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This blogs deals with the Types of Companies and it's registration process in India
The most important aspect of starting your own business is complying with the legal requirements to ensure the smooth operation of your business entity. The first step in obtaining legal authorization to conduct business is company registration. It entails adhering to a set of rules and regulations outlined in the Companies Act.
Company registration is a fundamental process that all business owners must understand. The Companies Act, 2013 defines the various types of companies that can be formed in India.
Don't panic, though, if you're not familiar with the several methods of company registration in India. You may find detailed information about various company registration types and their registration procedures in this blog.
So, before you begin the company registration process, take a look at the various types of companies in India that you can register.
Any firm or business must officially register in accordance with the Companies Act, 2013. In India, there are a total of seven different categories of company registration. It can be difficult to select the appropriate type of company registration due to the abundance of alternatives.
However, we’ve come up with a detailed list of company registrations and their application process to make your company registration process effortless.
In short, there are seven types of company registrations in India
Types of Company registration in India
A Private Limited Company is one that is not owned by governmental organisations or is owned by a small number of shareholders or members. Typically, a private company does not offer or trade its shares to the general public on stock exchanges, but rather owns and trades private stock.
Private limited company registration is a great option if you want to use your business as a private corporation. In order to protect their investments, the shareholders typically share in the liability. The total number of shares held by each shareholder constitutes the net capital of these companies. The shares of a private limited business cannot be traded or transferred openly, in contrast to those of many other corporations.
Looking to incorporate your business as a private limited company? The procedure for registering your company as a private limited company is complicated and involves many compliances. Do not be concerned; our experts can assist you at every step of the private limited company registration process. You can use our expert service instead of reading through the entire registration process.
Step 1: obtain a digital signature certificate (DSC)
Step 2: Obtain a DIN number
Step 3: Check for Name Availability*
Step 4: Create SPICe+ INC-32.
Step 5: e-MOA and e-AOA
Step 6: Apply for PAN and TAN
* The RUN Web service, which was previously available for name availability, will now only be available for changing the name of an existing company. The change will take effect on February 23, 2020.
A Public Limited Company, as defined by the Company Act 2013, is a company with limited liability that sells shares to the general public. Its stock can be purchased by anyone, either privately through an initial public offering (IPO) or publicly through stock market trades.
Unlike private limited companies, the share of the public limited company can be held by the general public. It’s established according to company law and can be traded on the stock exchange platforms without a hitch. These types of companies should register for the ROC certification before actively participating in any commercial activities.
Step 1: Application for the Digital Signature Certificate
Step 2: Name Verification
Step 3: Filing Form SPICe+
Step 4: Obtaining Certificate of Incorporation
This kind of business is similar to a sole proprietorship in a number of ways. The number of participants is the key distinction between a sole proprietorship and a partnership, though. Two or more persons can form a partnership business, and the agreement outlines each member's responsibilities in detail.
In the meantime, the partners likewise split the profits in accordance with the contract. The partners, on the other hand, are likewise accountable for bearing losses comparable to those of profits. If these enterprises have a registered Partnership Deed, they can operate legally even without a license. The Indian Partnership Act of 1932 governs the partnership companies.
Step 1: Select a name for your partnership.
Step 2: Create a Partnership Agreement Deed
Step 3: Request a PAN Card in the Partnership's Name.
Step 4: Submit an Application for Registration
Step 5: File the Documents
Step 6: Pay the Fees and Stamp Duties
Step 7: Complete the Deed
Step 8: Certification from the Registrar's
A Limited Liability Structured Company (LLP) must have at least two partners. It is also a new corporate business structure that combines the terms "company" and "Partnership Firm." An LLP is a separate legal entity from the partnership, with separate personal and business assets.
The number of partners' share capital determines their liability. An LLP has higher credibility among its investors than a sole proprietorship or partnership. This is due to the proper upkeep of incorporation records, financial records, and tax records.
Step 1: Obtain a Certificate of Digital Signature
Step 2: Obtain a Director Identification Number (DIN)
Step 3: Reservation and approval of the name LLP incorporation
Step 4: Limited Liability Partnership Agreement
One Person Company Registration just made an entry into the Indian market. This type of registration is used by the majority of small enterprises and startups conducted by a single individual. The owners are protected from liability under this registration, therefore no partnerships are even necessary.
As one person manages every area of the organization, it's fairly simple to maintain, oversee, and run. In a nutshell, it's a hybrid of a private limited company and a sole proprietorship. You cannot register with the OPC if your firm in the finance industry. Additionally, the person needs to be an Indian citizen.
Step 1: Obtain a Certificate of Digital Signature
Step 2: Obtain a Director Identification Number (DIN)
Step 3: Submit Forms to MCA
Step 4: The Certificate of Incorporation is issued.
A sole proprietorship is simply a business that is run by one individual. In sole proprietorship businesses, the owner is often accountable for all gains or losses. It's a one-person business that's rather simple to set up. This kind of registration is used by those who mostly work from home or manage one-person firms from their homes.
There are three ways to register a sole proprietorship:
The primary reason for forming a Section 8 company is to promote non-profit goals such as trade, commerce, arts, charity, education, religion, environmental protection, social welfare, sports research, and so on.
A minimum of two directors are required to form a Section 8 Company. In addition, no minimum paid-up capital is required for a Section 8 Company.
A non-profit organisation in India can be registered with the Registrar of Societies or as a Non-profit company under Section 8 of the Company Act, 2013.
The profits of this company, if any, are used to further the company's objectives rather than being distributed as dividends to its shareholders.
Section 8 Company Registration Procedure
Step 1: Name availability application in RUN form
Step 2: Obtaining First Directors' Digital Signatures
Step 3: Preparation of the Memorandum and Articles of Association, as well as other documents
Step 4: Submission of the SPICe 32 Form
Based on the size, nature, features, and other needs of your firm, select the appropriate type of company registration.
The process of registering a company in India involves several steps such as obtaining Director Identification Number (DIN) and Digital Signature Certificate (DSC) for the directors, obtaining a name approval, registering with the Registrar of Companies (ROC), and obtaining various licenses and approvals. It's important to seek legal and professional help while registering your company to ensure compliance with the laws and regulations.
It's important to understand the differences and benefits of each of these types of companies, and weigh the pros and cons, before you decide which type of company to register. The choice of company type depends on the size, nature and complexity of the business, funding and management structure, compliance requirements etc.
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