Business Registration

laptop, coffee, arm-1205256.jpg

Sole Proprietorship Concern

“Sole proprietorship” business means a business owned by a single owner. It is the simplest business structure and the least regulated one also.

Benefits:
  • Easy to establish;
  • Low compliance requirements;
  • Easy to operate;
  • Privacy;
  • Tax slab is applicable and the benefit of minimum exemption limit can be availed.
Limitations:
  • Unlimited liability - Personal property can be claimed by the banks/lenders in case the business funds are inadequate to repay the business debts;
  • No separate legal identity- As in the case of a Company, Company has the power to hold property in its own name, power to sue / to be sued in its own name. But Sole Proprietorship business has no separate identity in the eyes of law, it can hold property in the name of the owner only, all legal suits can be initiated in the name of the owner only and not in the name of the business.
  • Difficult to obtain loans.
Suitability:
It is suitable for small-scale businesses only, where the risk of loss is low. 
Documents Required:

Partnership Firm

Partnership is an association of two or more persons to carry on a business in the capacity of co-owners. Each such person is called a partner. All the partners share the profits and losses in the proportion of their respective ownership, or as agreed between them.

Benefits:
  • Easy to form
  • Easy availability of funds from multiple partners
  • Sharing of knowledge among the firm
  • Risk is diversified among the partners
  • Voluntary registration
Limitations:
  • Uncertainty of duration
  • Risk of additional liability
  • Disagreement among partners
  • Difficulty in withdrawing investment
  • Unlimited liability
Suitability:
A partnership firm is suitable in case of business where the capital requirement is medium i.e. it is neither too large nor too small. Business like retail and wholesale trade or small manufacturing units can be successfully started by partners. It is most suitable for construction business, legal firms etc. where each partner contributes the best as per his specialization.
Documents Required:
  • Affidavit
  • Attested Copy of the Partnership Deed
  • Proof of Principal Place of Business

Limited Liability Partnership (LLP)

A limited liability partnership is a combination of both partnership and corporation. The partners have limited liability in the LLP which means that the personal assets of the partners are not used for paying off the debts of the company. It is a separate legal entity distinct from the partners.

Benefits:
  • Easy to form
  • Low registration cost
  • No limit on number of partners
  • No minimum capital is required
  • Limited liability
  • Perpetual Succcession
Limitations:
  • Mandatory annual compliance
  • Limited funding
  • Cost of non-compliance is very high
Suitability:

The LLP formation is suited for professionals like accountants, solicitors, architects, consultants, surveyors and other fields of expertise where a partnership is preferred to a limited company.

Documents Required:
  • ID Proof of Partners.(Pan Card)
  • Address proof of partners (Voter’s ID, Passport, Driver’s license or Aadhar Card)
  • Residence Proof (Latest bank statement, telephone bill, mobile bill, electricity bill or gas bill )
  • Photograph
  • Proof of registered office address
  • Phone number and Email ID

One Person Company (OPC)

One Person Company (OPC) is a company incorporated by a single person. Before the enforcement of the Companies Act, 2013, a single person could not establish a company. If an individual wanted to establish his business, he/she could opt only for a sole proprietorship as there had to be a minimum of two directors and two members to establish a company.

Benefits:
  • Separate Legal Entity
  • Easy availability of funds
  • Easy to form
  • Easy to manage
Suitability:

OPC is ideal for anyone who runs a business by his or her own self and wishes to have effective control overall operations of the business, and work in a corporate framework. Any entrepreneur who wants to form a company with limited liability should register for OPC.

Documents Required:
  • PAN card or passport
  • Passport, for NRIs and foreign nationals
  • Scanned file of driver's license or voter’s ID
  • Updated gas or electricity invoice/bank account statement/mobile or landline phone invoice
  • Specimen signature or impression
  • Passport-size photo.
  • Place of registered office (Latest bank statement/Utility Bill/Rent Agreement/NOC from the owner/Sale deed if the property is owned
  • Phone number and Email ID.

Private Company

A Private limited company is a company which is privately held for small businesses. The liability of the members of a Private Limited Company is limited to the amount of shares respectively held by them. Shares of Private Limited Company cannot be publically traded.
Benefits:
  • Limited liability
  • Continued existence
  • Minimum number of shareholders
  • Less legal formalities
  • Minimum share capital
  • Separate legal entity
  • Easy availability of funds
Limitations:
  • Sharing of profit
  • Many legal compliances
  • Heavy penalities in case of non-complaince
  • Costly to manage
Suitability:

Many start-up businesses chooses to operate as private limited company. A limited company is a legal entity in its own right. It has a different structure and more complex requirements such as different tax and legal obligations.

