Business registration is the first thing to do when the business model is ready to move to the pilot phase. Business registration in India can be done offline and online through the MCA portal – Ministry of Corporate Affairs portal. SME or MSME registration provides legality to the operations. In addition, it also provides a number of benefits. The following is the list of the same:
Fast Loan Approvals
also read: how to get business loan in INdia faster?
Business registration makes it easier for you to raise additional funds in terms of business loans. You also get easy backing from investors. The loan lenders in India such as NBFCs, banks, and online lenders are more trustful of legally registered companies and businesses. Hence, they process business loans applications faster and as a result, the loans are also disbursed faster.
For example, if your business is registered, you have a business registration certificate, and you are in business for more than 2 years, you can apply for a business loan with ZipLoan. One of the country’s leading NBFC, ZipLoan is registered with RBI. It offers business loans of INR 1-5 lakhs at minimal documentation and basic eligibility criteria.
Minimizing Personal Liability
A business owner is liable for all the debts and loses. And if there are any accidental product defect or service disruption, it can be financially risky. So, if you are in a partnership firm or are a sole trader, the company registration makes you less liable to the debts and losses.
However, after business registration in Delhi, Mumbai, or any other city, a company becomes a separate legal entity. This protects personal assets from a business loss.
Decreases Tax Liabilities
also read: what are the tax benefits of business loans?
After the business registration, the business becomes a separate entity. And so, it becomes a separate taxpayer as well. This allows you to apply for various subsidies and tax rebates under various governmental programs, such as Skill India and Startup India. All these programmes are running by the government for the promotion of the MSMEs.
Through SME or MSME registration, you will also be able to establish a brand image of the business among the audience, customers, and suppliers. Also, since the business contract would be between companies and not owners, it will also strengthen your position when dealing with a third party.
Business registration online or offline helps in defining the roles of different founding members and their shares in the business clearly. It brings steady leadership and also helps in resolving conflicts between top-level management that may arise in the future.