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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

 

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