Essentials of Companies and Business Registrations
Imagine that you are standing on a road to the journey of entrepreneurship. It has several divergences, all giving their own experience along the way to entrepreneurship. You are all ready to embark on this new journey in your life. With all the major tools that you need to start with your dream trip of entrepreneurship, you have the idea that you wish to transform into a thriving business reality—a vision that you are going to bring to reality with your smart work and determination. Now the question that you must decide on is what type of company you wish to start. A sole proprietorship or partnership?
Selecting the right type of company is a very essential aspect of starting your business. It is going to determine many important positioning decisions for your company. Each type of company you can choose from offers you a different range of perks and limitations. Therefore, before you decide on the type of company, let this article be your guide to understanding the types of companies and the one for your business.
Table of Contents
The Solo Voyage: Proprietorship
It is a solo venture that you are doing. You play all the roles in it. The sailor and the navigator are all in one role. The benefits and pitfalls are all endured by you single-handedly. The taxes involved in it are paid like personal income tax from the profit. Your and your company’s finances are the same. The owner is fully liable in this case. You need to get a business licence and other essential permits needed to start your company. Now, if you are a proprietor in a Tier-2 city like Indore looking for a workplace for your new company you can reach out to a coworking space like Virtual Coworks for a rented office space, you can also get assistance in getting the documents required for business registration, or GST registration of your company. You will need documents for these registrations so a virtual office in Indore can provide you help with these documents like NOC, Rent Agreement, and Utility Bills.
Joining Forces – Partnerships
Sailing through the ocean of businesses offers enough storms for you to lose your direction. In such cases, you share the steering wheel with someone who is ready to take the risk and is a great travel partner. Yes, we are talking about partnerships. From a Limited Liability Partnership (LLP) to a general agreement partnership, we will navigate the liabilities, dynamics, and perks of doing business as a team. Subsequently, if you are a partnership firm in an economic hub city such as Indore looking for a workspace for your new company, you can contact a collaborative workspace which will provide you with office space on lease. You can also get assistance in obtaining the documents required for your company’s business registration or GST registration. For these registrations, you will need supporting documentation, such as an NOC, a rent contract, and utility bills, which a virtual office in Indore could obtain for you.
Limited Liability Partnership (LLP)
The liabilities involved on the part of each partner are proportional to the amount they invested in the setting up of the company. The bigger the investment, the greater the liability, and vice versa. Having business partners entails sharing the risk, utilizing talents, and creating a hierarchy of tasks. In this case, the partners are protected because, in the event of a risk or failure of the partnership, the partners’ personal property is not subject to creditors.
Renting an office space that will provide you with a day pass, monthly pass and also customized packages as per your need with 24/7 access will be in favour while setting up your company with a partner as in this limited liability partnership you can easily limit your expenses and cut short on unnecessary investment.
Virtual Office in Indore could also be your saviour in this as they can assist you with the paperwork (like NOC, Rent papers, electricity bills, etc.) in regards to your company registration and other legal formalities that may look like an added burden while in the initial phase.
General Agreement Partnership
An official document containing the terms and conditions of a partnership is known as a partnership agreement. The partners can have a verbal or written partnership agreement. It is referred to as a “partnership agreement” when the partnership agreement is drafted. It details each partner’s rights, obligations, liabilities, and tasks, as well as the profit and loss sharing ratio, significant company characteristics, interest on invested capital, capital contribution by all partners, and other relevant data. In short, it is a sphere of shared workspace and shared workload. Further, it is distributed in two parts:
Partnership Deed
In this, we have a notarized affidavit made of INR 1000 or 2000. It is a written agreement between two people who resolve to operate a business together, regardless of past financial success or failure.
Registry with the Registrar
This entails submitting a duly signed application in the required format (Form A) to the Registrar of Companies. The partners involved are required to pay the charges and stamp duties.
To conveniently control your costs and avoid making unneeded investments, hiring a managed office space with fixed workstations and flexible workstations would be advantageous when starting a business with a partner. Virtual office services in Indore can also help you with documentation (such as NOC, rent documents, power bills, etc.) for the business’s GST registration along with other legal procedures that may appear to be an added burden during the early phase.
Building Limited Companies
A type of general incorporation that restricts the amount of liability assumed by the business’s investors is known as a Limited Company (LC). It implies a regulatory framework that guarantees the liability of business members or followers is constrained to the amount of investment or commitment they have made to the company.
While setting up a limited company in a city like Indore capital investment needs to be huge, and initial phase obstacles of gaining the right directors and required shareholders could be pressurizing enough all this if you had to think about your office space in Indore and you need to have an office in the commercially acclaimed region of the city to build required trust among your clients and shareholders is an added baggage. You can easily and satisfactorily put this baggage down by reaching out to a coworking space that will provide you with prestigious office address along with all the added amenities like private cabins, shared hot desks and conference room access that you might need to run your company easily.
Virtual Coworks could be your place as it is not only premium shared office space but also a office address location in a prime area of the city.
Limited Companies are divided primarily into three types:
Private Limited Company
A private limited company needs a minimum of two directors, and the minimum to a maximum range of shareholders is from two to two hundred. The share transfer and loans taken are restricted to the shareholders, partners, and families; no public deposits are accepted in them.
Public Limited Company
Large companies fall into this category. The minimum and maximum numbers of directors are three and fifteen, respectively. While sticking to the government’s regulatory guidelines, the company’s shares could be issued in public. A minimum of seven shareholders is a must for a public limited company.
One-Person Company (OPC)
A one-person company (OPC) is a company founded with only one person as a member, unlike the conventional way, which requires a minimum of two people to start a company. By increasing their chances through corporate identity, small traders and service providers have an easier time starting their businesses thanks to the recognition of single-person economic entities. It only has one shareholder. Although there could be one or more directors on the board, only after being operational for two years can it be converted into a private limited company.
Conclusion: Setting Your Direction
As we reach the end of our route map study, I hope you have started to navigate your personalized route ahead. Whether you wish this entrepreneurial journey to be a solo trip or a group expedition for you is your call, but deciding it before you embark on the route is important. Pre-decision will help you lay out the framework of risk management and profit allocations. Chart out your vision and purpose to make this decision easier.
So, fasten your seatbelts, explorer, as you sell across the vast ocean of the business world and navigate the path that is right and unique for your vision to turn into your reality.
While you make these major decisions you can definitely decide on taking up a collaborative office space with all the amenities like meeting room access, lounge room, cafe, printing machine, etc. for your company to cut short on one more major decision regarding your company’s working. Virtual Coworks offers you office space in Indore’s 4+ prime locations. They also provide you with the services of business address, company registration and GST registration.