Documents Required:
Documents required from proposed Directors and shareholders (Indian nationals)
  • Scanned file of self-attested PAN Card
  • Govt ID proof - Voters’ ID/Passport/Driver’s license
  • Latest Bank statement
  • Utility bills not older than two months-Mobile bill/Gas Bill/Electricity bill
  • Passport size photograph
  • Phone number and Email ID
  • Specimen signature - Director’s signature on a blank document
  • Phone number and Email ID
Documents required from proposed Directors and shareholders(NRIs)
  • Scanned file of self-attested PAN Card
  • Govt ID proof - Voters’ ID/Passport/Driver’s license
  • Govt ID proof - Voters’ ID/Passport/Driver’s license
  • Latest Bank statement
  • Utility bills not older than two months-Mobile bill/Gas Bill/Electricity bill
  • Passport size photograph
  • Specimen signature - Director’s signature on a blank document
  • Phone number and Email ID
  • As proof of registered office address, the scanned copies of:
  1. Latest water bill or electricity bill or notarized rent agreement
  2.  In case of owned property- Sale deed or property deed: or
  3.  In case of Leased property- NOC from the property owner.

Public Company

A Public Limited Company under Company Act 2013 is a company that has limited liability and offers shares to the general public. Its stock can be acquired by anyone, either privately through (IPO) initial public offering or via trades on the stock market. It is formed with a minimum of 7 members and 3 Directors and no restriction is prescribed for the maximum number of members in a Public Company. 
Benefits:
  • Easy availability of funds from many sources
  • Diversification of risk
  • Opportunity for growth and expansion
  • Less risk of fraud as public companies are highly governed
  • Easy transferability of shares
  • Separate legal entity
Limitations:
  • More compliances as compare to private limited companies
  • Lack of secrecy
  • Distribution of profits
  • Costly to form
  • Costly to manage
Suitability:

It is best suited for large-scale businesses only. This form is also opted by the companies which require huge capital investments.

Documents Required:
  • Identity Proof of all the directors and shareholders.
  • Address Proof of all the directors and the shareholders.
  • Self-attested Pan Card of all the directors and shareholders.
  • Utility Bill for Registered office.
  • NOC from the landlord of the registered office.
  • DSC of the directors and subscribers.
  • DIN of all the directors.
  • Memorandum of Association.
  • Article of Association.
  • Phone number and Email ID

Section 8 Company (Company with Charitable Objects)

Companies registered under section 8 are registered as non-profit companies having objects such as to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives. These companies also apply their profits towards the furtherance of their cause and do not pay any dividend to their members. To incorporate a Section 8 Company, a minimum of two directors are required and there is no requirement of minimum paid-up share capital for Section 8 Company.

Benefits:
  • Separate legal entity
  • Limited liability
  • No requirement of minimum capital
  • Tax benefits
  • Formed for social purpose
  • Licensed by government
  • No dividend distribution
Limitations:
  • No distribution of profits
  • Limited objective
  • Cannot alter the MOA and AOA without central government's approval
  • Many rules and regulations
Suitability:

Section 8 companies are suitable for the companies which are formed as non-profit entities and whose objectives is to promote fields of arts, commerce, science, research, education, sports, charity, social welfare, religion, environment protection, or other similar objectives.

Documents Required:
  • Passport size photo of proposed directors and shareholders
  • Id Proof ( Voter ID/Passport/Driving License)
  • Address proof (Bank Statement/Utility bill not older than 2 months)
  • Registered office proof (Rent agreement/Sale Deed/Utility bill not older than two months/NOC from the owner.
  • Specimen Signature of directors and subscribers
  • Self-attested PAN Card

Nidhi Company

Nidhi Company is a type of Non-Banking Financial Company (NBFC). It is formed to borrow and lend money to its members. It inculcates the habit of saving among its members and works on the principle of mutual benefit. Nidhi Company isn’t required to receive the license from the Reserve Bank of India (RBI), hence it is easy to form. It is registered as a public company and should have “Nidhi Limited” as the last words of its name.
Benefits:
  • Easy formation with minimum of seven numbers out of which 3 will be the directors'
  • No RBI approval is required
  • Secured investments
  • Lower rate of interest in loans
  • Increase in savings of members
  • Formed only to provide benefits to its members
Suitability:
Nidhi company best suited for businesses that desire to enter the world of finance business.
Documents Required:
  • Proof of the registered place of business (Ownership documents/ rent or lease agreement)
  • No Objection Certificate (signed by the owner/ landlord)
  • Identity proofs of members and directors
  • Address proofs of the members and directors (Utility bill/ Latest bank statement)
  • Photos of the members
  • Self-attested PAN card copies of the members
  • Digital Signature Certificate (DSC)
  • Director Identification Number (DIN) of the directors
  • Memorandum of Association of the company (MoA)
  • Articles of Association of the company (AoA)

