Company Registration

Significance and Advantages of Company Registration for SMBs

calendar29 Nov, 2020
timeReading Time: 4 Minutes
Company registration for SMBs

The company registration is mandatory if one intends to expand its business globally. It is done for branding and making a name in the market. So whether you are small or a big businessman it is required to have company registration. The small or a medium-sized business also required to deal with the several large entities. Company registration for SMB helps to do business without any tension. As a registered company, it becomes easy to do business as a private limited company or an LLP rather than a sole proprietor business.

For an SMB also workers or business partners are needed who like to work with the registered company. They would rather trust the registered business company over the sole proprietor. Once SMB gets register, the company and its business become more transparent. Though the process of registration is almost the same and a company registration for SMB comes with some more benefits.

Significance of the Company Registration for SMBs

Company registration for SMBs helps in branding and creating the marketplace and market value. It does not matter whether a business is small or big. To avail, all the benefits available for any business one has to register its business.

Small or medium-sized businesses (SMB) mostly deal with the large entities. If the business is not registered, large entities will hesitate to get involved in the business with you. The registered entities are more likely to attract the investors to compare unregistered entities. It becomes easy and tension free to work with the registered entity, as the liabilities are also reduced. If one is working as the Private Limited Company, any liability that arises in the course of business is the liability of a company or the LLP. There is no personal liability involved; therefore, it protects your personal assets.

Having company registration for SMB has many benefits, as a growing business, one requires people to work with and investors to invest in the business, to make the registration easy. In case one wants to obtain for a loan facility from any bank, it becomes easy to get a loan approved by the bank for a registered entity. But in case the business is not registered, the bank will not grant loans to it.

Company registration for SMBs makes them eligible to avail incentives announced by the Government. It helps in making the product and services by your entity more authentic and trustworthy.

Advantages of the Company Registration for SMBs

Company registration for SMBs will be helpful in many ways. The advantages of company registration for SMB are mentioned below:

Advantages of the Company Registration for SMBs

It helps in Growth of the business

Registering a business will help it to grow. It gives an opportunity to expand the business globally. If you require a loan from banks, a bank will see your earnings, your turnover, and the taxes paid, etc. If your business is registered and is complying with all provisions, it becomes easy to get the approved loan by the bank. The registered SMBs can be the stepping stone to grow business. A company registration for SMB hence is the first step to increase the business.

It Removes the Shipment Barriers

One can not export goods from overseas in case the business entity is not registered. There can be a problem at the inter-state borders as well if an entity is not registered. Registering the small and medium-sized business removes the shipment barriers for the business. Company Registration for SMB is much recommended for exporting the goods from overseas.

It makes the transaction of cash Easy and Convenient

In case you are running a business online, you require having a Payment Gateway for the smooth transaction of the cash. But if SMB is not registered, then no service provider of a Payment Gateway will entertain your SMB. For running the online store, it is important to tie up with a payment gateway. Major payment gateways which can transfer cash smoothly and quickly will not entertain your SMB if that is not registered.

It limits the risk attached to the business and protects personal assets

Registering an SMB as the Private Limited Company or as the Limited Liability Partnership also reduces risks attached to a business. It protects from personal liability, which arises in the course of business. The Shareholders and directors need not meet the liabilities of their personal assets. In case you face a loss in the unregistered business, then a supplier can ask for your personal belongings if your SMB does not have money. But, as the registered company, the provider can only take his dues from the business and not from the personal assets.

It attracts the People’s Trust

Registered SMBs are more likely to gain trust. If any person wants to work with the SMB, he will prefer the registered SMB over an unregistered one.

Process of Company Registration for SMB

For registering an SMB, the first one has to decide the structure of the business. Once a structure of the business is decided, you can proceed with the formalities of registering an SMB.

  • If SMB has to be registered as a company then it is required to decide a type of company, i.e. i) Private Limited Company ii) Public Limited Company iii) OPC, etc., then one can proceed with the company registration process through SPICe+.
  • If SMB has to be registered as an LLP, one need to go through the LLP incorporation process and complete the registration under LLP Act[1], 2008.


Registering an SMB is very crucial. It provides various benefits to SMBs. The Government provides various incentives for business companies such as tax reduction. The company can avail the offers only if it is registered. The registered SMB is eligible for the benefits announced by the Government from time to time.

Getting your SMB registered will give your products and services an absolute authenticity. Company Registration of SMBs opens opportunities for the global market. It removes shipment barriers. It helps in getting loans easily.

Read our article: Analysis on the Fast Track Company Registration under SPICe+ in India

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