It is important to know what business structure they should get in. In CFO Angle we sit with the business owners and understand their need for the type of legal structure. We explain them in details benefits and advantage based on inputs received. Typically online sites provided standard structure, but in inherent need and requirement is not explained.
It is One Person Company allows a single entrepreneur to operate a corporate entity with limited liability protection.
Limited Liability Partnership is between two or more entrepreneurs who wants a legal structure which is better than partnership and lesser than Company than form an LLP
To ensure the business inventions, brands and names are protected under intellectual property right it is important to take immediate actions to give them legal structure. Trademark & copywriting is important to protect our efforts.
Section 8 of the Companies Act, 2013, which pertains form establishment ‘for promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object’, provided the profits, if any, or other income is applied for promoting only the objects of the company and no dividend is paid to its members. Company registered under this section are therefore charitable or not-for-profit purposes.
This is the most widely used legal way of structuring the organisation. In the startup ecosystem where the co-founders are boot strapped and the risk are high members keeps coming and leaving. Being a private limited company with shareholding easily transferable it is easy to take and remove people. Also with a potential investor with big pockets they would always like to work with structured organisation, which this set-up provides.
A foreign entity can set up shop in India either through a liason or branch office or a subsidiary company under FDI. Government of India has set up rules for foreign direct investment in India which allows foreign entities to invest in India with certain % of equity holdings.