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The term “company” refers to any legal entity created and regulated as per the Companies Act of 2013. The main factor to consider when establishing a company is to confirm that all legal requirements are met in order for your company to function smoothly. Furthermore, the procedure of Companies Registration is dependent on the type of business you are getting registered for, and several forms of Companies Registration can be chosen as per the Companies Act, 2013, depending on the activity and requirements of the promoters.
Everything from the taxes you would pay, the compliance procedures you will take, and the eligibility requirements you must satisfy will all be determined by the organizational structure you adopt. As a result, selecting what sort of Companies Registration to undertake in India is one of the most crucial decisions an entrepreneur should consider. Furthermore, the Indian legal system permits the formation of numerous sorts of corporations under various forms of Companies Registration. We’ll look at the various kinds of corporate entities and kinds of company Registration in this article.
Table of Contents
Following is a list of the many classes and types of business entities present in India, as defined by the Companies Act, 2013.
Because India has so many different sorts of businesses, entrepreneurs must select one that best suits their operations. The Companies Act, 2013, in India, establishes standards for several forms of business formation. Therefore, here’s a brief review of India’s business types.
Detailed registration process under Companies Act 2013
A private limited company (PLC) is a privately held corporation for small enterprises. The legal obligations of members of a Pvt. Ltd. Company are limited to the No. of shares that they own. The stocks of a Private Limited Company cannot be exchanged publicly.
There are 3 kinds of private limited companies:-
The following documents are required for Private Limited Companies Registration:-
A Public Limited Company is one in which members of the general public can buy shares. A Public Limited Company (PLC) is a voluntary membership organisation formed under company law. Because the shares of the company are listed on the Stock Exchange, they are freely traded, making the shareholders part-owners. Before beginning commercial activities, such firms must obtain a Certificate of Registration from the ROC. It has its own legal existence, and its members’ legal liability is confined to the shares they own.
While a public limited companies registration, keep in mind the following:
A partnership company resembles a sole proprietorship in many ways. The fundamental distinction amongst a partnership and a sole proprietorship is that a partnership involves more than one person. The functions, responsibilities, and share of each partner are all clearly stated in a legal partnership agreement. As a result, profits made by the firm are distributed among partners in accordance with the formal partnership agreement, and if losses occur, each partner is individually liable. As long as a partnership firm have a legal and registered Partnership Deed, they can operate with or without a licence. Furthermore, the Indian Partnership Act of 1932 governs these firms.
To register a Partnership firm, the following documents are required:
The Statement must be signed by all of the company’s partners and must be confirmed by affidavit in the method indicated. Registered and unregistered Partnership Corporations are the two types of Partnership Corporations. Registration of a Partnership firm is not compulsory; nevertheless, given the benefits, it is sensible to do so. The formation of a partnership firm is accomplished by the Partners drafting a Partnership deed.
Limited Liability Partnerships, or LLPs, are a relatively new kind of business concept in India. The LLP is a different legal entity from the partnership entity, with business assets separate from that of the partners’ personal assets and limited liability protection for the entrepreneurs. In this type of business, personal assets are not jeopardised. In the event that the business suffers losses, each partner’s maximum legal liability is determined by his share capital in the entity.
The documentations proving possession of the registered office is necessary when filing for the creation of an LLP. The registered office paperwork, along with the signed subscriber’s sheet, must be filed with the MCA for registration of an LLP in India after they have been prepared.
The Registrar will issue the incorporation certificate if the application for LLP Registration is approved. The LLP will be considered for registration after the incorporation certificate is issued, and an application for a PAN for the LLP can be filed. The LLP Partners then have 30 days to file the Partnership Agreement with the MCA. A penalty will be imposed if the LLP Partnership Agreement is not filed within 30 days.
Partners must submit the following documents for the LLP companies registration:-
OPCs are the newest addition to the many forms of Companies Registration available in India, and they are ideal for small enterprises. The Companies Act of 2013 established the one-person company. The main goal was to assist entrepreneurs who were capable of opening a firm. This is also accomplished by enabling them to form a single economic entity. One of the most significant benefits of a One Person Company is that just one member is permitted. On the contrary, incorporating and sustaining a Private Limited Company or a LLP requires a minimum of 2 members.
In this type of company, a single person is in charge of the whole organisation. The only one who will get benefits from the profits and endure the loss is that person. The sole proprietorship is not governed by any specific statute. The commercial responsibility of the owners of such corporations is unlimited. That means that the owners’ personal assets might be seized in order to pay for corporate liability claims. Transferring the ownership of a sole proprietorship from one person to another is not feasible.
A Shop and Establishment registration can also be obtained.
The below mentioned documents are necessary for the sole proprietorship companies registration:-
Any two of the credentials, along with the proprietor’s identity and address proof, might be used to create a bank account.
A company that is incorporated as a Non-Profit Organization (NPO) is known as a Section 8 business. The primary goal includes the promotion of the arts, business, charity, education, environmental preservation, etc. As a result, any earnings or other revenue generated is used to further the objectives. It works in the same way as a limited company, with all of the rights and responsibilities that come with it. It’s important to note that it’s distinct from a company in one key way: it can’t use the terms “Section 8” or “Limited” in its name.
After that, the Registrar of Companies may award the licence with or without limitations, depending on its discretion. The Registrar will direct the firm to include such licence requirements as the Registrar may specify in this regard in its MOA or AOA, or in both, or partially in one and partly in the other.
Read our article:How to Check Company Name Availability?
Akansha is a Delhi-based lawyer who is actively involved in publishing articles on a plethora of aspects of Indian and International laws. She holds Master in law (LL.M) focused on Business Laws from Amity University, Noida. Having expertise in the same, she has authored several publications on legal topics related to corporate, M&A and commercial laws.
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