Krishna Rathi & Associates

Company Incorporation

    Content
  1. Company Incorporation Services in Mumbai
  2. Separate legal entity
  3. Limited liability
  4. Lower corporate tax rates
  5. Greater access to capital
  6. Continuous existence
  7. Brand Building
  8. Structure

Company Incorporation Services in Mumbai

We are a reputed firm engaged in offering Company Incorporation Services in Mumbai. We offer all the legal services that are required at the pre-incorporation stage. Span of incorporation services includes:

Company Incorporation: Benefits

Many small business owners launch their companies as sole proprietorships in which they and their businesses are essentially one and the same. However, changing the format of a small business to a corporation or a One Person Company (OPC) can offer a range of advantages for entrepreneurs. Most notable is that a corporation or OPC protects entrepreneurs personal assets in case debts or legal judgements are claimed against the business. If you decide to incorporate your business, you will have higher start-up costs than if you carry on the business as a sole proprietorship or partnership. Some of these costs are directly related to the process of setting up the corporation, while others can include professional fees paid for legal and accounting services. However, incorporating your business has far reaching benefits which are explained in subsequent paragraphs.

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Separate Legal Entity

The term corporation comes from the Latin corpus, which means body. A corporation is a body. it is a legal person in the eyes of the law. It can bring lawsuits, can buy and sell property, contract, be taxed, and even commit crimes. It’s most notable feature: a corporation protects its owners from personal liability for corporate debts and obligations

The act of incorporating creates a new legal entity called a corporation, commonly referred to as a “company.” A company has the same rights and obligations under Indian law as a natural person. Among other things, this means it can acquire assets, go into debt, enter into contracts, sue or be sued, and even be found guilty of committing a crime. A company’s money and other assets belong to the company and not to its shareholders.

When a business is incorporated, its separate legal status, property, rights and liabilities continue to exist until the corporation is dissolved, even if one or more shareholders or directors sell their shares, die or leave the corporation.

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Limited Liability

Incorporation limits the liability of a corporation’s shareholders. This means that, as a general rule, the shareholders of a corporation are not responsible for its debts. If the corporation goes bankrupt, a shareholder will not lose more than his or her investment (unless the shareholder has provided personal guarantees for the company’s debts). Creditors also cannot sue shareholders for liabilities (debts) incurred by the company, even though shareholders are owners of the company. However, that if a shareholder has another relationship with the corporation — for example, as a director — then he or she may, in certain circumstances, be liable for the debts of the company (in case of personal guarantees).

The Companies Act 2013 places a number of obligations and responsibilities on directors. For example, it says that directors can be held liable for certain acts or failures to act.

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Lower Corporate Tax Rates

Because companys are taxed separately from their owners, and the corporate tax rate is generally lower than the individual tax rate, incorporation may offer some fiscal advantages. It is strongly recommended that you ask our experts to help you assess whether incorporating might save you money.

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Greater Access To Capital

It is often easier for companies to raise money than it is for other forms of business. For example, while corporations have the option of issuing bonds or share certificates to investors, other types of businesses must rely solely on their own money and loans for capital. This can limit the ability of a business to expand.

Companies are also often able to borrow money at lower rates than those paid by other types of businesses, simply because financial institutions and others tend to see loans to companies as less risky than those given to other forms of enterprise.

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Continuous Existence

While a partnership or sole proprietorship ceases to exist upon the death of its owner(s), a company would continue to live on even if every shareholder and director were to die. This is because, in the case of a corporation, ownership of the business would simply transfer to the shareholder's heirs.

This assurance of continuous existence gives a corporation greater stability. This, in turn, allows the company to plan over a longer term, thereby helping it obtain more favourable financing.

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Brand Building

Branding consists of the name, symbol, term, sign, design or any combination of these that identify the goods and services of your company and differentiate you from another. Branding is the visual voice of your company.

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Structure

Because a company is a separate legal entity that has no physical form, its activities must be carried out by individuals who have an interest in the corporation and are entitled to act on its behalf. These individuals can be divided into three categories:

  1. Shareholders — These are the people who own the company. They make decisions by voting and passing resolutions, generally at a shareholder's meeting. Most importantly, they elect the directors of the company.

  2. Directors — They supervise the management of the company’s business. A company must have at least two director. They are also responsible for appointing the company’s officers. A director cannot be another corporation.

  3. Officers (Key Managerial Personnel) — A company’s officers hold positions such as president, chief executive officer, secretary and chief financial officer. Although company’s officers are appointed by the directors, their duties are normally set out in the articles. In general, officers are responsible for managing and executing the corporation’s day-to-day business.

An individual may hold more than one of these positions in a company. For example, the same individual may be a shareholder, a director and an officer, or even the sole shareholder, sole director and sole officer.

For detailed procedure and business query Contact Us

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Contact Us

Krishna Rathi,
Krishna Rathi & Associates,
Office No. 22, 2nd Floor, Hi Life,
Phirozshah Mehta Road,
Santacruz(West), Mumbai 400 054

Ph.: +91-22-65511099

EMAIL
associates@krassociates.in