ENTITY REGISTRATION

When you start a business, you need it to make sure your business is registered with the proper authority. The most common problem business face in the pre incorporation process is to decide the structure of the business whether it has to be a sole proprietor or a partnership firm or a company. The question is the most common among the startups.

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Different types of entities are as follows:

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1. Sole Proprietorship: A sole proprietorship is a type of enterprise that is owned and run by one natural person and in which there is no legal distinction between the owner and the business entity. The owner is in direct control of all elements and is legally accountable for all the liabilities of such business and this may include debts, loans, loss, etc.

2. Partnership: A partnership is a formal arrangement in which two or more parties cooperate to manage and operate a business. Various partnership arrangements are possible in which all partners might share liabilities and profits equally or some partners may have limited liability. Not every partner is necessarily involved in the management and day-to-day operations of the venture, such as in the case of a "silent partner.    

3. Limited Liability Partnership (LLP): Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. It is a partnership in which some or all partners have limited liabilities. In an LLP, each partner is not responsible or liable for another partner's misconduct or negligence. . With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held.

4. Company: There are multiple type of companies some of them are as follows:

• One Person Company: The concept of One Person Company in India was introduced through the Companies Act, 2013 to support entrepreneurs who on their own are capable of starting a venture by allowing them to create a single person economic entity. With notification of Chapter II of the Companies Act, 2013 with effect from 01.04.2014, it is now permitted to incorporate a One Person Company under the provisions of the Companies Act, 2013.

• Public Company: A public limited company is a form of business organization that operates as a separate legal entity from its owners. It is formed and owned by shareholders. Shares of a public limited company are listed and traded at a stock exchange market freely. Shareholders of a public limited company are limited to potentially lose only the amount they have paid for the shares they own. Public Limited Companies requires at least 3 directors, seven members and there is no cap on the maximum number of members. A public limited company has all the advantages of private limited company and the ability to have any number of members, ease in transfer of shareholding and more transparency.

• Private Limited Company: Private limited company registration is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014. To register a private limited company, a minimum of two members and two directors are required. It is a type of company that offers limited liability, or legal protection for its shareholders but that places certain restrictions on its ownership. These restrictions are defined in the company's bylaws or regulations and are meant to prevent any hostile takeover attempt.

• Producer Company: Producer Company is a company registered under the Companies Act 2013 and shall carry on any of the following activities:

1. Production, harvesting, procurement, grading, pooling, handling, marketing, selling, export of primary produce of members or import of goods or services for their benefit;

2. Processing including preserving, drying, distilling, brewing, venting, canning and packaging of produce of its members; and

3. Manufacture, sale or supply of machinery, equipment or consumables mainly to its members.

Over 85% of the Farmers in India are small and marginal farmers with land holdings of less than 2 hectares. This fragmentation in farmers and farm lands, leads to disorganization and it is not viable for Indian farmers to adopt the latest technologies. By organization of these farmers into producer companies, economies of scale can be unlocked and the livelihood of farmers can be improved. Thus, the concept of producer company is aimed at empowering farmers by creating clusters of farmers organized as a Producer Company.

• Nidhi Company: A Nidhi company, is one that belongs to the non-banking Indian finance sector and is recognized under section 406 of the Companies act, 2013. They are regulated by Ministry of Corporate Affairs. Reserve Bank of India is empowered to issue directions to them in matters relating to their deposit acceptance activities. Their core business is borrowing and lending money between their members. They are also known as Permanent Fund, Benefit Funds, Mutual Benefit Funds and Mutual Benefit Company. Nidhi means a company which has been incorporated with the object of developing the habit of thrift and reserve funds amongst its members and also receiving deposits and lending to its members only for their mutual benefit.

• Section 8 Company: When a person or an association of persons proposed to be registered under this Act as a limited company, having object of the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object and intends to apply its profits or other incomes in promoting its object and intend to prohibit to make any payment of dividend to its members.

How we help ?

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We here at Mukul Dusad and Associate understand the requirement of the business and our professional guide you to take the right decision for the structure of business.

To get your entity registered form us kindly fill the below form and one of our executives will contact you and guide you more about the type of entity you want to get registered.