Choosing a business structure is one of the most important decisions to be taken by entrepreneurs as a business can’t be successful only with a great idea and investment. A successful business also depends on the type of business structure entrepreneurs are using. You can take help of professionals for startup registration or online company registration in India as it involves less cost, less time and efforts.
We are explaining below business structures prevailing in India along with their features to help you in your startup registration:
Sole proprietorship
Sole Proprietorship is suitable for those businesses which are small in size or have limited investment. As there is a single owner, all the profit and loss is shared by that single person only. All the assets owned by the owner himself and the liability of the owner is limited to the extent of capital contributed by him. It is easy to form and does not have any legal formalities as compared to Partnership or Company.
Read Other Blog: WHAT IS MSME REGISTRATION FEES & PROCESS?
Partnership Firm
A Partnership Firm is an agreement between two or more persons or partners who come together to form a business. Partners make a partnership deed which is a written agreement specifying the names of each partner, address, capital invested by each partner and profit sharing ratio. All the partners have unlimited liability. Registration of a partnership firm is not mandatory but it is always advisable to register it.
Limited Liability Partnership
Limited Liability Partnership is formed to provide limited liability to its partners. It has benefits of both partnership firm and company into a single form of organization. Partners have limited liability to the extent of capital contributed by them and they don’t have to suffer on behalf of its other partners. It is easy to form and it is also easy to become a partner in LLP.
Private Limited Company:
A Private Limited Company is a company which is owned privately by the individuals. The private company registration process is more flexible and easy as compared to Public company registration process because many provisions of the Companies’ Act 2013 are not applicable to it. The minimum number of directors required in it is 2 and the minimum number of shareholders required in it is 2 and the number of shareholders is limited to 50 only. It cannot invite the public to apply for its shares. It is more preferred by investors because they can buy/sell their shares easily.
Public Limited Company:
A Public Limited Company is a company which is owned by the public or in which the public can subscribe. It can raise capital from the public directly through issues of shares. The minimum number of directors required in it is 3 and the minimum number of shareholders required in it is 7 and there is no limit on the maximum number of shareholders. Its shareholders have limited liability to the extent of the face value of its shares and the premium respectively.
One Person Company:
One Person Company or OPC was introduced in India so that an individual person can also start his company. OPC has only one person as a member who can act in the capacity of a director as well as a shareholder. It is only permitted to a resident of India to incorporate OPC and any person from outside India cannot incorporate it. One person company registration process is easy as there are less legal requirements as compared to Private and Public company registration process.
The process of startup registration or online company registration in India is difficult to understand for entrepreneurs and also involves tedious documentation part. The company registration process also requires professional certification from professionals like CA, CS, and CMA. Therefore, it is better to consult professionals for startup registration and online company registration in India.
You can search such professionals on online directory of CAONWEB near you who can help you in startup registration and online company registration in India.