Corporate registration comes under the Ministry of Corporate Affairs where the Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering the various States as well as Union Territories and are vested with the primary duty of registering companies. These ROCs have administrative control over the offices granted by the Central Government and function through the respective Regional Directors on regional levels.
The ministry of Corporate affair after registering a company ensures the protection and security of the investors, partners as well as other stakeholders of a company.
It might have come to you to register your company but if it has not, let us tell you why is Corporate Registration the primary thing after setting up your business. If you have been running an unregistered business or you are on the pathway to setting up a business in the coming months or years, this article will help you and clear your doubts about company registration.
First things first, if you own an unregistered business that is now a big name in the market but unregistered then someone else could use your company’s name, logo, goodwill etc without your knowledge and run their own business. Identity theft is a major problem when your business is unregistered. Someone could take all your hard work of years that you put into your business and use it for their benefits without your knowledge. And if at all that person fails in catering the Financial Accounting Outsourcing Services of your business, all your goodwill could go for a toss. Hence, to avoid identity theft, thus goodwill theft and risking your business and name in the market, registration is extremely important. It is legally accepted and registered with the law so if you have anyone claiming to be you, you could sue them legally and not have them reap the benefits of your sole hard work. It not only saves you but your investors, stakeholders and your loyal customers.
Moving further on in the article, we will tell you what are the types of business entities that exist and this will give you a clear idea about what you want to register your company under.
There is a concept of “limited liability” and as the name suggests it gives you the freedom to choose the amount you want to be liable to paying/losing in terms of any losses to the company. Your “limited liability” is generally the sum of money you invest in the company/business. The major benefit of a “limited liability” is that in case of any losses your personal assets are not taken into consideration for any recovery. It solely concentrates on the assets of the business and nothing else. This agreement does not only ensure the safety of your money but also keeps your personal assets safe.
Then we have “sole proprietorship” in which the business or the company is solely owned by only and only one person. There are no partners, stakeholders, investors other than the owner them self. Although sole proprietorship is simple and cheap in terms of registration with the government, it has one major downfall. In terms of sole proprietorship there is no distinction between the owner’s personal and business assets and hence he is liable to pay everything in cases of debts/losses.
Next is a “partnership firm” and it involves two or more partners. The partners in a partnership firm do not enjoy limited liability. However, they get to decide the investment percentage which will also be their loss and profit percentage in the company. Furthermore, partnership firms can have different types of partners namely – active/managing partner, dormant/sleeping partner, nominal partner, estoppels partner, etc.
Lastly we have “private limited (pvt.ltd)” which is another business entity usually owned by a small group of people (more than two). The members are also the shareholders and the owners of the business. Businesses and startups that aspire to grow big in the market and gain popularity leave a mark, etc mainly go for a private limited company registration. A private limited It Company Registration allows you to buy/sell stocks/shares in the name of the company and not an individual and thus remains unchanged even if a member joins or leaves the company.
In conclusion, the process of registration might sound a bit too much and cost some money but it is the best step for you to keep your business and name safe and secured legally. It is a little effort and some investment right now to save you from any losses in future. Registering a business in today’s world is extremely important and a smart move. And with this article we hope you have gained some clarity on the registration! Stay tuned for more.