Your choice depends on business size, risk, ownership, and taxation. Common structures include:
Before we embark on the journey of choosing the right business structure, we must first take a step back and evaluate our business idea. This is the seed from which our startup will grow, and it needs to be robust and viable.
Once we have a solid business idea, we need to understand the different business structures available to us. The structure we choose will have significant implications for our tax obligations, legal liability, and ability to raise capital.
A sole proprietorship is the simplest business structure. It is owned and operated by a single individual, who has complete control over the business. However, the owner is also personally liable for all business debts and obligations.
Example: If you start a small consulting business on your own, you might choose to operate as a sole proprietor. But remember, this structure does not provide any protection for your assets in case of business debts or liabilities.
Key Features:
1. Choose a Business Name
Pick a unique name that reflects your business. There's no formal approval required, but make sure it's:
2. Get a PAN Card
You'll operate under your PAN, so ensure your Permanent Account Number is valid and active.
3. Open a Current Bank Account
To separate business and personal transactions, open a current account in your business name. Most banks will ask for:
4. Register Under the Shop and Establishment Act
This is mandatory in most states for businesses with a physical office or shop. Apply to the local Municipal Corporation or Labour Department.
5. Apply for GST Registration (if applicable)
GST registration is mandatory if:
6. Get Additional Licenses (as needed)
Depending on your business, you may also need:
7. Maintain Records and File Taxes
Advantages of a Sole Proprietorship
A partnership is a business structure where two or more individuals share ownership. Each partner contributes to all aspects of the business and shares in the profits and losses. Partnerships can be a good choice for businesses with multiple owners, but they also come with shared liability.
Consider this: If you and a friend decide to start a restaurant together, you might choose to form a partnership. But be aware, each partner is personally liable for the business's debts and obligations.
1. Choose a Partnership Name
2. Draft a Partnership Deed
The Partnership Deed is the core legal document. It should include:
The deed must be printed on Stamp Paper (value depends on your state) and signed by all partners in the presence of witnesses.
3. Register the Partnership (Optional but Recommended)
Although registration is not mandatory, it's advisable to register for legal protection.
Registration Process (India):
Once approved, you'll receive the Certificate of Registration.
4. Apply for PAN Card of the Firm
5. Open a Current Bank Account
Requirements:
6. Register for Taxation (if applicable)
7. Additional Licenses (if required)
Depending on your industry:
Notes:
A Limited Liability Company (LLC) is a hybrid business structure that combines the simplicity of a sole proprietorship or partnership with the liability protection of a corporation. Owners of an LLC are not personally liable for the company's debts or liabilities.
Imagine you're starting a tech startup with high financial risks. In this case, forming an LLC can protect your personal assets from any business-related liabilities.
1. Limited Liability Protection
2. Separate Legal Entity
3. Flexible Management
4. Tax Benefits
5. No Requirement for Minimum Capital
6. Fewer Compliance Requirements
7. Perpetual Succession
8. Easy to Form and Operate
9. Credibility and Transparency
A Private Limited Company (PLC) is a popular choice for startups in India. It offers limited liability to its shareholders, can raise capital by selling shares, and has a separate legal identity from its owners.
Consider this: If you're planning to raise venture capital for your startup, you might choose to form a PLC. This structure allows you to issue shares to investors in return for their investment.
Private Limited Company is the most prevalent and popular type of corporate legal entity in India. Registering a company offers many benefits. GetmyCA offers Company Registration in which registered company makes your business genuine and increases the authenticity of your business. Company Registration is a popular option to start a business by startups and businesses with higher growth aspirations.
Private limited company registration is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014. One of the primary steps in Company Registration is to ensure that the company name has not already been taken by another legal entity. We can run a company name search to check the availability of the particular name in India against the MCA and trademark database.
To register a private limited company while Company Registration , a minimum of two shareholders and two directors are required. A natural person can be both a director and shareholder, while a corporate legal entity can only be a shareholder.
For Company Registration , the name of your business must be unique. The suggested name should not match with any existing companies or trademarks in India.
There is no minimum capital amount for a company. A company should have an authorized capital of at least Rs. 1 lakh when its going to register for company registration
The registered office of a company does not have to be a commercial space. Even a rented home can be the registered office, so long as an NOC is obtained from the landlord.
If you want to start a business start with company registration then make sure your company is registered as Company Registration should be your first priority. It is very important to register your company because a registered company has multiple advantages i.e. easy to register to easy to dissolve.
Private Limited Company Registration can be done through GetMyCA(company registration agent). If you want to register your own company then you can totally rely on GetMyCA(company registration services provider). We will help you with company formation procedures.
Requirements For Company Registration
Private Limited Company Benefits
The idea of One Person Company (OPC) was introduced to give a boost to entrepreneurs who have great potential to start their own venture by allowing them to create a single person company. Since, no intervention from any third party is seen, it makes it more beneficial. So, if you want to start up your own business, you don’t have to worry about all the complex and tedious processes.
One Person Company are helping tremendously in increasing the overall economy of India. More and more Entrepreneurs are coming up and setting up their business. Since, no intervention from any third party is seen, it makes it more beneficial. Since, no intervention from any third party is seen, it makes it more beneficial.
Register OPC Because:
Digital Signature and DIN
Digital Signature Certificate (DSC) and Director Identification Number(DIN) is required for the proposed director of the one person company. DIN and DSC can be obtained for the proposed director in 2 to 4 working days.
Name Approval
A minimum of one and a maximum of six name choices can be submitted to the government. Subject to availability, company naming guidelines and government processing time, name approval can be obtained in 2 to 4 working days.
Company Registration
On obtaining company name approval, incorporation documents must be submitted to the government along with an application for registration. The government will usually approve the application for incorporation in 5 to 7 days, subject to their processing time.
To know more about Company Registration kindly keep reading our blogs. We are also specialized in providing our services to small business & medium business organizations, so just speak to our team & share required details & get your work done by our professionals.
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