Company Law Services for Startups in India!
Posted: Feb 09, 2020
The Company Law Services in India is mandatory under the company registration act, 1956. Complying with the rules and regulations for the company registration, the company can avail numerous benefits and facilities. It provides a separate entity for the company, apart from its shareholders and directors. The company is safe from insolvency and the shares of the company can be easily transferred from one person to another. A detail description of the process of company registration is mention in the article.
The company law service in India has numerous distinct features that make it a distinct authority and a functional organization. The features are mentioned below:
Separate Legal Entity:
Once the company incorporation is done under the MCA, it gets the privilege of a separate legal entity different from that of its owners. It is provided a separate name and seal, with exclusive liabilities and assets, apart from its members. The company gets the authority to owning property, incurring debt, borrowing money, having a bank account, employing people, entering into contracts and suing and being sued separately.
The liability of the members of the company is based on the contributions made by them for the company assets only up to the face value of shares held by the member. The members are liable for the payment of only the money due for their shares, in spite of the scenario of the company liabilities exceeding its assets.
This is a crucial factor for company formation, which ensures that the company does not cease to exist in any adverse scenario. The members of the company may change, but it will not affect the company in any way. Even the case of death or insolvency would not impact the company's existence.
With the company registration process, it gets a distinct legal entity with separate property for itself. The members have no authority to claim that property in any circumstance.
Transferability of Shares:
The company shares are easily transferrable. This is because no shareholder is a permanent member of the company, hence when share transfer is done then the transferee gets all the rights of the previous shareholder. Then, he becomes the new shareholder of the company.
Capacity to sue and be sued:
The company law services for startups allow the company to sue any other company or person, as an individual identity. Also, the company can be sued for any action by another company or person.
The company management is handled by a board of directors. This states that the shareholders just possess the shares, they are not empowered to manage the company.
One Share-One Vote:
The voting system for the company is one share one vote. It means that the number of shares in the company determines the number of votes that the shareholder has in the company. This is different from the voting principle in co-operative societies where irrespective of the shares, one shareholder has only one vote.
Following the abovementioned advantages, company registration is not only important but also highly beneficial for company expansion and growth.
Kavita is working as a consultant at a legal services in India. She is also an experienced and passionate writer who has been written many Blog and websites' content about Company registration and Trademark registration in India.