Types of Company Registration in India

Introduction

Small and medium businesses are the backbone of the country’s economy. Setting up a business is a long and tedious process. There are many factors that come into the successful setup of a new business, like capital generation, securing a business loan, company registration, etc. But do not worry anymore, as 

Flexiloans is an online NBFC company that helps people establish new businesses. Flexiloans help provides loans for start-ups, help in registration of the company, help in GST registration, establish an eKYC account, etc. If you dream of setting up a new business of your dreams, then Flexiloans is the right place for you. In this article, we will be reading about the types of company registration in India and how Flexiloans can help you register your company.

What are the Types of Company Registrations in India

There are multiple types of company registrations in India depending upon the type of business, industry, scale of business, etc. Below are the different types of company registrations in India and the prerequisite requirements for them- 

Sole Proprietorship

This is the most basic and simplest form of company registration in India. This type of registration gives one person the complete proprietorship or ownership of the company. The requirements for this type of registration are:

• Aadhaar card
• Pan card
• Proof of office (rent agreement or light bill)
• Bank account details

This type of registration has several benefits like:

• Single income tax.
• Income tax is to be paid only on your sole income.
• Complete ownership of profits 
• Easy to register with no government compliances to be fulfilled.

One Person Business

This is the latest type of company registration introduced by the government of India in 2013. This registration allows a single person to own a business without needing a business partner. The eligibility for having a one-person business is a minimum capital amount of ₹1,00,000. Most small and medium-scale businesses have this type of registration. The documents required for one-person business registration are:

• PAN card.
• Aadhaar card or ID proof.
• Signature of the owner.
• Address Proof.

Limited Liability Partnership (LLP)

The LLP is also a new type of company registration in India. In this type of company, the assets of the business partners are separated as personal and business assets. This separation of assets provides limited liability protection to the business owners/partners. The eligibility of LLP registration is that at least one of the business partners must maintain a minimum capital of ₹1 lacs. The documents required for LLP registration are:

• PAN card.
• ID proofs like Aadhaar card, passport, driving license, etc.
• Bank statements.
• Rental proof like a rent agreement, light bill, etc.
• Passport size photograph. 
• Non-Indian citizens require a passport.

Partnership Company 

This type of company registration is one of the most common types of registration in India. In a partnership company, two or more individuals come together to establish a business in partnership. A mutual agreement is signed between the partners, and each partner’s roles and stake are specified. The agreement also includes the details regarding the profit sharing and the designation of each partner. The mutual agreement is called the partnership deed.

A partnership company can also run a business without a license; however, a partnership deed is mandatorily required. The documents required are:

• A Form 1 statement.
• A copy of the partnership deed.
• PAN card of the business partners.
• ID proofs like the business partners ‘ ID proofs like Aadhaar card, driving license, passport.
• Proof of the business location like a rent agreement or light bill.

Private Limited Company registration

A private limited company is a privately owned entity by a select few stakeholders. A private limited company is limited by the number of shares it holds and also by the liability of the company. The shares of a private limited company are completely owned by the stakeholders/partners of the company and cannot be traded. The documents required are:

• PAN card of the directors.
• Business place proof like a rent agreement, lease copy of the office, light bill.
• Aadhaar card or other ID proof of the directors.

Public Limited company registration

A public limited company is one in which even the common public can buy, own and sell shares of the company. By doing this, the shareholder becomes liable for the profit or loss incurred by the company. This makes the shareholders part owners of the company. The shares of the public limited company are listed on the stock exchange. The documents required are:

• PAN card of the directors.
• Business place proof like a rent agreement, lease copy of the office, light bill, etc.
• Aadhaar card or other ID proof of the directors.

There are many prerequisite conditions for establishing a public limited company. These are:

• A minimum of seven shareholders and three directors.
• A minimum of ₹ 5,00,000 in share capital.
• A digital signature certificate (DSC) of one of the directors.
• A name for the corporation.
• A DIN for one of the directors of the corporation.

Section 8 Company registration

A section 8 company is called a Non-Profit Organizing (NPO) and includes various charity organisations, NGOs (Non – Governmental Organizations), charity businesses, education trusts, etc. It is similar to a limited company, but the only difference is that the profits are used for causes like charity, education, healthcare, etc., which the company supports. The documents required for a Section 8 company registration are:

• Digital Signature Certificate (DSC) of the director.
• DIN (Director Identification Number) of the director
• MOA (Memorandum of Association) and DOA (Date of Association) documents
• ID proof such as Aadhaar card or Driving license of the director.
• PAN card of the director.
• Address proof.

Conclusion

Medium and small businesses are the lifeline of the country’s economy. New business owners face many challenges like arranging capital, securing business loans, registering the company, etc. Flexiloans is a digital-based NBFC company that helps aspiring business owners boost their business setup. We are committed to helping our clients secure their loans, consult the best loan for them, get a GST number, and help the clients register their company according to the law.

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