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Question
Is it necessary to register Internet company & why ?
I'm gonna launch a startup soon. Been procrastinating from 6 months but will finally launch. So is it necessary to register as a Company because it will make me money online via PayPal, etc.. & why to do so ?
PS - I live in India
PS - I live in India
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Depends on where you're based. Best to talk to your local tax authority.
That said, I think generally it's better to just launch and get that initial revenue going. If you're just starting out with very limited revenue I think practically speaking nobody cares. It is a risk though.
If it helps, I live in India. And what is limited revenue (any number in $)? Is WIP registered?
I don't know the laws in India. Best to check with local tax authority and/or local entrepreneurs.
Yes, I have one corporation that holds all my ventures including WIP.
How many people are working on your startup?
Me alone
You can show your income as an individual or self on initial level and if your startup grows then you can think about the register. If you still want to register, check out 'startup India' scheme. see if you can get any benefits from it.
Thanks this helps. What is the income (in numbers $ or ₹ per month) at which I can register if you have done this already? Also, if I don't register, what's the harm?
I stay in South Africa so maybe not relevant. From my experience, best to register at the very beginning and take time to setup systems that (a) separate out personal and business expenses and (b) be tax compliant. I started without registering and got myself into several issues related to taxes, and this has proved expensive. The irony is that had I started out with a registered company I would have had a much smaller tax liability. The other advantage is that you are forced to record finances, which means you have to have basic financial systems in place. But, what is VERY important, is to do the registration as quickly as possible, and cheaply.
By having a corporation, let's say, in the US, you can protect yourself from stupid stuff like blocked accounts, etc. Additionally, it's easier to sign contracts with enterprise clients. It's actually not that difficult:
osome.com/
clerky.com
stripe.com/atlas
handbook.clerky.com
I just checked Stripe Atlas. It says it costs $500. Am I right ?
$500 just to register a startup. What if the startup doesn't work?
Also what do you mean by blocked accounts? I don't want my bank account block if I'm doing some internet business.
I won't have any enterprise clients but can you explain what is the harm if I don't register ? Can you explain in a bit more detail ?
Also, am I fine till it doesn't cross a particular threshold (in $), like some value (ex. if it makes $5000/month I'm not gonna suffer any consequences) ? Sorry but I'm completely noob at this 😂
You can create an entity once and then launch different projects. My observation shows that companies outside of the US or EU have more difficulties with sales because there is a lack of trust. I would recommend talking to the lawyer. Good luck :)
For India, You don't need to form a company. Sole proprietorship is the way to begin atleast but know that all the liabilities lie on you plus a lot less tax. But do check with an accountant on GST (Taxation) stuff.
Thanks for your answer, @Ashfame. I was also thinking about starting an online business and I will go with proprietorship. Btw, do we need to register proprietorship with the government or we can start right away?
This article gives the impression that we need to register it.
cc @deadcoder0904