Millions of small businesses contribute significantly to India's socioeconomic development. However, an unregistered business could stifle this expansion. This article will provide you with five reasons why you should register your small business.
Business establishments that are small in size generate a huge amount of money that helps grow the Indian economy. Small businesses are those entities that employ fewer people. It could be small corporations, proprietorship businesses, or partnership businesses.
Benefits of Registering
Such businesses, as compared to large corporations, require less capital to function. Owing to their smaller size, these establishments can easily adapt to changing structures and business atmospheres. This enhances flexibility and adaptability in business. Larger companies usually rely on businesses for the completion of their work. The manufacturing of spare parts and raw materials is usually done by businesses for the work of large companies.
If you own a business and haven’t yet registered it yet, we’ll now walk you through 5 reasons you should consider registering it.
Transfer ability of Shares
If registered, you can transfer ownership of your business or its shares to another person whenever appropriate. Unregistered businesses usually have a complex assessment of their properties and face constraints during the share transfer process.
Limited Personal Liability
Let’s say you borrowed a loan from the bank to run your unregistered business. For some reason, your business suffered losses. You will be personally liable to repay the loan. The loans were taken in your name. If you fail to repay the loan, the bank might attach your personal assets, like your car, your house, or any property that you own.If you had registered your business, the bank would have recovered the loan from your business assets. So, registering your business protects your personal assets from your business actions.
Easy Fundraising for Businesses
Having a registered business name such as “pvt ltd” can enhance your ability to secure better loans and attract investors. Banks and other credit agencies typically place more trust in legally registered entities. Without proper registration, you may encounter challenges in obtaining a bank loan for your “pvt ltd” entity
Brand Reputation
Your brand might get better recognition when your business is legally registered. A registered entity creates a brand name and value in the minds of people. People usually put their faith in entities that are lawfully acknowledged. It establishes credibility with your stakeholders and clients.
Greater Credibility
You can raise significant capital for your business by registering it. Credible investors are most likely attracted to businesses that are legal, thereby reducing the risk of fraud.
Better Opportunities to Expand
Registration of your business attracts new opportunities and markets. The doors to larger markets and corporations open when you own a registered entity. Most large businesses have supplier selection criteria. They tend to hire or engage only with registered businesses.
Perpetual Succession
A registered entity, through new company registration, continues to exist even after the demise of the owner or their withdrawal. It becomes everlasting until the shareholders decide to dissolve it or until the entity is merged with another business.
The Takeaway
Registering your business allows you to grab power in the market. You might be building something that is going to be big and popular in the future, but if you don’t do something as basic as registering your business, you might lose everything you built, or worse, your hard work might be taken over by someone else.
