Want to start your own company but are put off by the numerous legal procedures for doing so? Here is a thorough explanation of what you must do. There are numerous Company structures from which to pick if you intend to launch a firm. The organisational structure you select will dictate the taxes you must pay, the compliance requirements you must adhere to, and the eligibility requirements you must satisfy. Therefore, choosing which forms of Company Registration India is one of the most important decisions an entrepreneur can make.
Different Types of Companies Registration
Here is a look at the many type of categories and varieties of company Registration India entities present in India, as per the Companies Act of 2013:
1. Basis of size
1. Micro Companies
2. Small companies
3. Medium companies
2. Basis of the number of members
1. One person company
2. Private companies
3. Public companies
3. Basis of control
1. Holding companies
2. Subsidiary companies
3. Associate companies
4. Basis of liability
1. Limited by Shares or by Guarantee
5. Basis of access to capital
1. Listed companies
2. Un-listed companies
The first step in starting your entrepreneurial adventure, nevertheless, should be to register your company.
As a general rule, you ought to never conduct business using your personal bank account. You never know when this can come back to bite you.
How to choose your Company Registration Name
Finding a name for your company is challenging, just like starting a business is difficult. Finding a name that is suitable for your company takes effort, and choosing one quickly in order to launch the website causes more harm than good.
Think of Google or Nike.
Guidelines for Naming a Company Registration
Some of the directions of naming a company based on the Companies Act 2013, and Companies Incorporation Rules 2014 are:
The company that deals with financial activities needs a name that has to do with money.
Few names need the approval of Central Government that holds Union, Prime Minister, Statutory, Scheme, National, Small Scale and Federal.
The words “dailyfiling Limited” may be added to the end of the company name for any firm that has been incorporated as a dailyfiling.
The name should be in resonance with the principal object of the company.
Name which includes the word Insurance, Venture Capital, Bank and Mutual Fund need to get regulatory compliance from the regulatory bodies like SEBI, IRDA and RBI.
You can change the name only after three years.”
Types of Company Registration
The primary method used by business owners to establish or incorporating their firm is company registration. Entrepreneurs must make sure they select a company type that fits their operations because there are many different forms of businesses in India. The Companies Act of 2013 in India offers seven alternative business structure options:
- Private Limited Company Registration
- Public Limited Company Registration
- Limited Liability Partnership
- One Person Company
- Sole Proprietorship
- Section 8 Company
Private Limited Company Registration India
Businesses that must register as private entities should use private limited companies. To assist safeguard their own assets, a group of shareholders in this kind of company divide the liability among one another. The sum of all the shares each shareholder owns in such business kinds represents the total capital. Additionally, the members’ personal and corporate assets are regarded as separate, enabling better protection and security. Such a company’s shares are not transferable or publicly traded.
According to the Companies Act, the following requirements must be satisfied in order to qualify for this type of business registration:
- two minimum and fifteen maximum directors
- A resident of India is required for at least one of the directors.
- two minimum and 200 maximum shareholders or members
- Moreover, an authorised capital fee of at least Rs. 1 lakh
- must have an Indian registered office address.
Public Limited Company Registration India
A public limited corporation is one whose shares are available to the general public to acquire. There is no cap on the number of shares that can be bought, sold, or traded in such company entities. The fact that the company’s shares are traded freely because they are listed on the stock exchange makes the shareholders co-owners of the business. Before starting their operations, these businesses must get a certificate of registration from the RoC.
According to the Companies Act, the following requirements must be satisfied in order to qualify for this type of company registration India:
- at least three directors
- A resident of India is required for at least one of the directors.
- with a minimum of seven shareholders and no maximum cap
- A capital fee that is authorised that is at least five lakhs
- must have an Indian registered office address
Partners who have agreed on the role and profit sharing are the ones who manage operations in partnerships. The partnership deed is a verbal agreement that specifies the roles, responsibilities, authority, and number of shares held. The Indian Partnership Act of 1932 applies to these enterprises.
If a partnership deed is legitimate and recorded, a firm can operate with or without a licence. However, because it grants them more rights and benefits, the majority of partnerships do register. Following are the requirements to form a partnership:
Limited Liability Partnership
The limited liability partnership, sometimes known as an LLP, is a brand-new business structure in India. It has a distinct legal position that aids in separating personal and corporate assets and offers the business owners limited liability protection. The amount of share capital determines each partner’s responsibility in LLPs.
One Person Company
One Person Companies, the newest addition to the list of permitted company formation forms in India, are excellent for tiny enterprises. It is the greatest choice for business owners who want to operate a company independently. Due to the OPC’s distinct legal position, business owners can benefit from liability protection without forming a partnership.
An OPC is simple to incorporate and control because there is just one person involved. It primarily functions as a hybrid of the private limited company and sole proprietorship business entity models.
A sole proprietorship is a company where the operations are managed by just one person. Since the owner and the business are seen as a single entity, their gains and losses are entirely their own responsibility. Since the owners’ names appear on the registration, the owners’ names will also appear on tax returns and accounting reports, creating an indefinite amount of legal obligation for the corporation.
Nevertheless, it is the simplest type of business to start and maintain. Owners of home businesses appreciate this because it doesn’t demand a lot of capital or regulatory compliance.
- Key advantages of the sole proprietorship
- No government registration required
- No compliances to be fulfilled
- No government regulatory paperwork
- All profits earned are yours
- You do not require double taxation
- Pay income tax returns only on your income
Section 8 Company
Section 8 companies, sometimes known as non-profit organisations, operate for philanthropic causes. The goal is to advance the humanities, sciences, literature, education, humanitarianism, and environmental protection. Additionally, all of the income they make are spent to accomplish these goals, and none of the members receive dividends.
No Companies Registration India may be regarded as a corporate entity until it has been registered with the registrar of companies, according to the Companies Act 2013. (ROC). Until it is registered, a business is not considered a separate legal entity from its owners. Therefore, creating a corporation is an essential and crucial step in achieving your goal of being a prosperous entrepreneur.