What are the entity options to register a business in India?

This article talks about different entity options to register a business in India, starting from advantages to regulations to costs are detailed out. Majorly, there are 5 types of entities that can be registered while starting up a new business, these are defined in Companies Act, 2013:

  1. Sole Proprietorship
  2. Partnership Firm
  3. One Person Company
  4. Limited Liability Partnership
  5. Private Limited Company

Sole Proprietorship
A sole proprietorship is a business that is owned and managed by a single person. It is very popular among the unorganized sector, particularly small traders and merchants. There is no such thing called registration, Proprietorship recognized by other registration. Liability of the proprietor is unlimited and the firm cannot have continuous existence. It should ideally only be considered by small merchants and traders

Important registrations:

  • Professional Tax Registration
  • GST Registration

Partnership Firm
A simple partnership firm is similar to sole proprietorship for all practical purposes. A partnership firm also requires all the registrations required by sole proprietorship firms. Partnership firms can be either registered with the registrar or remain unregistered. A pan card has to be obtained from the firm and the liability of the partners is unlimited whereas the firm cannot have continuous existence.

Important registrations:

  • Professional Tax Registration
  • GST Registration

One Person Company (OPC)
OPC is a recently introduced improvement on sole proprietorship firm registration. This gives the promoter an invaluable advantage of limited liability & the company can have continuous existence. OPC has to be incorporated through Ministry of Corporate Affairs. Not even an audited annual returns need to be submitted to MCA. The company can nominate any other person as a director without executive powers. The service charge for this service ranges from Rs. 5000/- to Rs 12000/-

Limited Liability Partnership (LLP)
LLP introduced in 2008, which is an improvement over the general partnership. This gives promoters an invaluable advantage of limited liability & the company can have continuous existence. The company has to be incorporated through Ministry of Corporate Affairs. Not even an audited annual returns need to be submitted to MCA. The service charge for this service ranges from Rs. 6000/- to Rs 14000/-

Private Limited Company
It is the most popular legal structure for business and allows outside funding and also employee stock options. More stringent compliance measures to be followed, hence more credibility. The company needs to appoint an auditor and the audited financial statements are to be submitted to MCA annually. The company is eligible to issue debentures and convertible debentures. The service charge ranges from Rs.7000/- to Rs.15500/-

Company incorporation is streamlined with the introduction of INC-29:

From May-2015, company incorporation can be divided into 2 broad steps

  • Obtaining Digital Signature Certificate
  • Preparing and submitting INC-29

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Government Fees for various types of companies

  • One Person Company Rs.6850/-
  • Limited Liability Partnership Rs.3167/-
  • Private Limited Company Rs.7800/-

Documents Required for INC-29

  • Director Identification Number (DIN)
  • Memorandum of Association (MOA)
  • Articles of Association (AOA)
  • Affidavit and declaration by first Subscribers and Directors.
  • Proof for Registered Office Address. Rental Agreement / Sale Deed.
  • Copies of a utility bill of the registered office address that are not older than 2 months.
  • If the proposed company name is a filed or registered trademark, then NOC from the trademark applicant or owner must be attached.

Start-up process entails complex procedures and many bureaucratic hurdles, entrepreneurs are better off using professional services. Hiring a virtual lawyer and virtual accountant can save time and help ensure that the process goes smoothly. For any Legal and Accounting support, Happy to help you, let us talk!

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Kanti sharma
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Kanti sharma

Hi, I would like to start manufacturing and selling of herbal hair oil and pickle from home. What are licensing; legal and registration formalities? need help.

admin
Admin

Hi Kanti,

Nice to e-meet you!

Your query has been passed on to our team, you will get a response shortly to your personal email Id.

Happy to help!

Thanks

Alfas Rehman
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Alfas Rehman

Hello Gentleman, Good Day! I would like to start household and utility manufacturing company and planning to concentrate sales outside India. Designing will come under our scope and Manufacturing is planning to be done with other small scale companies under our brand name. Hence what are the requirements in order to start a company which I am planned for, and which type of company will be helpful among the 5 types of companies? How much should I invest for registration and other legal formalities? Is there any yearly tax or fee regardless of our manufacturing? Is there any mandatory having… Read more »

admin
Admin

Hi Alfas,

Nice to e-meet you!

Your query has been passed on to our team. You will get a reply to your personal email Id by today.

Happy to help!

Thanks

Santosh
Guest
Santosh

Hi
I’m looking forward to starting a bakery/cafe. How would or what would I start with to get legal permissions from all the concerned departments. Please help me with this.

admin
Admin

Hi Santosh,

Nice to e-meet you!

