company is a separate legal entity that, in effect, protects the owner from being personally liable for any losses.

d) Limited liability company (LLP), where general partners have limited liability. LLP combines the best of a partnership and a business, and partners are not personally liable for losing their personal assets.

e) Limited Company which is of 2 types,

i) Public Limited Company in which the minimum number of necessary partners is 7 and there is no upper limit; the number of directors must be at least 3 and
ii) Private Stock Company where the minimum number of people required is 7 with a maximum upper limit of 50. The number of directors must be 2.