Documentation & Discipline are key to business success say experts at PHDCCI Video Conference

No.PR-296 October 22, 2020 New Delhi Documentation & Discipline are key to business success say experts at PHDCCI Video Conference ‘Documentation and discipline are key to business success’ said speakers while addressing Session on Types of Legal Entities and Benefits during Video Conference on Startup Bootcamp organized by PHD Chamber of Commerce and Industry (PHDCCI) here today. Welcoming the participants, Mr. A.P. Sharma General Manager, Central Tool Room(CTR), Ludhiana highlighted the facilities and services provided by their Centre to MSMEs in Punjab. He informed that CTR, Ludhiana provides assistance in tooling, product development and validation with latest technology of 3D printing. Short and long term training courses are also offered by the CTR, Ludhiana to skill entrepreneurs and manpower for MSMEs in the State. Mr. Sharma informed that during the Covid-19 lockdown, their centre helped in manufacturing of face shields, masks and other covid-19 related products. A detailed Presentation was made by Mr. Jagdeep Saini, Manager Training, CTR, Ludhiana and Mr. Mrinankush Datta, Incubation Incharge, CTR, Ludhiana about the facilities available at CTR, Ludhiana including Metallurgical support and material testing services, Product Designing & Manufacturing, Human Resource development etc. CA Gaurav Singhal, Co-Chair, Taxation Committee, Punjab State Chapter, PHD Chamber &Partner, Heads Up Consulting Pvt. Ltd. made a presentation to explain various types of Legal Entities and the importance of business formats. He said that business format that Startups adopt is important as it impacts the startup ecosystem, the entrepreneurial spirit and the fund raising capacity of the startup. He stated that like other business entities, a Startup can be Proprietorship, Partnership or a company. He informed that Proprietorship firms require least regulatory compliances and companies the maximum. He said that although requirement of more regulatory compliances is frustrating but in the long run, they are beneficial as they enforce documentation and discipline which ensures longevity of any entity. He said Sole Proprietorships are preferred due to simplicity but they involve high risk. He explained that Partnership firms also carry high personal risk whereas in LLPs the risk is slightly less. He said a Partnership firm is created on basis of a Partnership Deed. It is important to have a well documented Partnership Deed to avoid any misunderstanding among the partners at a later stage. He stated that in a Private Limited Company and Public Limited Company, a separate legal entity is created and does not involve personal risk of the Directors. A Private Limited Company can be formed even by a single person that enjoys all benefits but certain compliances are waived off. However, it is better to have like-minded persons in the company to garner more support and skills. He informed that public money can be raised only by a Public Limited Company. Mr. Singhal underlined that investors prefer to invest in Companies as against proprietorship and partnership firms because they require lot of legal compliances and best business practices automatically get incorporated in them. He informed that LLPs are preferred for corporate and professional services but for Government contracts, the company format is required. He also explained the Tax benefits available to startups and eligibility for registration to avail these benefits. Thanking the speakers and participants, Mr. A.P. Sharma General Manager, Central Tool Room (CTR), Ludhiana said that very useful information was shared during the Session which will greatly help the participants. Ends Media Division PHD Chamber of Commerce and Industry