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Picking the right company structure for your business is as important as any other business-related activity. The right business structure will allow your enterprise to operate efficiently and meet your required business targets. In India, every business must register themselves as part of the mandatory legal compliance. Before we learn how to register a company, let’s try and understand the types of business structures in India.
Type of Business Structures in India
For starting a company in India, one can choose any of these business structures:
- OPC (One Person Company): If there is only one founder/owner of the business, an OPC will be an ideal choice for registration of the Company. Registering for OPC will enable the sole owner to be a part of the corporate framework and carry on his work further. The registration of a One Person Company requires documents such as DIN, DSC, PAN Card, address proof, ID proof of both Director and shareholder along with address proof of the company and rent agreement (if any).
- Sole proprietorship: Sole Proprietorship is a business structure that is under the control of a single owner. This business structure is ideal for small businesses or businesses with limited investment. The owner of a sole proprietorship business structure himself owns all the property as well as assets. The registration of a Sole Proprietorship requires documents such as Aadhar Card, PAN Card, registered office proof and bank account details.
- Partnership: The business structure which has 2 or more owners is called Partnership. The owners of this business structure are known as partners. The profits of the business are shared among the partners on the basis of a written agreement. The documents required for Partnership formation include PAN Card and address proof of partners and firm, Partnership Deed, GST registration, and bank account details.
- Limited Liability Partnership: A Limited Liability Partnership is a business structure formed for providing limited liability to its partners. The law sees this business structure as a corporate body. The act of 2008 granted these business structures the right to manage their own affairs. The documents required for registering an LLP include address proof of office and partners, DSC, and ID proof of partners.
- Private Limited Company: The law considers a company as a separate legal entity from its core founders. After a company gets registered, it will have company officers (Directors) and stakeholders (shareholders). Each individual in a Private Limited Company gets regarded as the Company’s employee. The documents required for registering a Private Limited Company include DIN, DSC, PAN Card, address proof, residence proof, Memorandum of Association and Articles of Association.
- Public Limited Company: The business which has a voluntary association of members under company law is called PLC. A PLC has a separate legal existence. The liability of the members of a PLC is limited to the shares they own. The documents for registering a Public Limited Company include identity proof, address proof, and PAN Card of all Directors and shareholders, DIN, DSC, Utility Bill, NOC from the landlord, Memorandum of Association, and Articles of Association.
After selecting the right company structure, one can proceed ahead to issue the documents required for company registration in India.
Benefits of Company Registration in India
A company registration provides many advantages. A licensed company makes it genuine, and enhances the business’ credibility.
- Protects against personal obligation, and defends against other threats and losses.
- Builds goodwill and also supports more customer attraction
- Gives reliable investors bank credits and good investment with ease.
- Provides cover of the responsibility to protect the company’s assets
- Bigger commitment to wealth and greater stability
- Increases the ability to develop and grow large
About the Companies Act, 2013
The Companies Act, 2013 passed by the parliament has received the assent of the President of India on August 29, 2013. The act consolidates and amends the law relating to companies. The Companies Act, 2013 has been notified in the official gazette on August 30, 2013. Some of the provisions of the act have been implemented by a notification published on September 12, 2013. The provisions of Companies Act, 1956 is still in force.
Requirements of Online Limited Company Registration in India
There are few requirements to be known before initiating a Company in India;
- The company must have a unique name which should not be same as any other registered company and trademark.
- It is mandatory for a company to have a minimum two directors.
- As well as it is necessary to keep in mind that the company should have minimum two shareholders.
- All directors & members of company should have digital signature certificate which will be used to register a company.
- There is no minimum capital required for initiating a company.
- The process of online company registration is quite simple; make sure that you have a unique name for your company which will surely help you with quick company registration.
- You must avoid any offensive name for your company registration.
Documents required for Company registration in India-
- Copy of PAN Card or Passport of directors in case Foreign Nationals & NRIs
- 2 Passport size photographs of the proposed directors of the company
- ID proof such as Aadhaar Card or Voter identity card of the proposed directors
- Copy of address proof such as rent agreement or property papers
- Electricity or Water bill of the proposed registered office of the company
- Landlord NOC in case of rented office
- In the case of personal property, a copy of sale deed or property deed
- For foreign nationals, a notarized copy of the passport must be submitted mandatorily. The residence proof documents like a bank statement or electricity bill must be less than two months old.
- To get company registration in India, the company must have a registered office. In order to prove the functionality of the registered office, a recent copy of the electricity bill or the property tax receipt or water bill must be submitted. Along with the rental agreement, utility bill, or the sales deed and a letter from the landlord with her/his consent to be used to register the particular address as the registered office.
Recent updates- Company Registration
On Mar 9, 2020- SPICEe+ Form requires Mandatory Registration of EPFO & ESIC. After the introduction of SPICe+ (e-form) for company incorporation in India, registrations for EPFO and ESIC shall be mandatory for all the registered organizations, and none shall be separately issued by the respective agencies.
On Mar 06, 2020- Company Registration must be done in a new MCA portal
A Public, Private, and one person company registration in the EPFO, ESIC will be done on the new MCA portal. It simplifies the registration process by using a new web form SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus), integrating ten services from various departments.
Takeaway
If you are willing to register a startup or a new company in India then you need to record it in Indian official records i.e. Ministry of Corporate Affairs (MCA). One does not need to visit the corporate office for registration as it can be done while sitting at home. The registration includes Digital Signature Certificate(DSC), Director Identity Number(DIN) and filing for an e-form.
