Registered Indian company
OCF (Overseas Company Formation) is a unit of SG Legals Private Limited, (www.sglegals.com) have experience of India company registration & factory setups with its expert team members of India. It has branches in New Delhi, Noida, Gurgaon, Mumbai and below is the process of formation/registration of India company.
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.
What are the types of business structures in India?
Let’s try and understand the types of business structures available in India. Here is a list of some of them:
1. One Person Company (OPC)
Recently introduced in the year 2013, an OPC is the best way to start a company if there exists only one promoter or owner. It enables a sole-proprietor to carry on his work and still be part of the corporate framework.
2. Limited Liability Partnership (LLP)
A separate legal entity, in an LLP the liabilities of partners are only limited only to their agreed contribution.
3. Private Limited Company (PLC)
A company in the eyes of the law is regarded as a separate legal entity from its founders It has shareholders (stakeholders) and 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 a separate legal existence and the liability of its members are limited to shares they hold.
You can choose what business structure suits your business needs best and accordingly register your business.
Other forms of business structures include Sole proprietorship, Hindu Undivided Family, and Partnership firms. Please bear in mind, these structures do not come under the ambit of company law.
How to choose a business structure while applying for company registration in India?
Let’s take a look at some important questions every entrepreneur must ask himself before he/she finally decide upon a business structure.
i. How many owners/partners will your business have?
If 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 hand, if your business has two or more owners and is actively seeking an investment from other parties a Limited Liability Partnership (LLP) or Private Limited Company would suit you best.
ii. Should your initial investment determine your choice of business structure?
The answer to that question is – Yes if you want to spend less initially, it would be wise to go in for a Sole Proprietor, or a HUF or a Partnership. But, 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. Willingness to bear the entire liability of the business
Business structures like sole proprietor, HUF, and partnership firm have unlimited liability. This means, in case of any default in loans, the entire money will be recovered from the members or partners in profit sharing ratio. The risk to personal assets is high in these cases.
Whereas, Companies and LLPs have a limited liability clause. This means that the liability of its members is restricted to the amount of contribution made by them or the value of shares each member holds.
iv. Income Tax Rates Applicable to businesses
The income tax rates applicable to a sole proprietorship and a HUF are the normal slab rates. In case of a sole proprietorship, 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.
v. Plans of getting money from investors
As mentioned earlier, it is difficult to get investments when your business structure is unregistered. Entities like LLP and Private Limited Company are trusted when it comes to investment. Make sure you choose the right structure, seek the help of an expert so that you register under proper guidance.
4. How to Register a Company in India?
Registering a company in India is now a simple 4-step process. 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
With this, we have covered the basics of how to register a company. If you still need help registering your company, don’t stress over it, and let our team of experts guide you.
- Digital Signature Certificate application;
- Director Identification Number application;
- Apply for the company name in the Ministry of Corporate Affairs;
- Present all data to the registry for application;
- Writing articles of association (MOA&AOA);
- The Registration Board gets the company’s business permit;
- Tax code TAN;
- Apply for a permanent PAN account number ;
- Open bank account;
- Apply for import and export rights;
- Helping with the double accreditation of the Indian Embassy in China;
- Responsible for the production of the company’s corresponding documents and seals;
- Give a half year of virtual address;
Santosh Gautam Manager Company Secretary
CA Rohit Chola Chartered Accountant
MEGHA PUROHIT Legal Project Manager
She holds a B.A.LL.B (Hons) degree from GURU GOBIND SINGH INDRAPRASTHA UNIVERSITY, Delhi As an Overseas Legal Project Manager at…
SRIDHAR SUNDARAUM Overseas Project Manager
He holds a B.A.LL.B (Hons.) from University of Allahabad and a Master Business Administration from Chatham University, Pittsburgh, PA, USA.…