Would you like to establish a company? Or have you already built any company? If yes, have you ever thought of what exactly a company is? Well, if you’re new to the company definition, let us tell you about it here. A company is an enterprise or a legal entity formed under the rules and regulations of “Companies Act of 2013.”
While establishing a business or an entity, it’s essential to verify whether you’ve met all the requirements of a company or not. After that, it’s time to select the right kind of company registration depending on your company affairs and activities.
However, if you’re unaware of the types of company registration in India, don’t worry. In this article, you’ll learn about various kinds of company registrations and their registration process in detail.
Let’s dwell deeper.
Types of Companies and Various Company Registration Processes
Before moving into the various types of company registration in India, let’s understand district companies residing in the country. The businesses are classified into multiple categories based on size, the number of employees, liability, access to capital, etc., under the “Companies Act of 2013.”
- Types of Companies Based on Size: Micro, Small, and Medium companies
- Types of Companies Based on Number of Employees: Private, Public, and One Person companies
- Types of Companies Based on Control: Holding, Subsidiary, and Associate companies
- Types of Companies Based on Liability: Unlimited and Limited by shares
- Types of Companies Based on Capital Accessibility: Listed and Unlisted companies
Learn more about – What Is The Procedure For Incorporation Of Company In India? Know The Step-By-Step Process
Types of Company Registration in India: The Detailed Guide
Any business or an enterprise must register legally under the Companies Act of 2013. There are a total of seven types of company registration in India. Due to several options, it’s overwhelming to choose the right kind of company registration.
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 –
- Private Limited Company
- Public Limited Company
- Partnerships Company
- Limited Liability Partnership
- One Person Company
- Sole Proprietorship
- Section 8 Company
Read on to dwell deeper into the company registrations.
1. Private Limited Company
If you’d like to enjoy your company as a private entity, private limited company registration is an ideal choice. Usually, the shareholders take the responsibility of liabilities equally to safeguard their assets. In these companies, the net capital is the total shares held by each shareholder. Unlike many other companies, the private limited company shares aren’t eligible to trade or transfer publicly.
As per the Companies Act of 2013, an enterprise is said to be a private limited company if it meets the following criteria.
- It should consist of at least two directors and utmost fifteen directors.
- One director must be an Indian resident.
- The minimum and maximum shareholders of the company should be two and 200, respectively.
- It should possess a reliable capital fee of a minimum of ₹1,00,000.
- It should have a registered office address within India.
Required Documents for Registration
The essential documents required for the company registration under Private Limited Company are as follows:
- PAN card of all company directors
- Electricity and water bills of the company
- Passport size photo IDs of all directors
- Directors Aadhar card/Voter Id card
- Property documents
- Rental agreements
- Authorization letter from the landowners
Step-by-step Guide to Private Limited Company Registration Process
- Initially, directors should apply for the digital signature and DPIN (Director PIN assigned by the MCA).
- Select any three names for your company and provide them to the MCA. Then, MCA chooses any one of them.
- Submit MOC and AOA.
- Get a company establishment certificate as legal proof for your business, where you can also get a CIN number.
- Finally, apply for the PAN, TAN, and Bank accounts, submitting the necessary documents such as MOA, AOA, and PAN.
2. Public Limited Company (PLC)
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.
Required Documents for Registration
The required documents for the registration of a company as a Public Limited are the same as that of a private limited company.
Step-by-step Guide to Public Limited Company Registration Process
- Before applying for the company registration process, make sure the company has a minimum of seven shareholders, three directors, and capital of at least ₹5,00,000 is required.
- Also, DSC (Digital Signal Certificate) is required during the submission of identity and address proof.
- Apply for DPIN and submit your company name through the application. Make sure to include objective clauses of the business via the application. Usually, this clause explains the specific reason for the company’s establishment, including its establishment date and the various activities performed by it.
- Apply ROC attaching essential documents such as MOA, AOA, Form INC – 7, Form INC-22, and Form DIR-12.
- Pay the registration fee, and once the business gets approval from the ROC, it must apply for the “Certificate of Business Commencement.”
3. Partnership Company
This type of company reflects sole proprietorship in several ways. However, the significant difference between sole proprietorship and partnership is the number of people involved. Partnership businesses consist of two or more people in which the responsibility of each member is stated in the agreement clearly.
Meanwhile, the profits are also shared by the partners based on the agreement. In contrast, the partners are also responsible for taking up losses similar to that of profits. These companies can run their businesses even without a license if they have registered a Partnership Deed. The partnership companies are controlled under the Indian Partnership Act of 1932.
Required Documents for Registration
- Form 1 statement
- Partnership Deed copy including the name of the organization or entity, company’s operations, primary business location, additional company locations, date of partnership, name of the partners and address, time period from which the company has established.
