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Confused About Where To Setup The Registered Office For Your Startup?

Confused About Where To Setup The Registered Office For Your Startup?

A house is made of bricks and beams….a home is made of hopes and dreams

Pretty much sums up the mindset of a startup…isn’t it? A startup is basically all about the hopes, dreams, aspirations and expectations of an entrepreneur. It is mostly guided by well-calculated practical decisions so to say. However, often an entrepreneur finds the eternal sunshine of his beautiful mind flowering and brooding over his emotional ties with his budding startup. A very essential part of starting up a business, or more precisely, registering a Company (or LLP), is deciding on the registered office of the entity. For the sake of simplicity, we will be using “company registration” as the line of discussion. However, the discussion is equally relevant for the purpose of registering any other form of entity.

It is at this point that most entrepreneurs stumble upon. Infinite number of questions, ambiguities, doubts starts springing up and choke their mind by their constant buzzing. Some of the questions that usually rake their mind are: Can I use my residential address as the registered office of the company? Can a person residing in Kerala incorporate a company in Bangalore? Can two companies be registered at a common address? A company has a registered office in Bangalore. However, the directors wish to conduct the business from Kerala. Do they need to change their registered office? “Which city is best for registering my company” Believe me, when I say “infinite”, I mean “infinite”. The above questions are just like a drop of water from an ocean, brought to you in a glimpse.

It is also the most crucial stage of Company Registration. You fix this and half your work is done. So, what basically are the factors that should drive you while selecting the best city for the registered office of the company??

  1. Registered office has no connection with the place from where business is conducted or from where tax registrations are to be made. A company can have a registered office in one state and numerous corporate offices throughout the nation.
  2. The registered office should be chosen with a long-term perspective. This is owing to the fact that the process of shifting of registered office from one state to another is a well complicated process circling the involvement of Central Government and Regional Director.
  3. A very important driving factor would also be the local registrations (professional tax and trade license) which need to be undertaken post incorporation of the company.
  4. The prospect of revenue generation is one of the prime factors governing this decision while registering your company. The clientele base you wish to aim plays a pivotal part. For instance, your target sector is IT (online aspect ignored) and you register the company in rural outskirts…fiasco will be the word for it.
  5. Saving the rest for the last- an ideal choice for registering your company would definitely be dependent on the nature of business you wish to pursue. For a business to flourish, the co-relation among the demographic, geographic and locational advantages and its nature of business is of utmost importance.

For e.g.:

Bangalore: Bangalore is considered to be the Silicon Valley of India. With an economic growth of 10.3 per cent, the city is the second fastest growing major metropolis in the country. It can easily be termed as the paradise for IT sector companies.

Jaipur: Best suited for traditional and modern art-works. It is famous for large exports of gold, diamond, and stone jewelry. The RBI ranked Jaipur as the eleventh largest deposit centre.

Hyderabad: The city is abode to more than 1,300 IT firms, including Microsoft, Google, IBM, and Yahoo. It is ranked high in the IT and ITES sectors.

Chennai: One of the fastest growing cities in the world, Chennai is ranked among the top-notch fastest growing sectors by Forbes. It is ranked fourth in hosting the maximum number of Fortune 500 companies in India. The city is a blue eyed prince for automobile manufacturer in India and is base to about 30 per cent of the country’s automobile industry.

Hence, we see that while the subject seems of trivial importance initially, it indeed is one of the game-turners in Company Registrations. They say “Home is where the heart is”. In this case, definitely we can take the liberty to re-phrase it to speak, “Home is where the mind is”.

Note: The views and opinions expressed are solely those of the author and does not necessarily reflect the views held by Inc42, its creators or employees. Inc42 is not responsible for the accuracy of any of the information supplied by guest bloggers.

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Alok Patnia founded Taxmantra.com, an expert in tax advisory & compliance. He is a Chartered Accountant having prior exposure with Ernst & Young & KPMG.

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