Company registration has become a compulsory step, for any individual(s), looking to start a business. It has become the most important factor due to both tax and legal reasons. Company registration is a necessary and compulsory step in India, for most business structures. And to coherently follow the procedure of company registration, you must ensure that your business is in alignment with certain compliances.
The registration step also permits a company to hire new people and pay them salaries, with respect to state laws. The step of company registration also provides tax benefits and exemptions to certain types of business structures. So make sure to get your company registered.
You must be very cautious while choosing your business structure, as your “Income Tax Returns”, are dependent on it. And when you are registering your business, do understand that every kind of business structure, must adhere to different levels of compliances. For example:- In the case of a “Sole Proprietor”, the sole member has to file only the “Income Tax Return”. But this fact changes with the change in the type of business structure. A company must file annual returns along with income tax returns, with the ROC (Registrar of companies).
Also, the directors of a company must ensure, that their company’s financial books are audited every year. Adhering to all these legal compliances brings the requirement of spending money on auditors, tax filing experts. So it is very essential to choose the right business structure when you are thinking of company registration. The aspiring entrepreneur must gain all the information, about all the kind of legal compliances, he is going to deal with. Some kinds of business structures are very investor-friendly whereas others are not. And investors will always find a legal and recognized business structure more lucrative.
When you are going for company registration, it becomes very essential to select the best business structure for your company.
So if you are an aspiring entrepreneur and are looking to find the best business structure for your company, then you must think about the following aspects:-
No. of Partners In Your Business
In case you are the only individual, who owns all the initial principal investment amount, which is required for the initiation of business operations, then a “One Person Company”, will be the ideal business structure for you. But in case your business has two or more partners and all the partners are looking for investment from other parties, then a “Private Limited Company” or a “Limited Liability Partnership”, will be the best business structure.
Understand the Importance of Your Initial Investment amount
In case you have a lesser amount of money for an initial investment, then you should go for a Sole proprietor or a partnership. But in case you have a high initial investment amount and are sure of the fact that you will be able to recover the cost of your set up, then you can go for an OPC, Pvt. Ltd. Company or an LLP.
Inclination to take the burden of the entire liability of the business
Certain business structures possess unlimited liability, For example:- partnership, sole proprietor, HUF. This means that in the scenario of a default, the entire amount of money will be recovered either from the members or the concerned partners. The personal assets of the directors fall in the high-risk category in this kind of case. But business structures like companies and LLPs, do possess the benefit of limited liability. In other words, the entire liability of the members is limited to the extent of the contribution they have made. Or the financial value of shares, which is owned by each of the members.
Different income tax rates apply to different business structures
In the scenario of a Sole Proprietorship, the business income is combined with the other income of the sole member. In the case of “Sole Proprietorship” or “HUF”, the usual rate of income tax is applicable to both and in the case of a company or a partnership, a 30% tax rate is applied.
Plans for procuring money from investors
In case your business structure is not legally registered, you will face a lot of difficulties in procuring money from investors. Business structures like LLP or Pvt. Ltd. Company are highly trusted by investors.
||Private Limited Company
||One Person Company
||Limited Liability Partnership
||Companies Act, 2013
||Companies Act, 2013
||Limited Liability Partnership Act, 2008
||Indian Partnership Act, 1932
||No specified Act
|Number of members
||2 – 200
||2 – 50
|Separate Legal Entity
If you want to register a company in India, then you must ensure that you have proof of address and proof of identity. Both become necessary documents for initiating the incorporation process, of all the directors of the company.
All the relevant documents of the directors and shareholders must be submitted to the registrar, during the process of registration. Pan Card/Aadhar card/Driving license/passport are some of the following documents, which serve as identity proof. And the most recent Latest Telephone Bill /Electricity Bill/ Bank Account Statement will work as the address proof. If a business entity wants to start an online business, then also it is required to have a registered office in India.
A recent copy of an energy bill or the property tax receipt or water bill will work as proof of the physical presence of the office. Also with the tenancy/rental agreement, the maintenance bill or the sale deed or a letter or NOC from the landlord with his/her permission can also be submitted as proof.
With all these documents, it is mandatory to submit both the DIN and DSC of all the directors.
