The most common thing or the first step to starting any kind of business is business registration. It is a very important step to achieving success in the business world. There are a lot of options available to get registration for an entity like one person company, LLP, private limited company etc. Registration gives many benefits to small businesses; hence, it is always suggested that small businesses register themselves. If you are a small business owner, you should register your small business. It will not only give access to benefits and advantages of the government but also, there are many other plus points of registering a small business. The current blog will discuss the five reasons you should register your small business in India. This will encourage the entrepreneurs or the owners of the small business to register their business.
What are Small Businesses?
Businesses that got started with less capital investment and mostly run through the day-to-day business are known as small businesses. These are the intrinsic parts of the Indian economy. They not only provide opportunities in the country but also help the Indian economy to grow and develop. Because of the numerous contributions of these small businesses, the government gives them various exemptions as well as advantages. While getting those exemptions, registration of business is really helpful; that is why it is advisable to register your small business.
Benefits of Register Your Small Business
Given below is the list of various benefits that come with the registration of the business. And because of the following benefits, you must register your small business:
- Small business becomes the incorporated association
- Gets a separate legal entity, which makes it distinct from its members
- Got recognition as an artificial person who has all the rights of a natural person
- The common seal of the name of the entity
- Build customer trust that will gradually help a business achieve success
- Gives credibility and reliability to the business
- Makes business easy and smooth
- Can help while maintaining transferability
What are the Five Reasons you Should Register your Small Business?
In general, there are multiple reasons why you should register your small business. Out of the multiple reasons, five are given below with their details:
Transferability of Shares
One particular reason for the popularity of joint stock companies is that the shares are capable of being easily transferred. The Companies Act contemplates this feature by declaring the shares and debentures for other relevant interests of any member in an incorporated company shall be a movable property that is transferable only in that manner that has been provided or given under the article of the company. However, in the case of private companies, certain restrictions are placed on the right of a member to transfer his share. However, the restriction does not mean shares cannot be transferred.
Limited Liability
One of the key advantages of doing business through the medium of a limited company is that the members who are the intrinsic part of the company are just liable to contribute payment of its death to a limited extent only. If the company is limited by shares, the shareholder’s liability to contribute is measured by the nominal value of the share he holds plus any premium agreed on when the shares were issued. He is no longer liable to contribute anything further; however, the companies may be formed with unlimited liability.
On the other hand, members of the unlimited liability companies shall be liable till each and every paisa has been paid off. In the case of companies that are limited by the guarantee, the liability of each member associated with the company shall be determined by the guarantee amount. The member of the company is liable to pay only that amount for which he or she has given a guarantee.
Perpetual Succession
A company, as an artificial person, cannot be incapacitated due to illness or any other thing. It does not have a pre-allotted life span or span of life. The company and its members are completely distinct; hence, the death, insolvency or retirement of any of its members leaves the company unaffected. Members may come as well as go, but the company can be established forever. It continues even if all its human members are dead. Even during the war, all the members of a private company, while in general meetings, were killed by a bomb the company survived, and not even a hydrogen bomb destroyed it. That is one of the main reasons customers get attracted towards such entities; therefore, you must register your small business.
Easy Expansion
After registration, small businesses can easily build trust in the market. This will attract customers as well as investors towards your small business, and this will be helpful in the expansion of the business. From the perspective of business expansion, business registration is needed. It will help the business owner to get its business easily expanded in the market among the competitors.
Online Registration
The process of registration of an entity is online according to company law. Online registration is possible with the help of the Ministry of Corporate Affairs. Through the portal of MCA, one needs to file an application for registration before the registrar of companies. This can be done while sitting at home if you have knowledge about the same. Even if you are not aware of the process, with the help of professionals, you can easily get business registration for your small business. For all the small businesses, it will be really convenient to register their small business.
Conclusion
To register your small business in India offers a host of compelling advantages, including share transferability, limited liability, perpetual succession, simplified expansion, and the convenience of online registration through the Ministry of Corporate Affairs. These benefits not only provide legal recognition and financial protection but also instil trust, attract investors, and enable seamless growth. Small businesses are pivotal to India’s economic landscape, and by taking this crucial step, entrepreneurs can position their ventures for success, contributing to both their own prosperity and the nation’s economic development.
