India has a large number of start-ups mushrooming enormously day by day and has the third largest number of start-up in the world. This will impact the socio-economics of the start up eco system thereby creating larger numbers of opportunities for new start-ups.
Unfortunately, India has the second highest number of unregistered businesses. But registering your business will get a lot of benefits. Setting up a company can be a relatively easy and stress-free experience that offers greater legal protection. By registering your company, your business can begin to operate effectively and comply with Indian law.
You can limit your personal liability
Running a business involves more risk in it that means you only legally responsible for all aspects of your business, including any debts and losses. Holding limited liability protection would ensure that the entrepreneur can take risks without the fear of losing his/her personal assets or savings. One of the biggest advantage of a registered business (private limited company or limited liability partnership (LLP) or one person company) is that it provides limited liability protection to its members
Easy to Exit
In registered business entity like company or LLP, the business is considered a separate legal entity with assets and liabilities that are separate from its promoters. Hence, transferring or sharing the ownership of a registered business is easy. On the other hand, proprietorships can not be transferred as they are an extension of the proprietor.
Raise significant capital for your business
As a company, your ability to attract investors and raise money for your business will be easier. Registering your company gives you the ability to borrow and obtain debt but more importantly, sell shares and raise equity capital. As most banks and financial institutions prefer to lend to registered business entities. Hence, it is highly recommended to register a business if there are plans for raising debt or equity funds in the name of the business.
Enhance your brand image and improve the relationships with your customers and suppliers
Registering a company is important for any future dealings with third parties, Most large businesses that have a supplier selection criteria, tend to prefer to do business with a registered business entity than an unregistered business entity.With the parties entering into an agreement with the company instead of the owners.