- A company by getting itself registered, increases it’s credibility level.
- Provides Protection to the business against any kind of personal obligation.
- It helps in building a high goodwill level, which further attracts more business.
- Helps in earning the trust of investors, which leads to more investment.
- Curates new pathways for the growth and development of the company.
LLP (Limited Liability Partnership)
A Limited Liability Partnership, acts as a distinct legal entity and has its own set of benefits. Each partner’s liability in the LLP is limited to the contribution, made by him. So if you are looking for “Company registration online”, in other words, you want to register your LLP. Then it’s formation cost is very low. An LLP does not have to deal with a large number of regulations/Compliances and above all, there is a big advantage.
Which is that, in the case of an LLP, there is no necessity for a minimal capital contribution. An LLP must have two partners/ directors present, for the initiation and completion of its incorporation process and there is no pre-determined limit, for the maximum number of partners.
Of the two partners, one has to be an Indian resident. Both the partners are proportionately responsible for the compliance of all the rules and regulations, mentioned under the LLP Act 2008 and they also must adhere to all the provisions specified in the LLP agreement. So if you want to go to “Company Registration Online”, then do contact us.
Private Limited Company Registration
A “Private Limited Company”, is a form of the company structure, chosen by small businesses. This type of company structure has its own merits. The liability of the owners, is limited to their shareholdings and the maximum number of shareholders can be 200 and the shareholders are not permitted to trade shares, publically.
A “Private Limited Company”, is a completely separate legal entity. By going for “Company Registration Online”, you can save money and the creditors do have the authority to sell the personal assets of the directors, in case of a default. It is one of the most favorite company structures of budding entrepreneurs. As it assists in raising funds via equity and limits the liability, at the same time.
All companies are registered in India, with the “ROC (Registrar of companies) and they fall under the umbrella of Companies Act, 2013. And a “Private Limited Company”, has the advantage of indefinite life. That means, that it will continue its existence until it is legally dissolved by the concerned parties.
So go for, Company registration online and get complete assistance, from the expert team of “LegalRaasta”.
A partnership is a unique form of a business organization, where a minimum of two people come together, to incorporate a business. The specified number of partners, also agree to divide the profits into a pre-determined ratio. A partnership can be easily formed and there is minimum compliance. So it is advised to go for company registration online, by contacting the team of “LegalRaasta”, if you want a hassle-free process.
Make sure that the name of your partnership is neither the same nor identical to an already present firm that is performing the same business. A partnership deed is curated for the incorporation of a partnership. The deed specifies the rights, duties, profit shares, and other obligations of each of the partners.
Indian Partnership Act, 1932, performs the function of governing partnerships. It clearly states that it is not compulsory for partnerships to get registered. If you want to register for a partnership firm, then there is a procedure. You must submit the registration application along with the fees to the “Registrar of Firms”, of the particular state, where your firm is situated. And if the registrar is satisfied with the provided documents, he will perform the function of registering the entity. The partnership will be registered in the “register of firms” and the applicants will be issued a certificate of registration.
Choose “Company registration online” and register your partnership firm with the help of “LegalRaasta”.
Sole Proprietorship Registration
A “Sole proprietorship” is a form of business structure, managed only by a single individual and it is not needed to be registered. It has a minimal number of compliances. The factor of “Corporate Payments” is not involved in this case. A single person has complete control of the business.
The sole owner has unlimited liability. If you want to register your “Sole proprietorship”, then go for company registration online. As a “Sole proprietorship”, you will be required to file “Income Tax” returns annually and if you are registered under the umbrella of GST. Then, you must file a GST return.
The best thing about a “Sole-Proprietorship”, is that all the decision making power and all the control resides in the hand of one person only. To contact the expert team of LegalRaasta and go for company registration online.
Public Limited Company
A “Public Limited Company”, is registered under the umbrella of Companies Act, 2013. It is a form of company that has limited liability and it also offer shares to the public. The stock of a “Public Limited Company”, can be acquired by any willing individual. This form of business organization is highly regulated and it is essential for it to publish it’s true financial health. If you want to register a “Public Limited Company”, then you must go for company registration online and contact LegalRaatsa’s expert team.