Your query has been passed on to our team, you will get a response shortly to your personal email Id.

Happy to help!

Thanks

Lin
Guest
Lin

kindly let me know the details for the same. I would like to open it in Banglore

Moosa
Guest
Moosa

Hi, I’d like to start selling online on amazon but require GST. How do I get GST and business pan card for it.
Also I’d like to start a sole proprietorship(for e-commerce). How do i go about that and get a separate GST and pan card for it.

admin
Admin

Hi Moosa,

Nice to e-meet you!

We have received your query, and our team will get back to you on your personal email Id.

Thanks

Best regards,

Puneet
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Puneet

Hi, I’d like to start selling online on amazon but require GST.

I’d like to start a sole proprietorship (for e-commerce). Do I need to form a DBA name or can do using my name itself?

From where should I start with this? Do I need a current bank account for this or saving account is fine?

admin
Admin

Hi,

You should be good to sell as a sole proprietor on Amazon.

GST registration is mandatory and current account will be necessary.

Thanks

Regards,
Mekala

abhishek agarwal
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abhishek agarwal

Hi, I’d like to start selling on online marketplaces so for that i want to open a sole proprietorship company(for e-commerce) plus i want to register my own brand also so that i can sell my own branded products also . so for all this what i need and what is the process and how much time will it take, waiting for your positive response.

Vaibhav Sharma
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Vaibhav Sharma

I want business plan for stationery and cyber cafe

Vaibhav Sharma
Guest
Vaibhav Sharma

I want business plan for education consultancy

JimmiNi
Guest
JimmiNi

Good article on incorporating private limited company or an LLP or Partnership firm

Lin
Guest
Lin

hi

i’ve decided to open up a small cupcake/cake shop in banglore, Can you please help me with the certificates and licences required for the same.
Thankyou

Michael Cob
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Michael Cob

Can’t accept enough, this is a must-read for founders.

Sahil Sawant
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Sahil Sawant

I have an open e-wallet business plan. What is the the procedure to start a company?

Vaibhav Sharma
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Vaibhav Sharma

Want to start my travel Agency as sole proprietorship

Sajeev
Guest
Sajeev

Hi,
Can you help me to register my new company ?

Thank you!

Shobha
Guest
Shobha

Dear team,
I am planning start a small juice shop in Bangalore. Kindly let me know whom do i approach for getting this done. What documents are needed to get this done.e

Regards,
Shobha

Timothyfag
Guest
Timothyfag

Nice article for founders planning to register their business in India.

Shridhar ROKADE
Guest
Shridhar ROKADE

Can I register my card room in Maharashtra udyog adhar or register for shop act and I want to know what is difrence between shop act licence and m u h

Nikita Sharma
Guest
Nikita Sharma

Very informative.

Bharath Jigsmo
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Bharath Jigsmo

I want to start a coffee shop in business tech park

Arfat memon
Guest
Arfat memon

i Want to start bussiness of online selling
vegetables

Mohit
Guest
Mohit

Hi
I’m looking forward to starting a cafe. How would or what would I start with to get legal permissions from all the concerned departments. Please help me with this.

Krishnaji
Guest
Krishnaji

Hi sir,
I would like to start a pvt ltd company of trading and selling of chemicals. What are licensing; legal and registration formalities? need help.

Gunjan Mehrotra
Guest
Gunjan Mehrotra

Hi I would like to start a business of plantation gardening landscaping horticulture vertical wall gardening with drip irrigation system foggers sprinklers rain dance set up mist etc. What legal formalities I have to follow please suggest.

Pounraj
Guest
Pounraj

I would like to start a small business like get the grocery items like dhall, sugar etc. In bulk and repack with my brand name and distribute in small shops. Pls guide me for government process

likith
Guest
likith

i want to start a air ticket booking website with 360 view from website in which they wish to travel. is this a feasible business wat are possible complications that may turn up???

Rupam Das
Guest
Rupam Das

Hello Sir,
I have registered my enterprise under udyog Adhaar but i have not started my business as i want to apply for loan from bank. Does Udyog Adhaar certificate will help me for getting loan for my new manufacturing business?

BISWAJIT DUTTA
Guest
BISWAJIT DUTTA

Dear sir/madam,

I want to set up a company (initially LLP) in the field of IT and R&D . I need the expert advise towards suitable incorporation to get maximum benefit from the Govt under various scheme for R&D/IT/etc.

Shikhar Pathak
Guest
Shikhar Pathak

I am opening a dropshipping store and going for a sole proprietorship is it ok?

And yes I will not be buying or selling in India (buy from China sell in US) so can u help me with the taxation I mean how many taxes I have to pay and to whom.

thank you