Various types Of Companies and Registration In India

Various types of Companies and Registrations

The most important aspect of starting your own business is complying with the legal requirements to ensure the smooth operation of your business entity. The first step in obtaining legal authorization to conduct business is company registration. It entails adhering to a set of rules and regulations outlined in the Companies Act.

Company registration is a fundamental process that all business owners must complete. The Companies Act, 2013 defines the various types of companies that can be formed in India.

Don't panic, though, if you're not familiar with the several methods of company registration in India. You may find detailed information about numerous company registration types and their registration procedures in this blog.

So, before you begin the company registration process, take a look at the various types of companies in India that you can register.

Types of Company Registration in India

Any firm or business must officially register in accordance with the Companies Act, 2013. In India, there are a total of seven different categories of company registration. It can be difficult to select the appropriate type of company registration due to the abundance of alternatives.

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
• Partnership Company
• Limited Liability Company
• One Person Company
• Sole Proprietorship
• Section 8 Company

1. Private Limited Company

Private limited company registration is a great option if you want to use your business as a private corporation. In order to protect their investments, the shareholders typically share in the liability. The total number of shares held by each shareholder constitutes the net capital of these companies. The shares of a private limited business cannot be traded or transferred openly, in contrast to those of many other corporations.‍

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

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.

3.Partnership Company

This kind of business is similar to a sole proprietorship in a number of ways. The number of participants is the key distinction between a sole proprietorship and a partnership, though. Two or more persons can form a partnership business, and the agreement outlines each member's responsibilities in detail.

In the meantime, the partners likewise split the profits in accordance with the contract. The partners, on the other hand, are likewise accountable for bearing losses comparable to those of profits. If these enterprises have a registered Partnership Deed, they can operate legally even without a license. The Indian Partnership Act of 1932 governs the partnership companies.

Required Documents for Registration

• Form1 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 agreement 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

A Limited Liability Structured Company (LLP) must have at least two partners. It is also a new corporate business structure that combines the terms "company" and "Partnership Firm." An LLP is a separate legal entity from the partnership, with separate personal and business assets.

The number of partners' share capital determines their liability. An LLP has higher credibility among its investors than a sole proprietorship or partnership. This is due to the proper upkeep of incorporation records, financial records, and tax records.

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

5. One Person Company

One Person Company Registration just made an entry into the Indian market. This type of registration is used by the majority of small enterprises and startups conducted by a single individual. The owners are protected from liability under this registration, therefore no partnerships are even necessary.

As one person manages every area of the organization, it's fairly simple to maintain, oversee, and run. In a nutshell, it's a hybrid of a private limited company and a sole proprietorship.  You cannot register with the OPC if your firm in the finance industry. Additionally, the person needs to 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)

6. Sole Proprietorship

A sole proprietorship is simply a business that is run by one individual. In sole proprietorship businesses, the owner is often accountable for all gains or losses. It's a one-person business that's rather simple to set up. This kind of registration is used by those who mostly work from home or manage one-person firms from their homes.

Required Documents for Registration

• Utility bills of the company
• KYC details
• Company Establishment License
• Income tax details (PAN)

7. Section 8 Company

The primary reason for forming a Section 8 company is to promote non-profit goals such as trade, commerce, arts, charity, education, religion, environmental protection, social welfare, sports research, and so on.

A minimum of two directors are required to form a Section 8 Company. In addition, no minimum paid-up capital is required for a Section 8 Company.

A non-profit organisation in India can be registered with the Registrar of Societies or as a Non-profit company under Section 8 of the Company Act, 2013.

The profits of this company, if any, are used to further the company's objectives rather than being distributed as dividends to its shareholders.

Required Documents for Registration

• Digital Signature Certificate
• DPIN/DIN
• MOA and AOA
• ID verification proof
• Passport Size Photographs
• Directors data
• Address verification documents

Based on the size, nature, features, and other needs of your firm, select the appropriate type of company registration.

About Jordensky

At Jordensky, we specialise in accounting, taxes, MIS, and CFO services for Startups and growing business and are focused on delivering an experience of unparalleled quality.

When you work with Jordensky, you get a team of finance experts who take the finance work off your plate– ”so you can focus on your business.”