How to register a company in Coimbatore?

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Registering the company is quite easy but choosing the right business structure is an important decision.

Here, we are going to see what are the different business structures, their pros, and cons.

The importance of choosing the right structure for company registration in Coimbatore is as equivalent to any other business-related activity, from engineering to design to marketing to sales to support. The right company registration and the business structure in Coimbatore allow you to operate with higher efficiency and meet the business objectives and targets which have been set by different departments of the business.

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Company registration in India is also a legal compliance which has to be done by businesses. When you are very sure about the basics, you also need to understand the process of how t0 register a company in Coimbatore. Keep your eye on this article for detailed information.

What are the types of business structure in Coimbatore?

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Before you get to know about the process of registering a company in Coimbatore, you must understand the basics of company registration and the types of business structures you can choose from. Here I have listed out some of the forms.

  • Sole proprietorship – In this structure, you will be the sole owner of a business. You can also employ the people based on your requirement. You will be responsible for all the business decisions.
  • Partnership Firm – A set of people carry out a business together and share the company’s profit and losses in a partnership firm. The partners can employ the staff but the partners are considered as business owners and not the employees.
  • Hindu undivided family (HUF) – The members of a family can start a HUF, it is considered as a separate legal entity.
  • Private limited company (PLC) – This kind of company has a separate legal entity from you. It has shareholders (owners), directors (who run the business) and employees.

Based on these factors, you can get the company registered under a business structure which is best suited to you. The popular business structures in a tabular form:

Company Suited for Tax benefits Legal compliances
Sole proprietorship Small merchants and traders Benefit from depreciation Tax returns for an individual have to be filed.

An audit, if required.

Partnership It is for a small business where two or more people can be involved. Benefit on depreciation. Tax returns to be filed.

Audit if applicable.

Limited liability partnership It’s a business with low investment or a service-oriented business. Benefit on depreciation. Tax returns need to be filed.

ROC returns has to be filed.

 

One person company Sole owners who wants to limit their liability Under startup India, for the first 3 yrs. there is no taxation.

Benefits are higher on depreciation.

No tax on dividend distribution.

Business returns need to be filed.

Limited ROC compliance.

Private limited company Business that have a high turnover. For the first 3 years, there is no taxation as under startup India.

Benefits are higher on depreciation.

Tax returns to be filed.

ROC returns to be filed.

The audit is mandatory.

Why is it important to choose the right business structure?

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The business structure we choose while applying for company registration in Coimbatore determines the type of income tax return you file. And also every time of business structure has a different level of compliances are required.

A sole proprietor only needs to file an income tax return whereas a company requires filing an income tax return, company’s annual return and also getting a compulsory statutory audit done.

Abiding by so many legal compliances requires spending more money on auditor, accountant and a tax filing expert.

Thus, the task of selecting the right kind of business structure while filing for company registration in Coimbatore helps you to be legally compliant and you will know what is coming your way in terms of legal compliances.

Some of the business structure is more investor-friendly than others. Investors always have more trust in a group of people who have a legal and a well-recognized business structure.

For example, investors generally hesitate to make money on a sole person but they are more comfortable investing in a well-recognized legal structure like LLP, company etc.

How many owners will your business have?

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It is a very important question you need to ask yourself so that you know how to register a company in Coimbatore. In case, you want to own the entire business but you may have a minimum capital investment, it’s better to go for a sole proprietor or one Person Company.

On the other side,  if you want to do a business with 2 more owners and also want them to bring in the investment, it will be better to go for HUF, Limited Liability Partnership, Partnership firm or private limited company.

How much money are you ready to spend on setting up the business?

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If you can spend only less amount initially, it would be wise to go in for the HUF, sole proprietor or partnership firm.

But, if you are very sure that you can able to recover setup and compliance costs, you can move for one person company, LLP or a private limited company.

Are you ready to bear the entire liability of a business?

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Business structures like HUF, partnership firm and sole proprietor have unlimited liability. This means in case of any default in loans, the entire money will be recovered from you and the partners or members in the ratio of profit sharing. There is a high risk to personal assets in this case.

LLP’s and the companies have a limited liability which means that your liability is restricted only to the amount of contribution made or the value of shares.

Income tax rates applicable to business:

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The income tax rate which is applicable to HUF and a sole proprietorship has normal slab rates. In case of sole proprietorship, the business income is clubbed with the individual’s other income.

In case of other forms of entities like partnership and company, a tax rate of 30% is applicable. Any business structure other than the sole proprietorship needs to file a separate tax return.

Plans of getting money from investors:

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It is tedious to get investment when your business structure is not registered. Entities like private limited company and LLP are more trusted when it comes to investment. Ensure that you are choosing a right structure. It will be better to seek the help of a professional expert so that you can register for the proper guidance.

We “Solubilis Corporate Services” help you to register a company in Coimbatore and in all the major places of India.

How to register a company in Coimbatore?

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We knew that how to register the right business structure, the next question arises is how to register a company in India. It is a simple 4 step process which we have detailed below:

  • Acquire Director Identification Number (DIN).
  • Acquire Digital Signature Certificate (DSC).
  • Filing an e-form or new user registration
  • Incorporate a company.

These are the basics of how to register a company in India. Now it is obvious that you will need help in obtaining the documentation and start your application process. You can easily log in to our website and use our company and the related services at a reasonable cost.