How to start your own company in India

How to start your own company in India

Registration of Own Company in India:

Company registration in India starts with selecting a favourable business structure. Before you start giving the shape to your business, it is essential to choose a business structure that will be beneficial for your business in the long run. It is also necessary to select the right business name.

Various types of Own company registration in India

Following are the essential business structures for company registration in India:

  • Private Limited Company
  • One Person Company
  • Limited Liability Partnership

Selecting the proper business structure for the registration of the Own Company in India:

While making a Company Registration in India, it is essential to choose your business structure carefully while registering your Company, as each business structure has different levels of compliance that need to be met with. For example, One Person Company and a Private Limited Company have to file an income tax return and annual returns with the Registrar of Companies. A company's books of accounts are mandatory to be audited every year. Therefore, it is essential to select the proper business structure when thinking of India's company registration.

Essential things to keep in mind while selecting the proper business structure before registering a company in India:

Risk: All businesses carry some degree of risk, and business owners will want to choose a structure that protects their assets from business liabilities.

 

Taxation: Another critical aspect is to think about is taxation. Each business structure has to comply with different business structures. To help you further select, read: What is beneficial Pvt Ltd., OPC or LLP- from the taxation point of view.

 

Complexity: To choose a business structure, it is essential to examine the complexity of the process, list of requirements, compliance etc., before selecting the proper form for your company registration in India.


An entrepreneur must have a clear idea of the kind of legal compliance they are willing to deal with. While some business structures are relatively investor-friendly than others, investors will always prefer a recognized and legal business structure. For example, an investor may hesitate to give money to a Sole Proprietorship Firm. On the other hand, if a good business idea is backed by a recognized legal structure (like Private Limited Company, Limited Liability Partnership etc.), the investors will be more comfortable investing.

Benefits to registering a company in India:

  • The government's initiative in India gives Indian and foreign investors essential opportunities.
  • For foreign nationals, it is straightforward to invest directly in Indian companies through the Indian Subsidiary.
  • The government is offering incentives to encourage investment in Make In India.
  • The government's "Ease of doing Business" initiative helps make India a hub for manufacturing units.
  • India is rich with a large labour pool and admirable levels of judicial transparency.
  • Young and efficient generations help run a business and make it successful ventures.

Comparison between Private Limited and LLP

 

Point of differenceOne Person CompanyPrivate Limited CompanyLimited Liability Company
RegistrationOne Person Company will be registered with the Ministry of Corporate Affairs under the Companies Act, 2013.Private Limited Company will be registered with the Ministry of Corporate Affairs under the Companies Act, 2013.LLP will be registered with the Ministry of Corporate Affairs under the Limited Liability Partnership Act, 2008.
Name of the EntityThe Registrar must approve the choice of the name provided by the Promoter of the Company. Only names that are not identical/similar to an existing company or LLP name and names that are not offensive or illegal would be allowed. The entity's name will end with the words (OPC) Pvt. Ltd./ (OPC) Ltd.The Registrar must approve the choice of the name provided by the Promoter of the Company. Only characters that are not identical/similar to an existing company or LLP name and names that are not offensive or illegal would be allowed. The entity's term will end with "Private Limited Company".The choice of the name provided by the Promoter must be approved by the Registrar of the Company. Only characters that are not identical/similar to an existing company or LLP name and names that are not offensive or illegal would be allowed. The entity's term will end with "Limited Liability Partnership" or "LLP".
Legal Status of EntityOne Person Company is a separate legal entity registered under the Companies Act, 2013. The Directors are liable for defaults made under the act.Private Limited Company is a separate legal entity registered under the Companies Act, 2013. The Directors and Shareholders of a Private Limited Company are not personally liable for the liabilities of the Company.LLP is a separate legal entity registered under the LLP Act, 2008. The partners of an LLP are not personally liable for the liabilities of the LLP.
Member(s) LiabilityShareholders have limited liability and are liable only to the extent of their share capital.Shareholders have limited liability and are liable only to the extent of their share capital.Partners have limited liability and are liable only to the extent of their contribution to the LLP.
Existence of survivabilityThe existence of One Person Company is not dependent upon its members. Hence, it has perpetual succession, i.e., the death of a member does not affect the existence of the Company.The existence of a Private Limited Company is not dependent on the Directors or Shareholders. Could be dissolved only voluntarily or by Regulatory AuthoritiesThe existence of an LLP is not dependent on the Partners. Could be dissolved only voluntarily or by order of the Company Law Board.

TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you with a One-Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else visits TAXAJ

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