Registering a company means registering and incorporating a business under the appropriate statute. Various requirements have to be fulfilled to register a company. Company Registration is an easy process and by understanding it, anyone can file for registration. A registered company has many advantages over an unregistered one. Also, the scope of expansion of business increases widely in case of registration, making it a preferable choice.
Which businesses can apply for registration?
Any business can initiate the process of Company Registration. A company could be registered as a Public or a Private company, depending upon the number of directors and shareholders it has. A company may also be registered if there is a single owner. Businesses could be involved in manufacturing or the service sector. The process of registration is the same for all businesses.
Thus, whoever starts a business or has a running business can apply for registration. This helps in receiving many benefits and gives the company a legal backing.
How to register a business?
Registration of a business can be done in a few steps. First, the name of the company, along with the directors’ and shareholders’ names, has to be mentioned. Other details regarding the address of the head office, nature and object of the company, etc will also have to be mentioned. Once, the appropriate details have been provided, the minimum amount of paid-up capital has to be met. After providing the necessary documents and complying with other statutory requirements, the process of Company Registration becomes complete.
Once the company has been registered, it will also receive a Certificate of Incorporation by the appropriate authority and then the business can be run under the Company’s name.
What are the benefits of Registration?
Many benefits follow Company Registration. These benefits might vary from country to country as they have different laws. Nonetheless, here are some of the benefits that are usually common to these countries:
- The Company becomes a legal person. It is treated as a person and its income is taxed. Also, in cases of losses, the assets of the company are attached and not the shareholders’.
- Shareholders have limited liability in the case of a Limited Company. Even if, after winding up of business, not all debts have been repaid, the creditors cannot ask the shareholders or directors to pay. Thus, with limited liability, the decision-makers for the company can take risks without worrying.
- Even if the directors or shareholders change, the company lives. Its life is not limited to its employees and employers. The company is a distinct legal entity and can only be wound up after it has applied for liquidation.
- The company can have its property. Capital assets can be bought in the name of the company and the company will have ownership rights over it and no one else. Thus, it can buy and sell a property like a normal person.
- It gets a common seal and a stamp. All the contracts are entered into in the name of the company. Thus, its name becomes its identity.
What are the different types of companies?
Many requirements have to be fulfilled before a person can get their company registered. Companies are broadly divided into public and private. In the case of a private company, the general public cannot buy shares without the approval of the board of directors. Also, the capital and means of raising capital are limited. On the contrary, shares of a public company are traded freely over stock exchanges and no prior permission of the Directors is needed to trade shares. Depending upon the amount of capital and number of directors, a company can either be registered as Public or Private.