Incorporation of a company - accuprosys

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A Primer on Business Incorporation for Startups
and Small BusinessesCorporate legal Services
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Startups face a number of issues at the very
start, and everything, be it the business
structure, logo or company name is subject to
legal concerns. Most startups looking to get
their business incorporated face trouble while
choosing the business structure of right legal
form for their business. While getting a business
incorporated, choosing the right legal structure
is essential.

• There are a number of options that include
  private limited, public limited,
  sole-proprietorship, limited partnership, limited
  liability, etc.

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To decide the best form for incorporation of
company, businesses should first consider the
associated liability issues of the company and
the tax structure of each business form. The kind
of legal form you choose for the company has a
bearing on your personal risk in association with
the business and also your potential for
financial returns.
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When in doubt, it is always best to seek
corporate advisory services from corporate law
firms that will not only help in deciding the
right legal form but will also handle the
formalities associated with incorporation.
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• If a business has assets that are appreciable, it
  is preferable for it to be a limited liability
  company (LLC). This is because, in case of an
  LLC, the assets of the business are considered as
  personal assets and there is not distribution
  required upon termination of business. There is
  no tax obligation unless the assets are actually
  sold.

• While considering options for incorporation of
  company, one of the essential factors one needs
  to consider is business asset appreciation.
  Whether or not the business assets will increase
  in value over time (appreciate) is a determining
  factor.

Accuprosys.com
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• Liability protection is another factor that
  companies need to consider while incorporation.
  Some legal forms of business offer liability
  protection while others dont. If the type of
  incorporation you choose does not consider your
  business as a separate legal entity from you,
  then your personal assets will also be considered
  to be a part of the business and if your business
  is sued for some reason, it will put your
  personal assets at stake.

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In case of partnerships, your personal assets
might also be at stake for the actions your
partner may take. It is therefore critical to
assess any liabilities one may have, and in times
of confusion, expert advice in the form of
corporate legal services by consulting firms
comes in handy.
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Another aspect worth considering for
incorporation of company is the retention of the
firms earnings. The legal form that the company
takes dictates the tax structure that the company
will have to conform to. Some legal forms may
enjoy certain tax benefits that others may not.
It is more judicious to find out the tax
differences between the various legal forms of
firms to make the right choice with respect to
the companys earnings.
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Rather than meddling with corporate legal issues,
it is always better to do your homework before
filing incorporation applications. Most startups
fail to realize this and end up in losses arising
from penalties and legal litigations.
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Even before getting your business incorporated,
it is essential to question whether incorporation
is actually right for your business. Another
point to consider is that whatever legal form you
choose to take for your business, you can always
change that later as your business grows.
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Later on, as the business expands, these
businesses are incorporated formally as limited
liability companies, etc. in order to arrange for
protection against liability risks, for securing
the business entity and for taking advantage of
the tax benefits associated with incorporation.
For instance, most small businesses begin as sole
proprietorships, in which a single individual own
and manages the business and is personally liable
for business-associated obligations and debts.
Some others start their business as a partnership
with two or more owners and managers of the
business.
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Corporate advisory services can be sought to help
decide whats course is best for the startup or
small business. Incorporation in a way offers tax
and legal protection to business owners and thus,
its importance and sensitivity cannot be
underestimated.
Company incorporation has innumerable advantages,
some of which include protection from personal
liability, ease in raising capital, tax benefits,
credibility and longevity.
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Because an incorporated company has its own
separate status, it is a separate legal entity
from the owners. This implies that its owners are
liberated from personal liability even when the
company is sued for some reason.
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An incorporated company outlives its owners
because it continues to run even after the owners
leave. However, incorporation does have its
disadvantages. The incorporation and maintenance
of incorporation may come with added costs that
may prove to be a burden.
The owners are not at risk of losing their
personal assets. Incorporation also gives the
company its own corporate identity, adding
credibility in the market. Raising capital is
also much easier for an incorporated company
because investors consider it to be more credible
to invest in a company that is incorporated
rather than one which is not.
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In addition, filing for tax returns, maintenance
of business records etc. would be an added
burden. Also, the assumption that an incorporated
company is immune to liabilities is not entirely
accurate.
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It is thus always a good idea to understand the
various nuances associated with incorporation
through corporate law firms. Many firms also
offer to undertake all the paperwork at
cost-effective prices.
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If a company chooses to go for incorporation
after assessing liability risks, strategies and
tax obligations, it can submit application forms
at the Ministry of Corporate Affairs website. The
forms and documents can be submitted online.
While getting a company incorporated, business
owners should make sure they get their homework
done regarding every step the company will have
to undertake in the process. In addition, costs
and taxes associated with the process of
incorporation and after the incorporation is done
should also be found out. For more info visit
here http//www.accuprosys.com
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Accuprosys is one of the best corporate legal
service companies in India. The company, based in
Hyderabad, has a good reputation and is going
strong since its establishment.
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