- Partners’ PAN card and Aadhar card/Voter ID card
- Ownership/rent/lease of the business location
The statement must be signed and agreed upon by all partners. Although, the company registration for partnership companies isn’t mandatory. But you can avail of a few benefits by doing so.
4. Limited Liability Partnership
LLP is relatively a new trend where business assets are entirely different from personal assets and provide ultimate limited liability protection. In this company, the partners depend on the quantity of share capital to pay the liabilities.
If you’d like to establish an LLP, one of the important requirements is that you must maintain a minimum capital of ₹1,00,000 with at least one of the partners from this country.
Required Documents for Registration
- PAN card or identity proof such as Aadhar Card, Driver’s License, or Voter ID
- Bank statements, phone bills, mobile bills, and gas bills
- Passport size photocopy
- Foreigners or NRIs require a passport
- DSC and registered office address proof documents
Step-by-step Guide to Limited Liability Partnership Registration Process
- Get the DSC and DIN for your LLP partners. Mostly, DIN or DPIN registration can be done instantaneously. It’s Mandatory to have one DIN for every partner.
- Apply for the approval of your business name by applying for MCA that will be further processed by ROC.
- After the company name gets approved by the higher officials, the partners receive an application.
- Finally, the partner can send the paperwork within 60 days of receiving this letter. Once you receive the registration certificate, you should apply for the Partnership Agreement within 30 days.
Learn more about – What Is Limited Liability Partnership? LLP Registration Process
5. One Person Company
One Person Company registration entered the Indian market recently. Most small businesses or startups run by a single person choose this kind of registration. Under this registration, the owners get liability protection, so they don’t even require any partnerships.
It’s pretty easy to maintain, handle, and run as a single person controls each aspect of the business. In a nutshell, it’s the blend of sole proprietorship and private limited company. The eligibility criteria to avail of this registration are the minimum capital amount should be about ₹1,00,000. If you’re into a finance business, then you aren’t qualified to get an OPC registration. And the individual must be an Indian citizen.
Required Documents for Registration
Below are the few essential documents that need to be submitted by the company’s partners.
- PAN or Passport for foreigners
- ID proof
- Bank statements, electricity, gas, or phone bill
- Photocopy
- Signature of the specimen
The documents required for the registration office are:
- Bank statement or bills
- Rental agreements
- NOC of a property owner
- Copy of property deed(in case of own properties)
Step-by-step Guide to One Person Company Registration Process
- Initially, get DSC and apply for DIN.
- Apply for approval of the company’s name by MCA.
- Submit required forms to MCA and get an incorporation certificate within a few days from the government.
6. Sole Proprietorship
The sole proprietorship is nothing but a company run by a single person. Usually, in sole proprietorship companies, the owner is responsible for all profits or losses. It’s an individual company and pretty easy to set up the business. Mostly work from home or businesses run from home by a single person prefer this type of registration.
Required Documents for Registration
- Utility bills of the company
- KYC details
- Company Establishment License
- Income tax data
Step-by-step Guide to Sole Proprietorship Registration Process
- If you don’t have a PAN card, apply for it and give your name to your company.
- Create a business account and register as an SME under the MSME Act. Usually, registration isn’t mandatory, but you can register to avail of any benefits or grants from the government.
- Also, make sure to opt for GST registration if you get an annual turnover of over ₹20,00,000.
Learn more about – Planning Sole Proprietorship Business? Here Are The Advantages & Disadvantages
7. Section 8 Company
These companies are most commonly known as NGOs or Non-Profit Organizations that actively participate in charity works. The major aim of these companies is to encourage arts, science, education, safeguard the environment, and help the needy.
The few conditions to get an NGO registration are it must have at least two shareholders and directors. In most cases, the shareholders take the responsibility as directors. Unlike many other companies, this doesn’t require any capital. Any one of the directors should be an Indian resident, and the company should register at an Indian address.
Required Documents for Registration
- Digital Signature Certificate
- DPIN/DIN
- MOA and AOA
- ID verification proof
- Passport Size Photographs
- Directors data
- Address verification documents
Step-by-Step Guide to Section 8 Company Registration Process
- All partners must apply for DIN and DSC.
- Choose the three names for the company and get approval from MCA.
- Provide the approval of the department or relevant higher authority if asked by the officials.
- After getting the company name, get the Section 8 company license from MCA.
Let’s Sum It Up
This is all about the types of company registration in India that you should know. There are around seven types of company registrations as follows.
- Private Limited Company
- Public Limited Company
- Partnership Company
- Sole Proprietorship Company
- One Person Company
- Section 8 Company or NGO
- LLP(Limited Liability Partnership) Company
Choose the right kind of company registration based on your business size, characteristics, features, and other requirements.
You can reach out to legal experts at MSMEx where you can choose the best business advisors for your small business. MSMEx.in is an ed-tech platform for MSMEs and small businesses wherein business experts and business advisors are available on call.
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