Which Is the Common Business-Types as per Indian Company Formation Act?

In India, following types of businesses are established under Company Formation rule. They include-

• Proprietorship Firm – It refers to a business type operated by one person. He/she is completely responsible for every accountability associated with the business setup. It’s actually meant for owners running a business with limited investment.
• Partnership Firm – The particular business-type may have two or more than two members for its formation. A partnership Company Formation usually complies with Indian Partnership Act, 1932.
• One Person Company – Any One Person Company business must have limited liability. This type of business enjoys tax concessions for 3 years, along with depreciation benefits. That’s not all, One Person Company Formation unlocks zero-tax on dividend distribution for its owner. Just like the other two types of business-setups covered above, One Person Company must file its yearly ROC returns and Business Tax returns.
• Limited Liability Partnership – An LLP, or Limited Liability Partnership (LLP) is a business form which has been established by complying with Limited Liability Act, 2008. A company formed under LLP or Limited Liability Partnership must limit down its liability during Company Formation in India.
• PLC (Private Limited Company) – A PLC (Private Limited Company) is treated as a separate entity from its founder or founders. It’s the directors who are accountable to look into the operations and managerial corporate affairs of the company. The shareholders or stakeholders in a Private Limited Company Formation business are the partial owner of the organization.
• Public Limited Company – A Public Limited Company is established by seven or more members under Indian Companies Act, 2013. Any business-setup considered as a Public Limited Company after its formation, must let the directors take the responsibility for running its managerial and operational affairs. A Public Limited Company Formation must have legal existence and liability of the members are limited to shares it holds. A Public Limited Company business raises capital from the public, irrespective of its size or structure.

What Are the Steps for Company Formation in India?

In India, Company Formation involves a specific process. The entire process has been shared below-

• Obtaining Digital Signature Certificate (DSC) and DIN (Director Identification Number). It can be applied and obtained via online MCA portal as well
• Give Unique Company Name to the company formed which defies its similarity from other existing competitor firms
• File incorporation documents by drafting and submitting Memorandum of Association (MoA) and Articles of Association (AoA). The documentation process can also be completed by filling up the forms using SPICe+ Part A form
• If the documentation process is satisfactory, a Company Formation or incorporation Certificate is dispatched to the applicant
• Fulfil post-registration requirements like open business bank account, register for GST, obtain other licence along with availing PAN and TAN

Still Have Further Queries on Company Formation in India?

Call us for premium guidance on hassle-free Company Formation in India!