How to check Company registration myths and debunk
Overview: Company registration myths and debunk
Company registration myths and debunk in which company registration is the natural first step in starting a business because it provides many incentives. Although registered companies have far more benefits than unregistered companies, most companies in India are sole proprietorships or partnerships.
In every corner of the country, more than ever, the importance of company registration needs to be emphasized. Due to various myths and misunderstandings related to the company registration process, Indian entrepreneurs are reluctant to adopt a company structure. Let us debunk ten basic assumptions about the entrepreneurial process.
We have selected some of the most common business registration myths in India to get a clear understanding of what the law allows. The law affects your business to avoid costly mistakes.
(1) Myth- The company headquarters needs to register the company.
Debunked- You can legally register your business in a residential area. Many entrepreneurs do not know that they can legally set up a limited liability company in any residential area. The 2013 Company Law did not impose restrictions on the registration of new businesses in residential areas, but required companies to provide their names and registered addresses at every location where they operate.
(2) Myth- Applicants must submit original documents.
Debunked- Accept the scanned copy formally certified by the applicant. To deceive and deceive entrepreneurs who do not know the actual procedure, the original documents are never required. Galaxy file during company registration.
(3) Myth- Need to register for consumption tax.
Debunked- There is a misunderstanding that it is necessary to register for consumption tax, which is incorrect. Only those who provide taxable services need to apply for GST registration. It does not exceed the threshold set by the government, which allows small service providers to enjoy the tax-free treatment of goods and services.
(4) Myth- Registering a company requires a minimum annual turnover.
Debunked- Sale of business registration, It is also possible to register a new business that generates little or no revenue.
(5) Myth- The distribution of shares among directors is a mandatory requirement for company registration.
Debunked- It is a myth that all directors of a company must own shares. Shareholders who invest funds in a company do not need to be directors. They do not need to own shares in the company.
(6) Myth-The tax rate applicable to private companies is unfavorable.
Debunked- The tax rate of a private company can sometimes be higher than the tax rate of a sole proprietorship or partnership. However, corporate income tax is calculated after deducting expenses from the income. This benefit does not apply to sole proprietorships and partnerships. In addition, registered companies can enjoy higher tax incentives.
(7) Myth- Only people can invest in a company.
Debunked- Only people can own or share a company is completely wrong. According to the law, a company is a legal entity, so a registered company can also invest in the shares of another company.
(8) Myth- the company’s share capital must be deposited in the bank at the time of establishment.
Debunked- Limited has great flexibility. The company’s share capital does not have to be deposited in a bank when it is established. Even if your business is open, all changes regarding capital, business, official address, etc. are possible from today.
(9) Myth- The company is expensive to maintain.
Debunked- The myth that a company’s maintenance costs are very high is fragmented. In terms of accounting, regulatory compliance, and tax reporting, the cost is extremely low. Vakilsearch can provide your business with these services at an affordable price.
(10) Myth- Business registration must be updated every year.
Debunked- It is not mandatory to renew your business registration every year. One-time registration of your company is sufficient. In addition, if your company does not pass the judicial dissolution process, your company will be registered with the MCA until the time expires.
Conclusion:
In the end, don’t be fooled by myths and misunderstandings, but research yourself, and CA In Delhi provides reliable and trustworthy company registration information official channels. In addition, our business registration services are inexpensive. Contact us now and let our qualified experts advise you on legal issues.