Companies Act, 2013 states that there must be a minimum of 3 directors present, at the time of the incorporation process. The maximum number of directors can be infinite and a “Public Limited Company”, is required to possess a minimum paid-up capital of Rs.5 Lakhs. It also must issue a prospectus, which is a detailed statement of the affairs of a company. It must add “Limited” at the end of its name. As it is a requirement under the Companies Act, 2013.
“Public Limited Company” is a highly popular form of business structure.
So go for company registration online and get your company registered with the help of an expert team of “LegalRaasta”.
One Person Company Registration
In a “One Person Company,” only one person is the company’s sole member. An individual who is a member of an OPC is not permitted to be a member of another OPC. This form of business structure can convert itself into another type of company also. There is no requirement for an OPC, to show a cash flow statement in its financial statement.
It is not permitted to do “Non-Banking Financial Investment projects. And it can raise capital easily from investors and financial institutions”. A minor cannot become a member of this form of company. When the registration process of a “One Person Company” is completed, the Registrar of Companies (ROC) will issue the Certificate of Incorporation. And the sole member can begin the business operations.
So if you are looking for company registration online and want hassle-free services. Then contact the team of professionals at “LegalRaasta”.
Most of the budding entrepreneurs are looking for the kind of license, through which their business, will be recognized by the Indian government. And MSME (Micro Small and Medium Enterprises) /SSI (Small Scale Industries), stands out as the best option for them. MSMEs are bifurcated into three segments
(a)Micro Enterprises:- If a business puts Rs.25 lakhs in a specific business in the manufacturing sector, then it comes under Micro enterprises.
(b)Small Enterprises:- When a business entity, puts more than Rs.25 Lakhs and less than Rs.5 Crores in a specific business in the manufacturing sector. Then it comes under the roof of “Small Enterprises”.
(c)Medium Enterprises:- In the case, a business organization has put, more than Rs.5 crores and less than Rs.10 crores in a specific business in the manufacturing sector. Then it comes under the terrace of “Medium Enterprises”.
Whereas, SSI is a form of company, which performs the function of manufacturing goods or services. But with the assistance of smaller machines and fewer workers.
As soon as a company gets the tag of being an “MSME or SSI”, it obtains the benefit of utilizing various schemes and incentives. As per the Indian government regulations.
If you want the tag of “MSME/SSI”, on your business, then you must go for company registration online” and contact the team of “LegalRaasta”.
Section 8 Company
A “Section 8 Company”, is a form of company, which is solely registered for “Charitable or Non-Profit” purposes. Its registration is done under the “Ministry of Corporate Affairs” of the Central Government. The central aim of a “Section 8 Company” is to promote the welfare of society and work for the betterment of society. It is not allowed to earn profits.
By going for company registration online, you can easily register a “Section 8 Company”. This form of the company requires no minimum amount of capital. All the involved partners of a “Section 8 Company” have the benefit of limited liability. It also gets tax benefits. But only if it gets registered under section 80G and 12AA of the IT act and follows all the mentioned rules of the act.
“Nidhi” company is a variant of a Non-Banking Financial Company (NBFC). It is formed for the purpose of borrowing and lending money to its members only. This promotes the habit of saving among its members. A “Nidhi” company is not required to obtain a license from the Reserve Bank Of India. It is registered under the disguise of a “Public Company” and it must add “Nidhi Limited”, as the last words to its name.
You need at least 7 members are required to start a “Nidhi” company. By going for Nidhi company registration online, you can easily commence the process of registering for a “Nidhi” company. Out of the 7 members, 3 must be the directors of the company.
Minimum 5 Lakh rupees are required as “Equity Share Capital”, to launch a “Nidhi Company”. It must gather a minimum of 200 members, within a period of one year (From its date of launch) and the net owned funds should be Rs.10 Lakhs or more.
So if you want to start a “Nidhi” company, then go for company registration online. And contact the expert team of “LegalRaasta”.
Indian Subsidiary registration
A subsidiary company is a form of company, whose control is in the hands of another company. The company which possesses the control is known as either as a “Parent Company” or a “Holding Company” and it owns the majority of the subsidiary company’s shares.
