It is millions of small businesses that contribute largely to the development of India's socio-economic conditions. But an unregistered business could curtail this growth. This article lists 5 reasons why you should register your small business.
What Are Small Businesses?
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. Top 5 reasons to Register Your Small Business in India
Why Small Business?
Like large corporations, such businesses require smaller capital to function. Owing to the 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. Businesses usually manufacture spare parts and raw materials for the work of large companies.
If you own a business and still need to register, let’s walk you through 5 reasons you should consider registering it.
You don’t have to worry about creating a company name. Use the Vakilsearch Company Name Generator to view the list of available companies.
Limited Personal Liability
Let’s say you borrowed a loan from the bank to run your unregistered business. Due to some reasons, your business suffered losses. As the loans were taken in your name, you will be personally liable to repay the loan. If you fail to repay the business loan, the bank might attach your assets like your car, house, or any property you own.
The bank would recover the loan from your business assets if you registered your business. So registering your business protects your assets from your business actions.
Transferability 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 the firm’s properties and face constraints during the share transfer process.
Easy Fundraising for Businesses and Greater Credibility
As your credibility increases, you can procure better loans and investors with a registered business. Banks and other credit agencies provide the least weight to entities that are not lawfully registered. And so, you might need help to grab a bank loan for your entity.
You can raise significant capital for your business by registering it. Credible Investors are most likely attracted to legal businesses, hence reducing the risk of fraud.
Brand reputation and Better Opportunities to expand
Your brand might get better recognition when your business is legally registered. A registered entity creates a brand name and value in people’s minds. People usually put their faith in entities that are lawfully acknowledged. It establishes credibility with your stakeholders and clients.
Registration of your business attracts newer opportunities and markets. The doors to larger markets and corporations open when you own a registered entity. Most large businesses have supplier selection criteria and tend to hire or engage only with registered businesses.
Perpetual Succession
A registered entity continues to exist even after the owner’s demise or withdrawal. It becomes everlasting until the shareholders decide to dissolve it or until the entity is merged with some other business.
The Bottom line
Registering your business allows you to grab power in the market. You might be building something that will 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.
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