LEGAL STRUCTURE FOR TRAVEL START- UP

Sole Proprietorship Registration

A Sole Proprietorship is a type of enterprise that is owned and run by a single person who is in direct control and legally accountable of the business. Sole proprietorship’s are one of the most common forms of business in India working in the unorganised sectors including new & experienced business people.

Proprietorships  have very minimal regulatory compliance requirement for operating. However, after the startup phase, proprietorship’s do not offer the promoter a host of benefits such as limited liability proprietorship, corporate status, separate legal entity, independent existence, transferability, perpetual existence – which are desirable features for any business. Therefore, proprietorship registration is suited only for unorganised, small businesses that will remain small or have a limited period of existence.

Government of India do not provide any or the registration of a Proprietorship. Therefore, the existence of a proprietorship must be established through tax registrations and other business registrations that a business is required to have as per the rules and regulations. For instance, VAT or Service Tax or GST Registration can be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship. Thus, all the registrations for a proprietorship would be in the name of the Proprietor, making the Proprietor personally liable for all the liabilities of the Proprietorship.

The average time taken to complete a proprietorship registration is 3 – 5 working days, subject to government processing time and client document submission.

 

Documents required

 

1.Identity & address proof

All directors and shareholders of the company ought to submit Address & Identity proofs.  If he/she is an Indian nationals, PAN is mandatory. For foreign nationals, apostilled or notarised copy of passport must be submitted mandatorily. All documents submitted must be valid. Residence proof documents like bank statement or electricity bill must be less than 2 months old.

2.Office Address

All companies must have a registered office in India. To prove access to the registered office, a recent copy of the electricity bill or property tax receipt or water bill must be submitted. Along with the utility bill, rental agreement or sale deed and a letter from the landlord with his/her consent to use the office as a registered office of a company must be submitted.

 

Why should you go for it ?

 

1.Easy to start

It is one of the easiest form of business entity to start with minimal formalities. However, after starting up a Proprietorship, it is relatively harder to open a bank account or obtain a payment gateway in the name of the business – since more registrations like VAT or Service Tax or GST Registration may be required.

2.Business name

The proprietorship can choose to have any name – as long as it does not infringe on  registered trademark. However, since the name is not registered, any other person can also use the same business name unless trademark registration is obtained.

3.Single promoter

Proprietorship is the only type of business entity that can be registered and operated by one person. To register a one person company, a nominee Director is required and no other promoters unlike in the case of several other company businesses.

4.Lower taxes

Proprietorship with less than Rs. 3 lakhs of income is not required to pay any income tax, therefore they enjoy the reduced tax liability.

5.Easy to close

The Proprietor and the proprietorship are one and the same for all legal purposes. Hence, there is no formality for winding up or closing a proprietorship. In most cases, to close a proprietorship, only the tax registrations obtained in the name of the proprietor must be cancelled.

 

 

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Courtesy : http://pluspng.com

 

Partnership Registration

A Partnership is one of the most important forms of a business organization, where two or more people come together to form a business and divide the profits thereof in an agreed ratio. A Partnership is easy to form, and the compliance is minimal as compared to companies.There are two types of Partnership firms, one is the registered and the other is un-registered Partnership firm.  Partnership firms are created by drafting a Partnership deed among the Partners.

BookOworld.com can help you start your own Partnership firm.

 

Why should you go for it ?

 

1.Easy to start

A Partnership is easy to form as it involves  hassle free legal formalities. The registration is not mandatory. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

2.Business name

Since the name of a Partnership firm is not registered, a Partnership firm can choose to have any name – as long as it does not infringe on a registered trademark.

3.Partnership deed

In a Partnership firm, the partnership deed will determine the ownership of the firm, profit sharing ratio, rights and responsibilities of each of the Partner. A partnership deed can be registered with the Registrar.

4.Annual filing not required

A Partnership firm is not required to file its annual accounts with the Registrar each year unlike a Limited Liability Partnership or Company. Limited Liability Partnership’s and Company’s are required to file their annual accounts with Registrar of Companies each year.

5.Documentation

Bank account can be opened in the name of a Partnership firm. To open bank account, the partnership deed copy and KYC documents of the Partner must be submitted along with any other document as required by the Bank.

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Courtesy : http://pluspng.com

 

Limited Liability Partnership Registration

Limited Liability Partnership (LLP) was introduced in the Limited Liability Partnership Act 2008. In the traditional partnership,  each partner has joint and several liability whereas in a LLP, some or all partners have a form of limited liability. It therefore can exhibit elements of partnerships and corporations.

