what are the different types of companies?

It’s critical to check whether you’ve met all of the company’s standards before starting a business or forming an entity. After that, depending on your firm’s concerns and activities, you must choose the appropriate type of company registration.

Don’t worry if you’re unfamiliar with the several types of company registration in India. In this post, you’ll discover all about different types of company registrations and how to register them.

Let’s take a closer look.

Various Company Registration Processes and Company Types

Let’s have a look at the different sorts of company registration in India before going on to the many types of district firms that exist around the country. The “Companies Act of 2013” divides enterprises into numerous groups based on their size, number of employees, liability, access to financing, and other factors.

1.Micro, Small, and Medium Businesses are the three types of businesses based on their size.

2.Private, public, and one-person businesses are the three types of businesses based on the number of employees.

3.Holding, subsidiary, and associate corporations are the three types of companies based on control.

4.Liability-based company types include: Shares are both unlimited and limited.

5.Company Types Based on Capital Availability: Companies that are both listed and unlisted

Find out more about – What Is The Procedure For Company Incorporation In India? Understand The Step-By-Step Procedure

The Detailed Guide to Company Registration in India

The Companies Act of 2013 requires any firm or enterprise to register legally. In India, there are seven different methods of company registration. It can be difficult to choose the proper type of company registration because there are so many alternatives.

However, to make your company registration procedure as simple as possible, we’ve compiled a comprehensive list of company registrations and associated application processes.

In India, there are seven different forms of company registrations. –

• Limited Liability Corporation (LLC)
• Limited Liability Corporation (LLC)
• Company Partnerships
• Limited Liability Corporation (LLC)
• a one-person business
• A sole proprietorship is a business that is owned and operated by one person.
• Section 8: Business

Continue reading to learn more about company registrations.

1.Limited Liability Company

If you want to run your business as a private entity, forming a private limited company is the way to go. Typically, shareholders share liability risk equally in order to protect their investments. The net capital of these companies is the total number of shares held by each stakeholder. The shares of a private limited business, unlike those of many other companies, are not eligible for public trading or transfer.

According to the Companies Act of 2013, if an organisation meets the following characteristics, it is classified as a private limited company.

• It should have at least two directors and a maximum of fifteen.
• One of the directors must be a resident of India.
• The firm should have a minimum of two shareholders and a maximum of 200.
• It should have a dependable capital fee of at least $1,000,000.
• It should have an Indian registered office address.

Documents Required for Registration

The following are the necessary paperwork for forming a Private Limited Company:

• All company directors’ PAN cards
• The company’s electricity and water bills
• All directors’ photo IDs (passport size)
• Aadhar card/Voter Id card for Directors
• Documents related to real estate
• Rental contracts
• Letter of authorization from the landowners

A Step-by-Step Guide to Creating a Private Limited Company

• Directors should first apply for a digital signature and DPIN (Director PIN assigned by the MCA).
• Choose three names for your business and submit them to the MCA. MCA then chooses one of them.
• Send in your MOC and AOA.
• As legal confirmation of your business, obtain a company establishment certificate, which also includes a CIN number.
• Finally, provide the appropriate documents, such as the MOA, AOA, and PAN, to apply for a PAN, TAN, and bank account.

2.Public Liability Company (PLC)

Unlike private limited corporations, the general public can own a share in a public limited company. It was formed in accordance with business legislation and is freely traded on stock exchange systems. Before engaging in any commercial operations, these sorts of businesses need apply for the ROC certification.

Documents Required for Registration

The documentation needed to register a company as a Public Limited are the same as those needed to register a private limited company.

A Step-by-Step Guide to Creating a Public Limited Company

• Make sure the firm has a minimum of seven shareholders, three directors, and a capital of at least $5,000,000.00 before submitting for the company registration process.
• DSC (Digital Signal Certificate) is also required when submitting proof of identity and address.
• Apply for a DPIN and include your business name in the application. Make sure to include the business’s objective clauses in the application. This clause usually details the exact purpose for the company’s formation, as well as the company’s founding date and numerous activities.
• Attach necessary documents to the ROC application, such as the MOA, AOA, Form INC – 7, Form INC-22, and Form DIR-12.
• Pay the registration cost, and then apply for the “Certificate of Business Commencement” once the ROC has approved the business.

3.Partnership Firm

In numerous aspects, this sort of business resembles a single proprietorship. The amount of people engaged, however, is a substantial distinction between a sole proprietorship and a partnership. Partnership firms are made up of two or more people, with each member’s responsibilities explicitly outlined in the agreement.

Meanwhile, profits are shared among the partners in accordance with the agreement. Partners, on the other hand, are likewise accountable for absorbing losses comparable to earnings. If these enterprises have registered a Partnership Deed, they can operate without a licence. The Indian Partnership Act of 1932 regulates partnership corporations.

Documents Required for Registration

• Form 1 declaration
• Copy of the partnership deed, which includes the name of the organisation or entity, the operations of the firm, the principal business location, additional company locations, the date of the partnership, the names and addresses of the partners, and the time period in which the company was founded.
• PAN card and Aadhar card/Voter ID card of partners
• The business location is owned, rented, or leased.
• All partners must sign the statement and agree to it. Although it is not required for partnership companies to register, it is recommended. However, there are a few advantages to doing so.

