There are numerous business structures from which to choose if you intend to start a business. The taxes you must pay, the compliance measures you must take, and the eligibility requirements you must meet will be determined by the organizational structure you select. As a result, choosing which types of companies that can be registered in India is one of the most important decisions an entrepreneur can make.
Types of Company Registration.
The primary way business owners set up or incorporate their company is through company registration. India has many different kinds of businesses, so entrepreneurs need to make sure they choose one that works best for them. The Companies Act of 2013 provides seven distinct business formation structures in India:
- Private limited Company
- Public limited company
- Partnership
- LLP
- One-Person
- Sole Proprietorship
- Section 8 Company
Private Limited Company
Private limited companies are appropriate for businesses that require Private limited Company Registration in Chennai as private entities. To help safeguard their personal assets, a group of shareholders in this type of company divides the liability among themselves.
For these kinds of businesses, the sum of all the shares held by each member is the total capital. Additionally, the member’s personal and business assets are treated as distinct, enhancing safety and security. The company’s shares cannot be traded or transferred publicly.
According to the Companies Act, the following requirements must be met for this type of business registration:
- Least of two and a limit of fifteen directors
- Something like one of the directors should be an Indian occupant
- Private limited company registration in Chennai requires at least two and a limit of 200 investors or individuals
- Furthermore, an approved capital expense adding up to no less than ₹1 lakh
- Should have an enrolled office address inside India.
Types of Private Companies
Types of companies that can get Private limited company registration in Chennai are:
Limited by shares: The members of these private limited companies are only responsible for the fair market value of the shares they own.
Limited by guarantee: In this scenario, the member’s liability is limited by the amount they pledge to contribute or pay in the event of the company’s bankruptcy.
Any type of Pvt Ltd company can get Private limited company registration in Chennai.
Benefits of Private limited company
Limited Liability
The owners’ limited liability is the most significant advantage of a Pvt ltd company that can private limited company registration in Chennai. As a result, shareholders’ assets are safeguarded in the event of the company’s liquidation. The owners are only responsible for the amount they invested in the business in the event of its bankruptcy. The money of any business stays with the business and does not go to the owners. Because it safeguards their assets from potential business failure, this can be a significant advantage for new businesses. Limited liability is one of the main advantages of having a private limited company registration in Chennai.
Tax Efficient
Pvt Ltd company can have Private limited company registration in Bangalore. Because they can claim corporation tax relief on their profits, private limited companies are tax efficient. Businesses can save a lot of money and make more money from this. Dividends paid out by private limited companies can also be taxed at a lower rate to shareholders. Companies also have access to a number of additional tax advantages, such as capital allowances and R&D tax credits.
Public Limited Company
Shares of a public limited company can be purchased by the general public. In such business elements, there is no restriction on the number of offers that can be sold or exchanged.
Since the company’s shares are traded freely because they are listed on a stock exchange, shareholders become part-owners of the business. Before beginning operations, these businesses must obtain a certificate of registration from the RoC.
To register as a public limited company, you must meet the following requirements, according to the Companies Act of 2013:
- There must be at least three directors, and at least one of them must be a resident of India.
- There must be at least seven shareholders, and there must be an authorized capital fee of at least 5 lakhs.
- There must be a registered office address in India.
Benefits of Public limited company
Large capital
Because there is no upper limit on the number of owners (investors) that an open-ended company can have, large capital public limited companies can raise a lot of money. Therefore, even if only a small amount of money is contributed by each investor, the company can still establish a substantial capital base.
Growth Opportunities
The company has a large capital base, so there are a lot of opportunities for growth, especially if it is an open-constrained business. In fact, if an open-constrained organization needs more capital, it can typically issue additional offers even after the business has been established.
Democratic management
Numerous investors invest in Democratic Management Public Limited Companies. The Board of Directors is in charge of the organization. Additionally, investors choose the Board of Directors.
Partnership Firm
In associations, the treatment of activities is by accomplices who play a settled part and offer benefits. A verbal contract known as the partnership deed clearly specifies the functions, responsibilities, powers, and number of shares held. The Indian Partnership Act of 1932 applies to these businesses.
As long as they have Partnership firm registration in Bangalore and a valid partnership deed, partnership companies can operate without a license. The majority of partnerships, on the other hand, do register because it gives them more rights and benefits. The following are the requirements for joining a partnership:
Partnership firm registration in Bangalore needs no more than two partners and no more than ten. There must be a registered office address in India. A partnership deed must be signed by all partners.
Benefits of Partnership firm
A partnership firm that has Partnership firm registration in Bangalore has the following benefits.
Easy to form
One of the easiest to start is a partnership company. It can have Partnership firm registration in Bangalore. A partnership deed is typically all that is needed to start a partnership business. As a result, a partnership can be formed simultaneously.
On the other hand, the digital signatures, DIN, Name Approval, and Incorporation that are required for an LLP registration must be obtained from the MCA within five to ten working days.
Making Decisions
Making decisions is the heart of every organization. Dynamic in an organization firm could be quicker as there is no understanding of the death of goals. In most cases, the partners in a partnership firm that can get Partnership firm registration in Bangalore have full authority to carry out any transaction on behalf of the partnership firm without the consent of the other partners.
Fundraising:
Unlike a sole proprietorship, a partnership can easily raise money. Contributions can be made more easily by multiple partners. In addition, banks are more likely to approve credit facilities for a partnership which has Partnership firm registration in Chennai than for a sole proprietorship.
