Types of business structures in India.

1. One Person Company (OPC)

Introduced recently in the year 2013, a One Person Company is the best way to start a company if there exists only one promoter or owner. It allows the owner to carry on his work and still be part of the corporate world.

2. Limited Liability Partnership (LLP)

LLP is a separate legal entity, in an LLP the liabilities of partners are only limited only to their agreed contribution. Limited liability partnership (LLP) is a kind of partnership in which a select few or all partners have limited liabilities. In LLP, all the partners are not responsible or liable for another partner’s misconduct or negligence.

3. Private Limited Company (PLC) 
company in the sight of law is regarded as a separate legal entity from its founders it has shareholders (stakeholders) and board of directors (company officers). Each individual is regarded as an employee of the company.

4. Public Limited Company (PLC)

A PLC is a voluntary association of members which is incorporated under company law. It has its own legal existence and the liability of its members is limited to shares they hold.

How to choose a business structure In India?

i. How many owners/partners will your business have?
Whether you are a single person who owns the entire initial investment required for the business, a One Person Company would be ideal for you. On the other side, if your business has two or more owners and is actively finding investments from other third parties like Limited Liability Partnership (LLP) or Private Limited Company would suit you best.  

ii. Should your first investment determine your choice of business structure?
Yes if you want to spend less at first, it would be wise to go in for a single Owner, or a HUF or a Partnership. Nevertheless, if you are sure that you will be able to recover the setup and compliance costs, you can opt for a One Person Company, LLP or a Private Limited Company

iii. Income Tax Rates Applicable to businesses
Income tax rates applicable to a sole owner and a HUF are the normal rates. In case of a sole ownership, the business income is clubbed with the individual’s other income.
But in the case of other entities like partnership and company a tax rate of 30% is applicable.

iv. Plans of getting money from investors
as mentioned before, it is hard to find investments/investors when your business structure is unregistered. Entities like LLP and Private Limited Company are trusted when it comes to investment.   

Benefits of Company Registration in India

A company registration provides many rewards. A licensed company makes it genuine, and improves the business’ credibility.

  1. Protects against personal obligation, and defends against other threats and losses.
  2. Builds goodwill and also supports more customer attraction
  3. Gives reliable investors bank credits and good investment with ease.
  4. Provides cover of the responsibility to protect the company’s assets
  5. Bigger commitment to wealth and greater stability
  6. Increases the ability to develop and grow large

How to Register a Company in India?

Here is what you’ll need to acquire:
i.  A  Digital Signature Certificate(DSC)
ii.  A Director Identification Number (DIN)
iii.  Registration on the MCA Portal or New user registration
IV.  Certificate of Incorporation

Documents required for Company Registration

In India, registration of private limited company cannot be done without proper proof of identity and proof of address. Proof of identification and address would be required for the incorporation of all the company’s directors and shareholders.

The organization must have a registered office in India for online business registration in India. A latest copy of the energy bill or the property tax receipt or water bill must be sent to confirm admission to the registered office. In addition to the tenancy agreement, the maintenance bill or the sale deed or a letter from the landlord with his/her permission to use the office as the company’s registered office is accepted.

An identity and address proof of all the directors and the subscribers to the share capital must be submitted.

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