Type of companies that can be register in India
- One Person Company (OPC) - It is a form of company with only one member.The process of starting up an OPC is same as that of a general private limited company. It is a hybrid structure that infuses the benefits of a sole proprietorship business with a company form of business. For more details on One Person Company.
- Private Limited Company- A separate legal entity with perpetual succession. With a minimum capital requirement of Rs. 1,00,000, and at least two directors/subscribers, it is the easiest form of company to register and maintain.
- Public Limited Company- Minimum capital requirement is Rs. 5,00,000 and at least three directors. A public limited company can start its operations only after obtaining a Certificate of Commencement from the Registrar in addition to Certificate of Incorporation.
- Company Limited by Guarantee - A major difference of this form of company with other forms is that it does not have a share capital or any shareholders. Incidentally, the company is governed by its members, and the extent of their liability is defined by the Memorandum of Association.
- Non-profit Organizations (Generally known as Sec.8 Companies) – In India, popularly called Non-Profit organizations, come in three flavors, namely Trusts, Societies, Section 8 companies.
Advantages of company incorporation in India?
- Liability of the subscribers (the directors and shareholders) is limited to the amount of money they have paid for shares, thus Stakeholders are not typically liable for corporate debts and liabilities.
- Extra capital can be raised by selling shares either privately or in the market. Members can leave or join without any restriction.
- The death, bankruptcy or withdrawal of capital by one member does not affect the company’s ability to trade.
- The disposal of the whole or part of the business is easily arranged.
- Enjoys high credibility as the books of accounts and other documents are available for public vigilance.
- ESOPs sweat equity and other incentives can be issued, which help attract and attain best of talents.
- Overall transparency at various levels.
- Separate Legal Entity from its owners. A company can sue or be sued on its own name.
- Broader capital base than proprietorship firms. Usually attracts venture capitalists, angels and merchant bankers.
Also read – Advantages of Private Limited Company
How do I know that which company will be best suited to me?
- Private Limited Company has lesser legal compliances.
- It is relatively less cumbersome to incorporate, organize and operate a Private Limited Company as it has been exempted from many regulations and restrictions to which public limited company is subjected to.
- There is no requirement of raising finance through public issue in case of Private Limited Company.
- A Private Company can commence its business immediately after its incorporation, whereas a Public Limited Company cannot start its business until a Certificate of commencement of business is issued to it.
- If limited capital is available, scale of operation is relatively low and ownership is intended to be held by limited people, then Private limited company is the best choice.
Steps to be taken to Register a Private Limited Company :-
Minimum Requirements -
a) Need Minimum 2 Directors or Persons.
b) Need Minimum 1 Lac Rupees Share Capital i.e after the company registration you have to deposit 1 lac Rupees Cash in your company bank account.
- Initial Documents Required for Company Incorporation
- ID Proof and Address Proof for all Directors
- PAN Card Mandatory
- Latest utility bill (electric bill/telephone bill) for the property to be used for registered office (not older than 2 months)
- latest tax receipt/ownership deep of the property (not older than 2 months
Time Period to Incorporate a Private Limited Company ?
A Private Limited Company can be registered 20-25 days. The time taken for registration will depend on submission of relevant documents by the client and speed of Government Approvals. To ensure speedy registration, please choose a unique name for your Company and ensure you have all the required documents prior to starting the registration process.
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