LLP
The limited liability partnership, more commonly known as an LLP, is a new type of business in India. It has its own distinct legal status, enables entrepreneurs to distinguish between their personal and business assets, and provides them with limited liability protection. The number of shares in an LLP which can get LLP registration in Chennai determines each partner’s liability.
The following requirements must be met in order to establish an LLP:
- A minimum of 1 lakh in authorized capital;
- at least one of the designated partners must be a resident of India;
- LLP registration in Chennai needs a maximum of two partners;
- at least one individual partner, if the other partners are corporations;
- No need for shared capital because each partner must make an agreed-upon contribution.
Benefits of LLP
Separate legal entity:
An LLP that has LLP registration in Chennai is a separate legal entity from its partners, just like private limited companies. The agreement is endorsed for the sake of the LLP, and that implies an expansion in trust for partners
Limited liability:
As the name suggests, LLP stands for limited liability partnership, which means that the partners are only responsible for the contributions they make. This means that they are only responsible for their contributions and are not personally liable for any business losses. It can have LLP registration in Chennai.
Less expensive and easier to comply with:
The cost of forming an LLP and having LLP registration in Chennai is lower than that of forming a company. Annual returns and a statement of accounts and solvency are required of LLPs.
No minimum capital contribution is required:
LLPs that can have LLP registration in Bangalore can be established with or without a minimum amount of capital, or with any capital contributed by partners.
One-Person Company
The One-Person Company is the newest of the various types of company registrations that are permitted in India. It is ideal for small businesses like agriculture businesses. It is the best option for business owners who want to run their own companies.
The OPC that can have OPC registration in Chennai has its own legal standing; without needing to collaborate with anyone else, entrepreneurs can take advantage of liability protection.
An OPC that has OPC registration in Chennai is simple to incorporate and regulate because it only involves one individual. It basically combines the private limited company and sole proprietorship business entity models. The following requirements must be met in order to have OPC registration in Chennai:
The promoter must appoint a nominee during the incorporation. Financial businesses cannot incorporate as an OPC. Minimum authorised capital of at least 1 lakh. The individual must be a natural Indian citizen and resident.
Legal Status
A One-Person Company which has OPC registration in Chennai has legal status. The company gains the trust of suppliers and customers and establishes a name in the market thanks to its legal identity. Each huge endeavour likes to manage the lawful business structure instead of the ownership firms. In addition, a corporate structure aids the business in attracting and retaining skilled and experienced employees.
Limited Liability of Directors and Shareholders
One of the main advantages of incorporating as a One-Person Company and having OPC registration in Chennai is that directors and shareholders are exempt from liability. The shareholders and OPC members are only responsible for the value of their shares. The business is made up of both profits and losses. As a result, the business may occasionally also suffer significant losses.
A business owner’s personal assets must be safeguarded in such circumstances. If a person runs a business as a sole proprietor, he will be personally responsible for the company’s debts. On the other hand, OPC that can get OPC registration in Chennai gives the cut-off points on the obligation of the individual this implies any misfortune or obligation which is unadulterated of a business nature won’t influence, individual investment funds or the abundance of a business person.
Easy to operate
A one-person company that can get OPC registration in Bangalore are generally simpler to run than other business structures. As a result, OPC’s compliance requirements are significantly lower than those of other organizations. We have listed some of the compliance requirements that every OPC must meet. No annual general meeting or
Extra Ordinary General Meeting is required because there is only one member in the OPC. An AGM or EGM is not required. The resolution alone must be communicated by the company member, entered in the minute book, signed, and dated by the member, and that date will be considered the meeting date.
Conducting Board Meetings:
In contrast to many other types of businesses, the One Person Company which can get OPC registration in Bangalore can only hold one Board of Directors meeting per half of a calendar year. There must be a minimum of ninety days between the two meetings.
Sole Proprietorship
A sole proprietorship is a type of business in which one person is in charge of running the company. Since the owner and the business are regarded as a single entity, they are solely accountable for profits and losses.
The owners’ names will appear on the registration, as well as on tax returns and accounting reports, resulting in unlimited business liability.
Nevertheless, it is the easiest type of business to establish and run. This is preferred by small and home-based business owners with a Supermarket Business Plan due to its low investment and compliance requirements.
Benefits of Sole proprietorship
Legal Formalities:
A sole proprietorship does not require any formalities to start or end. However, in order to run the company for certain occupations, the owner must possess a specific certificate or license. A pharmacist’s degree, for instance, is required for a sole proprietor intending to open a pharmacy.
Unlimited Liability:
The sole proprietor is accountable for the financial transactions’ success or failure. If the owner takes out a loan and doesn’t pay it back, the creditors can take the owner’s property to get their money back.
Section 8 Company
Section 8 companies that had section 8 company registration in Bangalore, also known as “non-profit organizations,” work for charitable causes. The goal is to support the arts, science, literature, education, helping the less fortunate, and the environment.
Furthermore, the members do not take dividends for themselves, and they use all of their profits to accomplish these goals.
The following requirements must be met before you can have Section 8 company registration in Bangalore:
There must be at least two shareholders, as well as at least two directors, who can also be shareholders. One of the Directors must have Indian citizenship. There is no minimum capital requirement. The office address must be in India and it should have Section 8 company registration in Bangalore.
Conclusion
Benefits of a Company’s Incorporation Smartauditor make it simple to register any of these types. Also, our professionals will take care of everything and answer all of your questions.