Latest Startup Statistics for Indian Entrepreneurs
- The Indian government has recognized 41 061 startups in recent studies
- Startups are responsible for creating over 470 000 jobs in India
- Around 319 startups were granted income tax exemptions until November 2020, according to reports
India's startup business ecosystem has grown at an incredible rate. This growth is also seen in the US startup sphere. When analyzing what business model startups prefer, two models stood out. Startups prefer to start a new LLC or forming a corporation.
The common view is that venture-capital-seeking companies should form as C-Corporations rather than LLCs. Surprisingly, an LLC is a very adaptable entity that may be used to create structures that are similar to those of a C-Corp. An LLC can create membership interests that are similar to corporate stock, such as distinct classes of ownership with customizable rights, and it can even choose to be taxed like a C-Corp. Because fewer formalities are required, an LLC is often easier to set up and operate.
Why startup owners choose an LLC
A limited liability company (LLC) is a type of business structure that provides limited liability protection as well as tax pass-through. The LLC, like corporations, is a legal entity independent from its owners. As a result, owners are rarely held personally liable for the company's debts and liabilities.
The paperwork is the primary reason why entrepreneurs choose an LLC from a standard corporation. Bylaws, minutes from various meetings, and stock ledgers are just a few of the documents that corporations must store. LLCs have considerably less paperwork, with the filing of an annual report being the most important.
Choosing to start a corporation
A corporation is a legal entity with limited liability, centralized management, an indefinite lifespan, and the capacity to easily transfer ownership interests. A corporation's owners are referred to as "shareholders." The people in charge of a corporation's business and affairs are known as "directors." State corporate law, on the other hand, allows shareholders to enter into shareholder agreements to remove directors and replace them with shareholders.
Whether an entrepreneur chooses an LLC or a corporation for their startup model, certain key aspects should be kept in mind:
Your startup should fill a gap in the market
A startup concept should be something that everyone requires—or, at the very least, something that you can persuade others to require. Your business should provide a unique answer to a widespread problem, or one that people may not even be aware they have. Apart from filling the needs of the market, ensure that the product or service will be something that is needed in the long run.
Make use of expert opinions
During the early phases of their startup, many entrepreneurs look for partners or co-founders to assist them to balance the tasks of running a business. If you decide to have a partner, do your research and make sure that the person you chose has abilities and strengths that complement your own. Industry professionals, like registered agents, are also there to assist with decision-making and certain tasks.
Investors and SME loans
To keep the lights on, any rising business requires funds. Whether it's through crowdfunding, angel investors, or venture capital firms, you'll need to secure at least one source of income. Increased capital will ensure that you have the resources you need to keep your business afloat.
The impact of the digital network
Every major business in the twenty-first century has a website and a social media strategy. Purchase a dedicated domain name that is easy to remember for your consumers. Create a website where visitors can learn about your firm and what makes it special. Use social media to spread the word about your concept and get people interested in what you're working on. Social media is one of the most powerful marketing tools in today's age.
A startup is a company that is designed to grow quickly and profitably. If you have a brilliant company concept and want to attract investors for it, the above-mentioned aspects are a few basic actions that should be kept in mind. An LLC differs from a corporation in that it is owned by one or more individuals, whereas a corporation is held by its stockholders. Regardless of whatever organization you choose, both provide significant benefits to your company.