Different Types of Business Established in India
Introduction
To establish a business in India, adherence to a set of fundamental requirements is imperative, ensuring legal compliance and operational integrity. Essentials include selecting directors and shareholders, issuing a prospectus when needed, and following corporate compliance procedures. These prerequisites form the foundational pillars upon which a company’s structure and operations are built.
Kindly refer to the chart provided for enhanced clarity and understanding-
Particulars | Private Company | Public Company | One Person Company (OPC) | Limited Liability Partnership (LLP) |
Minimum Members | 2 | 7 | 1 | 2 Partners |
Maximum Members | 200 | Unlimited | 1 | No Limit |
Minimum Directors | 2 | 3 | 1 | 2 Designated Partner |
Maximum Directors | 15 | 15 | 15 | NA |
Resident Directors | 1 Mandatory | 1 Mandatory | 1 Mandatory | 1 Designated Partner |
Transfer of Ownership | Ownership can be transferred | Ownership can be transferred | Ownership can be transferred to the nominee in the event of the death of the owner | Ownership can be tra2nsferred |
Subscription of shares | Public subscription is not allowed | Public subscription allowed | Public subscription is not allowed | Public subscription is not allowed |
Issue of Prospectus | Not Mandatory | Mandatory | Not Mandatory | Not Mandatory |
Managerial Remuneration | No limit to the managerial personnel | Shareholders’ approval is required if remuneration payable is above limits | NA | Remuneration is based on the LLP agreement |
Commencement of business/ operations | Declaration to be filed prior to commencement | Declaration to be filed prior to commencement | Declaration to be filed prior to commencement | Immediately after obtaining a certificate of incorporation |
Legal Status | A private Company is a separate legal entity registered under the Companies Act, 2013. The Directors are liable for the default made under the act | A Public Company is a separate legal entity registered under the Companies Act, 2013. The Directors are liable for the default made under the act | OPC is a separate legal entity registered under the Companies Act, 2013. The Directors are liable for the default made under the act. | LLP is a separate legal entity registered under the Limited Liability Partnership Act, 2008. The Designated Partners of LLP are liable for the contraventions under the act |
Governing Act/ Law | Companies Act, 2013 | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 |
Annual Statutory Filings | Annual statement of accounts and annual returns with Registrar of Company (ROC) | Annual statement of accounts and annual returns with ROC | Annual statement of accounts and annual returns with ROC | Annual statement of insolvency and annual returns with ROC |
Annual Filings and Audit | Information Technology (IT) returns to be filed. Audit mandatory | IT returns to be filed. Audit mandatory | IT returns to be filed. Audit mandatory | IT returns to be filed. Audit mandatory in case turnover exceeds INR 40 lakhs or contributions exceed INR 25 lakhs |
How we can help?
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