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9 Vital Advantages of Company Registration in India

Advantages of Company Registration in India
Admin 2023-01-27

Company Registration in India is a prominent process. But it is necessary to know about the significant advantages of the process. So this blog will help you out. 

A company can be described as an artificial entity that is invisible, intangible, legally created, and has an individual legal identity, perpetual succession, and an official seal. 

The company isn't affected by the demise or insanity of any individual member. Let's look at the most significant benefits of company registration in India instead of a Proprietorship firm (or Partnership) Firm.

  • Legal Entity

A legal entity with a genuine existence. This is an unnatural entity made by law. Its presence is distinct from the directors and shareholders. The entity is considered a juristic individual that the Companies Act established. 

The term "juristic person" denotes recognizing an entity as legal under the law. It has the right to sue and even be sued on its behalf. An incorporated company enjoys the rights of its owners, carries its liability, and manages its legal procedures. 

After company registration in India, a business has its character. It can exercise a more comprehensive legal status after company registration in India check, having its property and liable for obligations. 

The company's members are responsible for no obligation to the company's creditors on debts.

  • Perpetual Succession

Perpetual succession is the term used to describe a continuous or lasting for the rest of time, meaning the business is forever. It signifies a company's continued existence until it dissolves legally. 

Perpetual succession is a crucial aspect of company registration in India. As previously mentioned, it is a distinct legal entity unaffected by any member's death or departure. 

Whatever changes happen to members, membership employees, shareholders, or members, none of it could alter its existence once it is incorporated; it is alive and in compliance with its obligations under the Companies Act.

  • Limited Liability

Limit Liability is the legal obligation to a specific quantity of debts. The liability of members for the company's debts is restricted, i.e., only the value of the shares purchased by them. 

The exception of company registration in India is when members have signed a contract to unlimited liabilities, but the terms and conditions may differ. These are referred to as complete companies.

  • Free & Easy Transferability of Shares

The shares of a company are restricted by the shares bought. Shareholders can transfer the stakes to someone else. Shares are transferable to anyone the shareholder decides. 

A copy of the form for transfer will be given to the purchaser of shares, along with a share certificate. 

Technically, there aren't limitations on the transfer of shares in a public limited corporation. Therefore, a shareholder can transfer shares to anyone who wishes to. 

Securities or any other interest of a publicly-traded corporation can be freely transferred. However, any agreement or contract concerning the transfer of protection can be enforced as an agreement. 

For Pvt ltd company registration in India, the law permits private corporations to place limitations on the transfer of shares. There is minimal restriction on shares.

  • Property Ownership

A company can acquire the right to own, enjoy, or take possession of the property on its behalf of company registration in India. Shareholders cannot claim the company's assets since they are not shareholders of the business. 

A shareholder is interested in the industry that arises from the company's articles of association, which amounts to the obligation amount. 

The shareholder is not entitled to the right to share in the business profits. 

However, the shareholder is bound by the agreement in the Articles of Association. Therefore, the company's property isn't a single member's property.

  • Can Sue or Be Sued

Someone can take legal action in their name at company registration in India. 

The company, independent of any legal person, may pursue legal action under its company's name against someone else. This could include name change mergers, demergers, or mergers.

  • Dual Relationship

The company can sign agreements or contracts with one member. There is a possibility for one to control the business operations while remaining employed by the business. 

Company registration in India means that a person could simultaneously be a shareholder, creditor director, and business shareholder.

  • Borrowing Capacity

Businesses have the benefit of borrowing money. They can take debentures and issue them to the public. 

The company can draw the attention of financial institutions like banks and other institutions to offer more financial aid.

  • Equity Raising

Companies are the sole legal entity assisting promoters in raising equity capital via Angel Investors, Private Equity Firms, and the Stock Exchange. 

Companies registered in Indian stock exchange will be sufficient to raise capital from equity investors like Angel Investors and Private Equity Investors. 

However, for the case of sharing or allotment to shareholders with more than 200, the use of a Limited Company would be required.

Kinds of Company Registration in India

According to various studies, India is a country that has the second highest number of businesses that are not registered around the globe. 

However, the number of Company registration in India process has continuously increased. 

Beginning with the first step: 

  • Identifying your business concept
  • Conducting extensive research and developing market trends
  • Creating your item or product
  • Searching for financing
  • Drafting your business plan in rough form

The Final Step to Realizing Your Entrepreneurial Dream Is Registering Your Company.

Selecting The Types Of Company Registration In India 

Companies may be registered as a sole proprietorship, private limited or partnership, limited liability, single-person company, etc. Each follows its own rules and regulations. 

Company Registration in India was arduous and costly, requiring legal complications. With the help of an expert, it's now easy and company registration in India fees are cost-effective and have a host of advantages.

  • Private Limited Company Registration In India

It is among the most sought-after types of registration and is widely used because it allows for more flexibility and less liability and offers a huge opportunity for expansion. 

Pvt ltd company registration in India enacted by the Companies Act 2013.

  • Sole proprietorship Registration in India

Also known as a sole trader business, within this kind of business, only one person is responsible for and is responsible for the business activities. 

It is very easy to establish, and there is no need for capital. There is no benefit of limited liability, and no legal distinction is made between the company and the owner.

  • Partnerships Firm Registration

The name implies that two or more partners run the partnership business. The partnership deed is written in which all the duties and obligations of the partners, as well as other conditions and goals, are defined. 

The advantages of Company Registration in India are that it's simple to get started without a lot of compliance and affordable.

  • Limited Liability Partnership Registration

Limited Liability Partnership, also known as LLP, was introduced in the first place according to the LLP Act in 2008. 

It offers owners a minimum liability and is simple to manage. One of the disadvantages of LLP is the fact that they can't efficiently accommodate stock options for employees and don't attract investors.

Top Reasons For Opting Company Registration In India

Here are some of the reasons to follow the process of Online company registration in India includes

  • Account Opening For Business

A current bank account is an essential requirement and a vital asset for any company, whether a sole proprietorship or partnership, private limited, etc. It serves as legal evidence of the existence of the business. 

When opening a bank for business to a private limited business in a particular state, documents required for company registration in India like the memorandum of incorporation and the certificate of association should be provided. 

However, no such documents are required for partnerships and sole proprietorship firms.

  • Transfer Ownership Of Property Easily

At some point, it is inevitable to need to transfer control of the business. In these situations, it gets more difficult for businesses that are not registered entities. 

Sole proprietorships can't be sold, but solely the transfer of assets can be completed. On the other hand, transfers of shares and business-related documents for company registration in India are easy for entities legally registered as limited private corporations or LLPs.

  • Protection Against Limited Liability

Every business can be liable for losses; one of the major benefits of online company registration in India is that it provides only a small amount of liability protection, which means that the promoters of the business aren't responsible for the obligations of the company. There is no chance of losing personal property.

  • Secure Financing

Looking for and securing funding shouldn't be overlooked to move your business forward. It could come in the form of equity or debt. 

Registered Company in India facilitates the funding process and helps attract many prospective investors. 

Additionally, most finance companies and banks prefer to lend to registered entities over unregistered companies.

  • Brand Recognition

An established business can be the most valuable asset that has the potential of passing on in the form of inheritance to the next generation or even transferred to new entrepreneurs. 

 

Online company registration in India is essential to ensure its longevity. Online XBRL is the leading platform for company registration in India. So Connect today for more info.