Business Registration in India- Is it Really Worth It

  • October 07, 2022
  • Dushyant Sharma
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In this article we will be discussing some of the benefits of business registration in India.

In order to register a business in India there is a complete step by step procedure that is required to be followed by the aspiring entrepreneurs. Due to the time and cost involved in this procedure most of the organizations does not opt for business registration and operate as unregistered business unit.  However, now with the efforts government of India and ministry of corporate affairs the process of business registration in India has been made simpler.  Due to which the total number of companies registered in India rose to 15.27 Lakhs from the 15.19 in the month of December.  With company registration in India come the multiple benefits for the owner.

Limited Liability

With company registration in India come the benefits of limited liability for the owner. When your company is registered in India the promoters of the business are not personally liable for meeting the liabilities of the company.  Thus, the personal assets of the promoter are not at the stake for meeting the liabilities of firm unlike the unregistered organizations.

Ease in raising funds for Business

In order to expand the business activities every business units has to raise funds with the equity capital or debt.  It is not possible for the unregistered business units like proprietorship or partnership firm to raise equity funds.  Moreover, most of the financial institutions and the banks prefer to lend the money to the registered organization than to the unregistered organization. Thus for the long prospectus it is highly recommended to get your business registered in India.

Ease of transferability

In case unregistered business there is no specific delegation of assets to the proprietor and the proprietorship is just an extension of the proprietor only. This makes it hard for to transfer the business. On the other hand the registered companies have the separate legal entity than its owner that makes it easier to the transfer the business.  

Hassle free opening of the bank account

In the eyes of law the registered business in India is a separate legal entity thus it is easier to open a bank account.  The registered company can simply submit its certificate of incorporation and memorandum of association. On the other hand the unregistered business unit does not have any legal proof of existence. Due to whichthe identity of the firm can only be established through the different tax registrations to open a bank account.

Improves the image of the company

The registered company has the better image than the unregistered company from obvious reasons. Customers find it easier to put trust in registered company than unregistered company.  thus, registration improves the image of your company.  

Helps in attracting better talent

The young and talented people look forward to work with big and registered companies rather than unregistered business units. Thus, registering a business helps in magnetizing the talented personal.

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Dushyant Sharma
Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.

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