Having confirmed that you are taking on Entrepreneurship, let us see the first step of Registering the business. You have options of Registering as Proprietorship, Partnership, Limited Liability Partnership (LLP) & Private Limited Company. It all depends on how you are viewing your business in coming years. If you want to keep it small and independent, you should keep it as Proprietorship. If you are having a partner with whom you want to go, go for Partnership firm. But Proprietorship & Partnership firms have one drawback. Just in case you are bankrupt, creditors can claim your property too. You & your business are one entity & not separate. Second, if you are thinking of taking bank loan or venture capital or private equity, you should rather go for Private Limited Or LLP.
If you want to go for supply to big companies or looking for investors then better go for Private Limited company. Since the accounts are audited, investors are willing to invest looking at balance sheet. If you are not willing to make it big, do not go for Private Limited registration. For small businesses LLP, Partnership or Proprietorship is best as accounting costs are also low.
LLP is best combination of Partnership & Private Limited company. Unlike Partnership, the firm & persons are different entities. The liability of partner is Limited to the firms liability. Creditors cannot force you to pay legally. Of course these things come only when you are not genuinely involved in business.
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