Company registration is a primary process by which business owners establish or incorporate their company. Since there are several kinds of companies in India, entrepreneurs must ensure they choose a business type that suits their operations. In India, the Companies Act, 2013 lays down guidelines for various types of company registration.
Types of Company Registration in India are:
An individual can be founded as a sole trader, as a Partnership, Private Limited or indebtedness Partnership, etc. Each format has its advantages and drawbacks. There are multiple styles of company registration mentioned below:-
- Private Ltd. (Most Common)
- Limited Liability Partnership
- One person Company
- Public Ld.
- Nidhi Company
- NBFC Company
- Finance Company
All these above-mentioned companies are different from one another. they need different kinds of formations, rules, and regulations. So, it’s very crucial to know every detail like their documents, forms, etc. specializing in the procedure of Online Company Registration, other companies’ processes may also be understood as all of them have an identical process.
But the foremost widely use and in common is Private Ltd. Registration Online. Whenever the new company registration process proceeds, it’s highly recommended to the applicant to settle on “Private Limited Company”. the explanation being, it’s more tax benefits than others.
Steps of Company Registration process in India
Private Ld. Private Limited Companies are suitable for tiny businesses that need registration as non-public entities. during this sort of company, a bunch of shareholders distributes the liability amongst themselves to assist protect their personal assets. the whole capital of such business types is the total of all the shares held by each member of the corporate. Also, the private and business assets of the members are considered separate, with better protection and security. The shares of such an organization can’t be publicly traded or transferred. As per the businesses Act, 2013 to be eligible for this kind of business registration, the private Ld. must meet the subsequent criteria;
1. Minimum of two and maximum of fifteen directors
2. At least one among the administrators must be an Indian resident
3. Minimum of two and maximum of 200 members
4. Additionally, an authorized capital fee amounting to a minimum of INR 1 Lakh
5. Must have a registered office address within India
Types of Private Companies
1. Limited By Shares: In such private limited companies, the liability of the members is set by the memorandum to amount unpaid on shares allotted to them.
2. Limited By Guarantee: during this case, the liability of members is proscribed by the memorandum of the number of members who will contribute or guarantees to pay if the corporate goes bankrupt.
3. Unlimited: Moreover, such varieties of business entities don’t have any limit on the liability of their members. As a result, if the corporate assets fail to pay off creditors, members will need to use their private assets to clear debts, increasing the chance factor involved.
A Public Ld. is one whose shares could also be purchased by members of the overall public. In such business entities, there’s no limit on the number of shares that may be sold or traded. Since the shares of the corporate are listed on the stock market, they will be traded freely, making the shareholders part-owners of the corporate. Such companies must obtain a Certificate of Registration from the RoC before commencing business operations. Further, as per the businesses Act, 2013 to be eligible for this kind of business registration, the general public Ltd. must meet the subsequent criteria;
1. Minimum of three directors
2. At least one of each of the administrators must be an Indian resident
3. Minimum of seven shareholders with no cap on the most limit
4. Moreover, an authorized capital fee amounting to a minimum of INR 5 Lakhs
Hence, the functions, duties, powers, and number of shares held are all clearly defined in an exceedingly verbal contract referred to as the Partnership Deed. Additionally, these businesses make up the purview of the Indian Partnership Act, of 1932. Partnership firms can function with or without a license as long as they need a legitimate and registered Partnership Deed. However, most partnerships do register themselves as that offers them additional rights. Moreover, to be eligible for this kind of firm registration, the partnership must meet the subsequent criteria;
1. must have a signed registered Partnership Deed by all partners
Limited Liability Partnership
Popularly called an LLP, indebtedness Partnerships also are a brand new kind of company in India. Moreover, it enjoys a separate position, helping distinguish between personal and business assets, and granting the entrepreneur’s liability protection. In such firm types, the liability of every partner depends on the amount of share capital, helping provide more protection than a Sole Proprietorship. Moreover, to be eligible for this kind of business registration, the LLP must meet the subsequent criteria;
1. Minimum authorized capital amounting to INR 1 Lakh
2. At least one amongst the Designated Partners must be an Indian resident
3. Minimum of two partners and no cap on the utmost number
4. At least one individual partner, if the remainder is corporate bodies
One person company
The newest entry into the various varieties of company registration allowed in India, OPCs are great for little businesses. Additionally, it became an element of the businesses Act 2013, to assist entrepreneurs who wish to run a business single-handedly. Since such a firm type has separate status, entrepreneurs get the good thing about liability protection without having to partner with anyone else. Furthermore, since they involve just one individual, this sort of firm registration is straightforward to include and regulate. Moreover, this essentially is a mixture of the Sole-Proprietorship and Company model of business entities. Additionally, to be eligible for this sort of firm registration, the One Person Company must meet the subsequent criteria;
1. Minimum authorized capital amounting to a minimum of INR 1 Lakh.
2. Further, a private must be a natural Indian Citizen and resident
3. Additionally, Financial businesses cannot incorporate as an OPC.
4. Further, should convert to a personal company if paid-up capital exceeds INR 50 lakhs or turnover exceeds INR 2 crores.
This is another kind of business entity wherein one individual handles the running of the business. However, during this firm type, the corporate and also the owner is considered as one entity, making them solely chargeable for profits and losses. Moreover, since the registration bears the name of the owners, tax filings and accounting reports also will bear the name of the owner, resulting in unlimited business liability. As a result, this sort of company doesn’t have a separate business registration process.
Section 8 Company
Commonly called a Non-Profit Organisation, they are mainly working for charitable purposes. Moreover, it involves promoting arts, science, literature, education, and protecting the environment. Also, all the profits generated by such forms of companies are accustomed achieve these objectives, and therefore the members don’t take dividends for themselves. To be eligible for this kind of firm registration, the Section-8 Company must meet the subsequent criteria;
1. Minimum of two shareholders
2. Minimum of two Directors and that they may be shareholders further
3. At least one amongst the administrators must be an Indian resident
4. No minimum capital requirement must have a registered office address in India
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