Many Types of Company Registration Choosing the Right Structure for Success

1. Many Types of Company Registration Choosing the Right Structure for Success. When starting a business, one of the most crucial decisions to make is determining the appropriate company registration structure. The chosen structure not only affects tax obligations and compliance measures but also determines the eligibility criteria to be met. Therefore, entrepreneurs must carefully consider the various options available. In India, under the Companies Act of 2013, there are different classifications and types of companies to choose from for company registration: Based on size: Micro Companies Small Companies Medium Companies Based on the number of members: One Person Company Private Companies Public Companies Basis of control: Holding Companies Subsidiary Companies Associate Companies Based on liability: Limited by Shares or by Guarantee Unlimited Based on capital access: Listed Companies Unlisted Companies To establish a business, entrepreneurs need to select a suitable structure from the following types of company registration provided by the Companies Act, 2013: Private Limited Company: A private limited company offers liability protection to shareholders and separates personal and business assets. It requires a minimum of two and a maximum of fifteen directors, at least one of whom must be an Indian

2. resident. The company must have a minimum of two and a maximum of 200 shareholders, an authorized capital of at least ₹1 lakh, and a registered office address within India. Public Limited Company: A public limited company allows the general public to purchase its shares, which can be freely traded on the stock exchange. It requires a minimum of three directors, with at least one being an Indian resident, and a minimum of seven shareholders without a maximum limit. The company must have an authorized capital of at least ₹5 lakhs and a registered office address within India. Partnership Firm: Partnership firms operate with partners who share responsibilities and profits as defined in a partnership deed. Although registration is not mandatory, it provides additional rights and benefits. A partnership must have a minimum of two partners, a registered office address within India, and a registered partnership deed signed by all partners. Limited Liability Partnership (LLP): An LLP provides entrepreneurs with limited liability protection and a separate legal status. It requires a minimum authorized capital of up to ₹1 lakh, at least one Indian resident designated partner, and a minimum of two partners with no maximum limit. Each partner's liability depends on their share capital contribution. One Person Company (OPC): OPC is suitable for entrepreneurs who wish to run a business individually. It offers liability protection without the need for partners. OPC requires a minimum authorized capital of at least ₹1 lakh, a natural Indian citizen and resident as the individual, and the appointment of a nominee during incorporation. Sole Proprietorship: Sole proprietorship involves a single individual who is solely responsible for the business's profits and losses. It is the simplest form of business with no separate legal entity. Sole proprietorship does not require much investment or compliance. Section 8 Company: Also known as a non-profit organization, a Section 8 company works for charitable purposes. It requires a minimum of two shareholders and directors, with at least one director being an Indian resident. There is no minimum capital requirement, and the company must have a registered office address in India. Final thought: entrepreneurs can choose the most appropriate type of company registration based on their business needs and goals. Seeking assistance from experts such as Setindiabiz Pvt Ltd can simplify the registration process and provide guidance throughout.