Therefore, it has all the rights of a major shareholder. The particular form of company in which the holding company has 100% share capital, is known as a “Wholly-owned” subsidiary. SPICe+ Form is to be filled for the registration of a subsidiary company. A business organization, which is looking for expansion, will have to go through the channel of forming subsidiaries.
For registration of an Indian subsidiary, make sure to go for company registration online, and the expert team of “LegalRaasta”, will assist you.
Micro Finance Company
A “Micro-Finance Company”, is a form of the financial entity, which provides monetary assistance to low-income groups because of lesser finance requirement in comparison to other sectors of the society. As these sectors don’t have proper access to well established financial institutions such as banks. This form of the company structure encourages women’s entrepreneurship.
The registration of a “Micro-Finance Company” is possible in two ways:-
- Non-Banking Finance Companies (NBFC), are registered with RBI.
- Section 8 company (A company formed under Section 8 of the Companies Act 2013).
The minimum net owned funds required are Rs.5 Crores but for the northeastern region, the requirement is Rs.2 Crores. For being registered as a “Micro Finance Company”, the first step is the formation of a private or a public limited company.
So if you want to register a “Micro-Finance Company”, then go for company registration online and contact the expert team of “LegalRaasta”.
NBFC (Non-Banking Financial Corporation)
It is a form of the company structure, which is incorporated under the Companies Act, 2013. As per, section 45-I (c) of the RBI Act, any non-banking company, carrying on the business of a financial institution, will be termed as an NBFC.
The act also states that an NBFC must be involved in the business of loans and advances, acquisition of equities, stocks, etc., which are released by the government/local authority. It can be defined as a company, whose principal business is of receiving deposits under the umbrella of any scheme or arrangement. RBI has stated a clear definition for a financial activity, which will be considered as the principal business. The criteria is known by the name “50-50 test”. It is as follows:-
- The financial assets of the company must comprise 50% of the total assets.
- The income earned from the financial assets must be comprised of fifty percent of the total income earned.
An NBFC Registration is not allowed to receive deposits that are payable on demand.
So if you want to register your NBFC, then go for company registration online. And contact the team of LegalRaasta, for a safe and sound registration process.
A producer company is a legally recognized body of farmers and/or agriculturists, whose aim is to enhance the standard of their living conditions and ensure proper support, profitability, and income. Companies Act, 1956, states that a producer company can be incorporated by at least 10 people or at least 2 institutions or via a combination of both. The objectives of a producer company must be the following:-
- Selling, or
All these objectives are in relation to the primary production of the members of the import of goods/services for their advantage. The registration procedure of a producer company is similar to that of a private limited company. So for an easy registration process, go for company registration online. The Income Tax Act, 1961, under the umbrella of section 10(1), has exempted agricultural income.
So the tax benefit and exemption is entirely dependent on the kind of activity, being carried on by the producer company.
Choose a Producer company registration online and register your producer company in an easy manner. The team of “LegalRaasta”, is always ready to assist you.
Where can my company, be registered?
If you are looking to register a new company in India, then you must submit your registration application along with all the relevant documents to the MCA (Ministry of Corporate Affairs). You can submit the application online also.
What will happen in the case, of my company being already taken by someone else?
MCA has a proper registry of all the registered company names. So you will have to search in the directory, to know if your proposed company name is already registered or not.
Can an NRI, be the director of a company?
Yes, according to Indian laws, an NRI can be the director but he/she must fulfil all the criteria laid down in the Act. The foreign national, must have a DIN (Director Identification Number).
How long does it take to get a company registered?
According to the new rules laid down by the MCA, you can register your company in just 10-15 days.
Do all the partners/directors need to be present online for the registration process?
The complete process is online, so there is no need for to be physically present. But a scanned copy of all the documents must be submitted via e-mail.
How will I know, if my company is registered?
You can check the status of you company’s registration process on the MCA website online portal. Perform the following steps for checking the status:-
1. Go to MCA services tab.
2. Select “View Company/LLP Master Data” from the drop-down section.
3. After that enter put company’s CIN. And click on Submit.
4. Then you will be able to see the status.
How much time does LegalRaasta.com take to get the Private Limited Company registered?
Generally, it takes 25-30 days to get it done. But we at LegalRaasta will get your limited company registered within 10-20 days.