Producer Company

Producer Company means a body corporate having objects or activities specified in section 581B and registered as Producer Company under the Companies Act, 1956. Under the Companies Act 1956, a Producer Company can be formed by 10 individuals (or more) or 2 institutions (or more) or by a combination of both (10 individuals and 2 institutions). A Producer Company is a body corporate having an object that is one or all of the following:
 
  • Procurement
  • Production
  • Harvesting
  • Grading
  • Handling
  • Marketing
  • Selling
  • Export
Benefits:
Formation of producer companies gives benefits to the members composing it in the form of the value they have created by providing the products or produce they have supplied as members to the company. Members are also eligible to receive bonus shares. Producer companies also gets benefitted in terms of taxation purpose on the baiss of the kind of agricultural activity the company undertakes. Members of the producer company can also avail credit facility from the company for a period not extending six months.
Suitability:
Producer company are suitable for the businesses which are engaged in agricultural activities. Producers of primary produce usually form such type of company.
Documents Required:
  • Scanned file of self-attested PAN Card
  • Govt ID proof - Voters’ ID/Passport/Driver’s license
  • Latest Bank statement
  • Utility bills not older than two months-Mobile bill/Gas Bill/Electricity bill
  • Passport size photograph
  • Specimen signature - Director’s signature on a blank document
  • Phone number and Email ID

Trust

As per the Indian Trust Act 1982, a trust is a form of organisation where the owner transfers its property to the second person i.e., trustee, so that the third person can benefit from it. The transfer of such property cannot take place without a legal process.Formation of trust is done for several purposes and is proved to be an effective channel for succession and property planning. Two types of trusts are normally formed in  India , private trust and public trust. The provisions of the Indian Trust Act, 1882, governs only private trusts. On the other hand, Public Trusts are usually governed by state-specific legislation. 
Benefits:
  • Trusts get land from the government
  • Trust registered under the Trust Act uses Gov. registered name
  • Tax benefits
  • 80G certificate benefit
  • Provide benefits to the poor people
Suitability:
Trusts should be formed when the creator wants to create the trust for the benefit or betterment of the common public or for the benefit of himself or for the benefits of his family member. Trusts also formed for the purpose of tax benefits.
Documents Required:
  • Proof of Identity for Trustor & Trustee-Aadhaar Card, Voter ID, Passport, Driving License
  • Address Proof of Registered Office- Copy of Certificate of Property/Utility Bills (Telephone, Water, Electricity Bill)
  • In the case of rented property, NOC from the Landlord is required.
  • Objective of the Trust Deed.
  • Particulars of the Trustee and settlor (Self-attested copy Id and Address Proof along with the information related to occupation).
  • Trust Deed on Proper Stamp Value.
  • Photographs of Trustee and settlor.
  • PAN Card of Trustee and settlor.
  • In addition to that, the Trust deed contains the following information:-
  • Total number of trustees.
  • The Registered address of the trust.
  • Proposed name of the trust.
  • Rules and regulations to be strictly followed by the Trust.
  • Presence of settlor and 2 witnesses at the time of registration of Trust.

Society

A society registration can be done for the development of fine arts, science, or literature or else for the diffusion of purposeful knowledge or charitable purposes of political education. A Society can be created by a minimum of 7 or more persons. Apart from persons from India, companies, foreigners, as well as other registered societies can also register for the Memorandum of association of the society.
Benefits:
  • Less compliance
  • Availment of tax benefits
  • Easy availability of funds from outside sources
  • 80G certificate benefit
  • Provide benefits to the poor people
Suitability:
Socities which can be registered under section 20 of the Societies Registration Act, 1860 are Charitable societies, the military orphan funds or societies established at the several presidencies of India, societies established for the promotion of science, literature, or the fine arts for instruction, the diffusion of political education, the foundation or maintenance of libraries or reading-rooms for general use among the members or open to the public or public museums and galleries of paintings and other works of art, collections of natural history, mechanical and philosophical inventions, instruments, or designs.
 
Documents Required:
  • PAN Card of the members
  • Residence Proof such as utility bill not older than two months/ Latest Bank statement
  • Memorandum of Association
  • Articles of Association
  • A covering letter
  • Address proof
  • Governing Body
  • Rules and regulations of the soceity
  • Self-declaration

Call us at +91 97166 64652 for a free consultation about the suitable structure for your business and register your business hassle-free.

Scroll to Top