Everything You Need to Know
Starting a business is an exciting venture but before you start, you need to take care of certain formalities. One of the crucial steps is to register your company. In India, there are different types of company registrations like Pvt Limited Companies, LLP, OPC, FPO and others. In this article, we will discuss the various types of company registrations and the statutory compliances that follow.
Types of Company Registrations:
- Private Limited Company: A Pvt. Ltd. company is a type of company that is privately held for small businesses. It is registered under the Companies Act, 2013 and is governed by the Ministry of Corporate Affairs (MCA). The minimum number of members required to register a Pvt. Ltd. company is two and the maximum is 200. It has a separate legal identity from its shareholders and offers limited liability protection to its shareholders.
- Limited Liability Partnership (LLP): An LLP is a hybrid form of partnership and company registration that offers the benefits of both. It is registered under the LLP Act, 2008 and is governed by the Ministry of Corporate Affairs (MCA). It offers limited liability protection to its partners and is a separate legal entity. It requires a minimum of two partners to register and has no maximum limit.
- One Person Company (OPC): An OPC is a type of company registration that allows a single person to form a company. It is registered under the Companies Act, 2013 and is governed by the Ministry of Corporate Affairs (MCA). It offers limited liability protection to its shareholders and has a separate legal identity.
- Farmer Producer Organization (FPO): An FPO is a type of company registration that is meant for farmers. It is registered under the Companies Act, 2013 and is governed by the Ministry of Corporate Affairs (MCA). It aims to increase the income of farmers by helping them market their produce and by providing them with technical assistance.
Company registration in Goa
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Pvt Limited Company
Who Should Register a Private Limited Company?
If you’re thinking of starting a Pvt Ltd company read this as a check list before you decide.
- Plan to raise external funding: Private limited companies can attract investors more easily.
- Want to separate personal and business liabilities: This structure provides a shield for your personal assets.
- Need a formal business structure: A private limited company is ideal for established businesses or those aiming for growth.
- Seek credibility and trust: This legal entity is often seen as more professional and reliable.
- What to Expect After Registration:
- Compliance requirements: You’ll need to adhere to various legal and regulatory obligations, including annual returns, audits, and board meetings.
- Tax implications: Your company will be subject to corporate income tax.
- Note: While a private limited company offers several benefits, it’s essential to consider the specific needs and goals of your business before making a decision. Consulting with our professionals can provide tailored advice.
LLP registration
Who Should Register a Limited Liability Partnership (LLP)?
If you are thinking of registering a company, you must read this, as LLP is easy to maintain with less post registration compliances
- Want a flexible structure: LLPs offer more flexibility in terms of management and profit sharing than private limited companies.
- Need to limit personal liability: Like private limited companies, LLPs protect your personal assets from business debts.
- Are starting a partnership: LLPs are ideal for partnerships where each partner wants to maintain their individual identity.
- Plan to involve professionals: LLPs are popular among professionals like accountants, lawyers, and architects.
- What to Expect After Registration:
- Compliance requirements: LLPs have fewer compliance burdens compared to private limited companies.
- Tax implications: LLPs are taxed as partnerships, which can offer tax benefits in certain cases.
- Advantages of LLP Over Private Limited Company:
- Fewer compliances: LLPs have fewer statutory requirements, such as annual returns and audits.
- Flexible profit sharing: Partners can agree on any profit-sharing ratio based on their contribution.
- Easier dissolution: Dissolving an LLP is generally easier than dissolving a private limited company.
- Note: While LLPs offer several advantages, it’s essential to consider the specific needs and goals of your business before making a decision. Consulting with our professionals can provide tailored advice.
OPC and Partnership registrations
We support you to register OPC and Partnership firms too.
- One Person Company (OPC)
- Single owner: Owned and managed by a single individual.
- Limited liability: Protects the owner’s personal assets.
- Minimum capital requirement: Requires a minimum paid-up capital of ₹1 lakh.
- Conversion: Can be converted into a private limited company or a public limited company.
Partnership Firm
- Multiple owners: Owned and managed by two or more individuals.
- Unlimited liability: Partners are personally liable for the firm’s debts.
- No minimum capital requirement: No specific capital requirement is mandated.
- Partnership deed: Requires a written partnership deed outlining the terms and conditions of the partnership.
- Incase of two partners, the partnership firm gets dissolved if one of the partner leaves the firm. That is why LLP is a good alternative, where the firm still continues to exist.
Statutory Compliances:
Once you have registered your company, you need to comply with various statutory requirements. Here are some of the important compliances:
- Income Tax Returns: Every company registered in India is required to file an Income Tax Return (ITR) every year. The due date for filing ITR for companies is 30th September of the assessment year.
- Goods and Services Tax (GST) Returns: If your company is registered under the GST Act, you need to file GST returns on a monthly, quarterly or annual basis depending on the turnover of your company.
- Annual Compliance: Every company needs to comply with certain annual compliances like filing of annual returns, conducting annual general meetings (AGMs), and appointment of auditors.
- Other Compliances: Apart from the above-mentioned compliances, there are other compliances like TDS returns, PF and ESI compliances, and filing of various forms with the Registrar of Companies.
Conclusion
Company registration is the first step towards starting a business in India. It is important to choose the right type of company registration based on your business needs. Once you have registered your company, you need to comply with various statutory requirements. To ensure that you comply with all the legal requirements, it is advisable to seek professional help from a chartered accountant or a company secretary.