In a LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP enjoying a form of limited liability protection for each individual within the partnership, similar to that of the shareholders of a private limited company.

It is more flexible to organize the internal structure of LLP. There is no maximum limit for the number of partners in LLP whereas, in the private limited company, shareholders are limited to the extent of 200 shareholders.Raising and utilization of funds depends on the partners’ will. Funds can be bought and utilized only as per the norms listed under the Companies Act, 2013. LLP is exempt from Dividend Distribution Tax (DDT).

The average time taken to complete a LLP registration is about 15 – 20 working days, subject to government processing time and client document submission.

 

Why should you go for it ?

 

1.Separate legal entity

A LLP has wide legal scopes and rights to own a property and incur debts. However, the Partners of a LLP have no liability to the creditors of a LLP for the debts of the LLP.

2.Uninterupped Existence

A LLP being a separate legal person, is unaffected by the death or other departure of any Partner. Hence, a LLP continues to be in existence irrespective of the changes in ownership.

3.Easy transferability

The ownership of a LLP can be easily transferred to another person by inducting them as a Partner of the LLP. LLP is a separate legal entity separate from its Partners, so by changing the Partners, the ownership of the LLP can be changed.

4.Audit not required

A LLP does not require audit if it has less than Rs. 40 lakhs of turnover and less than Rs.25 lakhs of capital contribution. Therefore, LLPs are ideal for startups and small businesses that are just starting their operations and want to have minimal regulatory compliance related formalities.

5.Owing property

A LLP being an artificial judicial person, can acquire, own, enjoy and sell, property in its name. No Partner can make any claim upon the property of the LLP unless there is an internal issue among them.

Courtesy : http://pluspng.com
Courtesy : http://pluspng.com

 

Private Limited Company Registration

Private Limited Company is the most prevalent type of business entity focusing on private ownership in India. Private limited company registration is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014.  A private limited company, or LTD, is a type of privately held business entity, in which owner liability is limited to their shares, the firm is limited to fewer shareholders, and shares are prohibited from being publicly traded. A company becomes an independent legal structure when it incorporates.

To register a private limited company, a minimum of two shareholders and two directors are required. A natural person can be both a director and shareholder, while a corporate legal entity can only be a shareholder. Further, foreign nationals, foreign corporate entities or NRIs are allowed to be Directors and/or Shareholders of a Company with Foreign Direct Investment, making it the preferred choice of entity for foreign promoters.

Factors like limited liability protection to shareholders, ability to raise equity funds, separate legal entity status and perpetual existence make it the most recommended business entity for millions of  businesses in keen aim of growth in the corporate industry.

The average time taken to complete company formation is about 10 – 15 working days, subject to government processing time and client document submission.

 

Why should you go for it ?

 

 1.Separate legal entity

Private Limited Company is a legal entity and a juristic person established under the Companies Act. Hence, a company has a range of legal capacities including opening of a bank account, hiring of employees, taking on equity or obtaining licenses and more as an independent corporate entity. The members  have no personal liability to the creditors of a company for company’s debts.

2.Uninterupped Existence

Private Limited Company has ‘perpetual succession’, meaning uninterrupted existence until it is legally dissolved. A company being a separate legal person, is unaffected by the death or other departure of any member and continues to be in existence irrespective of the changes in ownership.

3.Easy Transferability

Ownership of a business can be easily transferred in a company by transferring shares. The signing, filing and transfer of share transfer form and share certificates is sufficient to transfer ownership of a company. In a private limited company, the consent of other shareholders maybe required to effect share transfers.

4.Borrowing Capacity

Private Limited Companies can raise equity funds in India. Companies can also issue equity shares, preference shares, debentures and accept deposits with RBI permission. Banks and Financial Institutions prefer to provide funding to a company rather than partnership firms or proprietary concerns.

5.Owing Property

Private Limited Company being an artificial person, can acquire, own, enjoy and alienate, property in its name. The property owned by a company could be machinery, building, intangible assets, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company – as long as the company is a going concern.

BookOworld.com can help you provide Registeration  services including private limited company registration, one person company registration, Nidhi Company Registration, Section 8 Company Registration, Producer Company Registration and Indian Subsidiary registration.It is one of the most trusted group you can incorporate with for an efficient working process, as the customers’ satisfaction is their only priority.

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Courtesy : www.infographicdesignteam.com

Get a free consultation for a business startup by scheduling an appointment with an BookOworld.com  Advisor.

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