A Primer on Business Incorporation for Startups and Small BusinessesCorporate legal Services

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Startups face a number of issues at the very start, and everything, be it the business structure, logo or company name is subject to legal concerns. Most startups looking to get their business incorporated face trouble while choosing the business structure of right legal form for their business. While getting a business incorporated, choosing the right legal structure is essential.

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• There are a number of options that include private limited, public limited, sole-proprietorship, limited partnership, limited liability, etc.

To decide the best form for incorporation of company, businesses should first consider the associated liability issues of the company and the tax structure of each business form. The kind of legal form you choose for the company has a bearing on your personal risk in association with the business and also your potential for financial returns.

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When in doubt, it is always best to seek corporate advisory services from corporate law firms that will not only help in deciding the right legal form but will also handle the formalities associated with incorporation.

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If a business has assets that are appreciable, it is preferable for it to be a limited liability company (LLC). This is because, in case of an LLC, the assets of the business are considered as personal assets and there is not distribution required upon termination of business. There is no tax obligation unless the assets are actually sold.

While considering options for incorporation of company, one of the essential factors one needs to consider is business asset appreciation. Whether or not the business assets will increase in value over time (appreciate) is a determining factor.

• Liability protection is another factor that companies need to consider while incorporation. Some legal forms of business offer liability protection while others don’t. If the type of incorporation you choose does not consider your business as a separate legal entity from you, then your personal assets will also be considered to be a part of the business and if your business is sued for some reason, it will put your personal assets at stake.

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In case of partnerships, your personal assets might also be at stake for the actions your partner may take. It is therefore critical to assess any liabilities one may have, and in times of confusion, expert advice in the form of corporate legal services by consulting firms comes in handy.

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Another aspect worth considering for incorporation of company is the retention of the firm’s earnings. The legal form that the company takes dictates the tax structure that the company will have to conform to. Some legal forms may enjoy certain tax benefits that others may not.

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It is more judicious to find out the tax differences between the various legal forms of firms to make the right choice with respect to the company’s earnings.

Rather than meddling with corporate legal issues, it is always better to do your homework before filing incorporation applications. Most startups fail to realize this and end up in losses arising from penalties and legal litigations.

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Even before getting your business incorporated, it is essential to question whether incorporation is actually right for your business. Another point to consider is that whatever legal form you choose to take for your business, you can always change that later as your business grows.

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For instance, most small businesses begin as sole proprietorships, in which a single individual own and manages the business and is personally liable for business-associated obligations and debts. Some others start their business as a partnership with two or more owners and managers of the business.

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Later on, as the business expands, these businesses are incorporated formally as limited liability companies, etc. in order to arrange for protection against liability risks, for securing the business entity and for taking advantage of the tax benefits associated with incorporation.

Corporate advisory services can be sought to help decide what’s course is best for the startup or small business. Incorporation in a way offers tax and legal protection to business owners and thus, its importance and sensitivity cannot be underestimated. 12

Company incorporation has innumerable advantages, some of which include protection from personal liability, ease in raising capital, tax benefits, credibility and longevity.

Because an incorporated company has its own separate status, it is a

separate legal entity from the owners. This implies that its owners are

liberated from personal liability even when the company is sued for some

reason.

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The owners are not at risk of losing their personal assets. Incorporation also gives the company its own corporate identity, adding credibility in the market. Raising capital is also much easier for an incorporated company because investors consider it to be more credible to invest in a company that is incorporated rather than one which is not.

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An incorporated company outlives its owners because it continues to run even after the owners leave. However, incorporation does have its disadvantages. The incorporation and maintenance of incorporation may come with added costs that may prove to be a burden.

In addition, filing for tax returns, maintenance of business records etc. would be an added burden. Also, the assumption that an incorporated company is immune to liabilities is not entirely accurate.

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It is thus always a good idea to understand the various nuances associated with incorporation through corporate law firms. Many firms also offer to undertake all the paperwork at cost-effective prices.

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While getting a company incorporated, business owners should make sure they get their homework done regarding every step the company will have to undertake in the process. In addition, costs and taxes associated with the process of incorporation and after the incorporation is done should also be found out. For more info visit here http://www.accuprosys.com

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If a company chooses to go for incorporation after assessing liability risks, strategies and tax obligations, it can submit application forms at the Ministry of Corporate Affairs website. The forms and documents can be submitted online.

Accuprosys is one of the best corporate legal service companies in India. The company, based in Hyderabad, has a good reputation and is going strong since its establishment.

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