Difference Between Registered and Unregistered Businesses in India

Are you thinking about investing in a business? If so, then what should you opt for – should you go for a registered company or start an unregistered one? While the decision does seem quite simple on paper, it actually is not easy at all. Each of these options is quite viable in the market and has its own distinctive benefits.

registered vs unregistered businesses

So, how are you going to choose one between them, especially if you do not have any idea about this field? Well, the answer to this question is pretty simple. All you need to do is to differentiate between them and you are good to go! To offer you a helping hand in this aspect, we have done all the research work for you and provided some insights about them down below.

Hence, before you do go through the hassles of company registration online, make sure to check them out. It will surely help you in making your investment-related decision.

1. Validation

So, the first point, on which the discussion will be made, is the validation of an organization. If you have completed the whole company registration procedure onlineand registered your corporation, then it will be valid in all over the country. You do not have to go through the issues of proving its goodwill or existence in the world of business.   

Nevertheless, such advantages do not get applied in the case of an unregistered company. In this aspect, you will have to work hard in the field and prove your subsistence in the market. Additionally, you will also have to operate in a specific region or city, as you are still yet to become a well-known name. Hence, it might be a little bit more problematic for you to grow your business.

2. Use of Sign

If you have registered a company and trademark, you can use such specific sign on your brand. This, in turn, boosts the authenticity and legitimacy of your services and products. Moreover, it indirectly, increases the trust of your potential clients and consumers.

However, if you haven’t registered your company or trademark, then you cannot use any symbols productively. Hence, with one look at your products, the consumers will be able to understand that you are either unregistered or aren’t under any legal protection. It may affect their course of trust or dependability.

3. Protection

Unlike the other pointers, both the unregistered and registered company enjoys protection under the law. However, the security advantages of each of them are pretty different from one another. For example, a registered company gets protection for its name and trademark under the Companies Act, 2013 and Trademark Act 1999, respectively. Moreover, additional protection is provided to registered companies under many other acts. Therefore, if you do use a specific brand name and launch products under it, no one else can employ the same name again. If they do, then you can always sue them.

Naturally, if you have not registered your entity, then you will not be able to enjoy such advantages. Therefore, any other company can use your brand name and launch their products under it. Now, your customers will get confused by it and start buying their offerings instead of yours. In such case you will have very few legal remedies available with you.

4. Suing Others

As mentioned before, if you have finished the company registration online and are a registered organization, then you can sue others for your rights, especially if they are using your trademark. Now, what do we really mean by the term ‘trademark’? Well, it can be any ‘mark’ that you have used in your organization for differentiating your goods and services from others, such as a product’s name or the forename of your brand. If any other company is using these, then you can always take legal action against them.

However, things are not going to be so easy for the unregistered ones. In this case, you will have to successfully prove that the the trademark belongs to you, and unauthorized usage of your brand name by others has caused a damage to your business. For that, you will need to do a lot of researches, paper works, and hire a lawyer as well. Nevertheless, even if you have done everything, there are not much legal remedies available for an unregistered trademark. Moreover, if you are unable to prove anything, then your chance of saving the infringement of your rights is over.

Conclusion

Due to these reasons, most organizations, these days, are registering themselves before starting their venture in the universe of business. The whole company registration procedure is fairly easy and affordable. So, you don’t have to worry about anything.

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