4.Partnership with a Limited Liability

LLPs are a relatively new trend that separates corporate assets from personal assets and provides ultimate limited liability protection. The partners in this corporation rely on the amount of share capital to satisfy the liabilities.
If you want to form an LLP, one of the most crucial conditions is that you have a minimum capital of $1,000,000.00 with at least one partner from this country.

Documents Required for Registration

• PAN card or other form of identification, such as an Aadhar card, a driver’s licence, or a voter identification card
• Bank statements, phone bills, mobile phone bills, and gas bills are all examples of financial statements.
• Photocopy of a passport size
• A passport is required for foreigners and non-resident Indians.
• Proof of DSC and registered office address

The Limited Liability Partnership Registration Process: A Step-by-Step Guide

• For your LLP partners, obtain the DSC and DIN. In most cases, DIN or DPIN registration can be completed in a matter of seconds. Every partner must have their own DIN number.
• By submitting an MCA, you can get your business name approved, which will then be handled by ROC.
• The partners will receive an application once the company name has been approved by higher officials.
• Finally, the partner has 60 days from the date of receipt of this letter to send the papers. Within 30 days of receiving the registration certificate, you must apply for the Partnership Agreement.

What Is a Limited Liability Partnership? – Find out more. The Procedure for Forming an LLP

5.One-Person Business

One Person Company registration is a relatively new concept in India. This is the type of registration chosen by the majority of small enterprises or startups conducted by a single person. The owners benefit from liability protection as a result of this registration, thus they don’t need to form any partnerships.

It’s simple to maintain, manage, and run because only one person is in charge of all aspects of the firm. It’s a hybrid of a sole proprietorship and a private limited company in a nutshell. To be eligible for this registration, you must have a minimum capital amount of around $1,000,000. If you’re in the finance industry, you’re not eligible for an OPC registration. Also, the person must be an Indian citizen.

Documents Required for Registration
The following are a few important documents that the company’s partners must submit:

• For foreigners, a PAN (Permanent Identification Number) is required.
• Proof of identification
• Bank statements, utility bills (electricity, gas, and phone)Photocopy
• The specimen’s signature

The following documents are requested by the registration office:

• Statements from the bank or bills
• Rental contracts
• A property owner’s NOC
• a copy of the deed to the property (in case of own properties)
• The One-Person Company Registration Process: A Step-by-Step Guide
• To begin, obtain a DSC and apply for a DIN.
• Submit an application to the MCA for approval of the company’s name.
• Submit appropriate forms to MCA and receive an incorporation certificate from the government within a few days.

6.A sole proprietorship is a business that is owned and operated by one person.

A sole proprietorship is a business owned and operated by a single individual. In most sole proprietorship businesses, the owner is personally liable for all earnings and losses. It’s a one-of-a-kind firm that’s quite simple to set up. This sort of registration is used by most people who work from home or manage enterprises from their homes.

Documents Required for Registration

• The company’s utility bills
• Details about Know Your Customer (KYC)
• License for the establishment of a business
• Data on income taxes
• The Sole Proprietorship Registration Process: A Step-by-Step Guide
• If you don’t have a PAN card, get one and give it to your employer.
• Create a business account and apply to be classified as a small business under the MSME Act. Registration isn’t always required, but it is if you want to take advantage of government perks or incentives.
• Also, if your annual turnover exceeds $20,000, you should consider GST registration.

Interested in learning more about – Starting a Sole Proprietorship Business? The Benefits and Drawbacks are listed below.

7.Section 8: Business

These businesses are generally referred to as NGOs, or Non-Profit Organizations, and they actively participate in charitable activities. The primary goal of these businesses is to promote the arts, science, and education, as well as to protect the environment and assist the less fortunate.

There are a few requirements for obtaining an NGO registration, including the presence of at least two shareholders and directors. The majority of the time, the shareholders act as directors. Unlike many other businesses, this one does not require any funding. Any one of the directors must be a resident of India, and the firm must be registered in India.

Documents Required for Registration

• Certificate of Digital Signature
• DPIN/DIN
• AOA and MOA are two terms that are used interchangeably.
• Proof of identification
• Photographs in Passport Size
• Data on the directors
• Documents for address verification
• Section 8 Company Registration Process: A Step-by-Step Guide
• DIN and DSC must be applied for by all partners.
• Choose three firm names and seek clearance from the MCA.
• If officials request it, provide the department’s or appropriate higher authority’s approval.
• Obtain a Section 8 company licence from the MCA after deciding on a firm name.

Let’s Sum Up What We’ve Learned So Far

This is everything you need to know about the several types of company registration in India. The following are the seven different categories of business registrations.

Limited Liability Corporation (LLC)

Limited Liability Corporation (LLC)

Company in Partnership

Company with a Sole Proprietorship

a one-person business

Section 8: Business or Non-Profit Organization

Company LLP (Limited Liability Partnership)

Based on the size, characteristics, features, and other criteria of your business, select the appropriate type of company registration.