If you wish to register your business in India, it is vital to have a thorough understanding of the various types of entity structures permitted by Indian legal framework.
There are several types of companies as per the definitions in the Companies Act. The types that are more popular with the entrepreneurs and the business community are (1) Private Limited Company (2) One-Person Company and (3) Public Limited Company.
A Private Limited Company can be registered with the Ministry of Corporate Affairs (MCA) with a minimum of 2 shareholders and 2 Directors. The ceiling on the number of shareholders is 200.
Directors of a private limited company: A private limited company needs at least 2 Directors. The number of directors for a private limited company is 15.
Resident status of directors of a private limited company: Every private company shall have at least one director who has stayed in India for a total period of 182 days during the financial year. Contact UBCS for guidance on registration of Private Limited Company.
The Registered Office of a private limited company need not necessarily be situated in a commercial space / building.
The Registered Office can be a residential place owned by one of the directors / shareholders or a rented / leased residential space - an NOC needs to be obtained from the landlord in these cases.
Shareholders’ liability is limited and their private assets are insulated from the liabilities of the limited company. The shares of a private limited company cannot be offered to the general public.
As per the latest amendments in the Companies Act, the Authorised Capital of a private limited company shall not be less than INR 1 lakh (INR 100 thousand); however, there is no minimum Paid- up Capital suggested in the Act for a private limited company.
One-Person Company (OPC) is 100% owned by a single shareholder. The sole-owner needs to be an Indian citizen and he should also be a resident of India. OPCs are governed by the Companies Act and must be registered with the MCA. Contact UBCS for guidance on registration of One-Person Company.
Shareholder’s liability is limited and his private assets are not at risk if the OPC fails to meet its ncial obligations.
An OPC must be converted to a Private Limited Company if the Annual Turnover exceeds INR 2.00 crores (INR 20 million) or the Paid-up Capital exceeds INR 50.00 lakhs (INR 5 million).
A Public Limited Company can be registered with Ministry of Corporate Affairs with a minimum of 7 shareholders and 3 Directors. There is no ceiling on the number of shareholders.
Directors of a public limited company: A public limited company needs to have at least 3 Directors. The maximum number of directors for a public company is 15.
Resident status of directors of a public limited company: Every public company shall have at least one director who has stayed in India for a total period of 182 days during the financial year. Contact UBCS for guidance on registration of Public Limited Company.
A public limited company structure offers limited liability protection to its shareholders. The shares of the public limited company can be traded on public platforms (Stock Exchanges).
Public limited companies are subject to stringent laws by regulatory agencies, including The Securities and Exchange Board of India (SEBI).
The Company shall file to the Registrar verification of its registered office in Form INC-22 within thirty (30) days from its date of incorporation. Thereafter, notice of every change in the situation of its registered office shall be filed with the Registrar within fifteen (15) days of the change.
The due date of filing Form INC-22 is thirty (30) days from the date of incorporation of the company. Filing of Form INC-22.
Private companies and public companies shall file Form INC-22 within the stipulated time - Contact UBCS for guidance.
Filing of Form ADT-1 is mandatory for all types of companies – private & public. It is the responsibility of the company (not the auditor’s) to file Form ADT-1.
The Company shall file Form ADT-01 to intimate the appointment / re-appointment of the auditor to the Registrar within fifteen (15) days from the Annual General Meeting (AGM) in which the auditor was appointed / re-appointed. Filing of Form ADT-1: Contact UBCS for guidance.
First Auditor Appointment: As per the Companies Act, a newly incorporated company in India shall appoint the first auditor within thirty (30) days from the date of incorporation. The Board of Directors appoints the first auditor in the initial Board meeting, which shall be held within thirty (30) days from the date of incorporation. The company shall file Form ADT-01 within fifteen (15) days from the date of the first Board meeting.
The list of documents to be prepared before filing Form ADT-01 are –
The Company shall file a declaration to the Registrar in Form INC-20A prior to the commencement of business or exercising borrowing powers. This declaration in Form INC-20A is filed by a director within 180 days from the date of incorporation verifying that every subscriber to the Memorandum of Articles has paid the value of the shares agreed to be him on the date of making such declaration.
The due date of filing Form INC-20A / the due date for filing commencement of business is 180 days from the date of incorporation of the company. Filing of Form INC-20A.
The Certificate of Commencement of Business needs to be obtained within 180 days from the date of incorporation. Penalty for non-compliance is high and both the company & its officers will be imposed fines in case of delay in filing Form INC-20A. Private companies and public companies shall file Form INC-22 within the stipulated time - Contact UBCS for guidance.
Contact UBCS for guidance in maintaining the Statutory Registers for your company.
A Limited Liability Partnership (LLP) is a special type of entity structure that has features of both ‘Partnership’ and ‘Company’ structures.
The partners of an LLP have limited liability, similar to the shareholders of a company. The LLP structure offers separate legal identity, that allows the LLP to do any legit business and enter into contracts like any limited company.
LLPs are getting increasingly popular among Indian entrepreneurs in various business segments as the LLP structure shield private assets of its partners from the LLP’s liabilities and have relatively straightforward regulatory requirements. The concept of LLP was introduced in India in the year 2008 and the LLPs are governed by the Limited Liability Partnership Act.
An LLP can be registered in India with a minimum of 2 designated partners; however, there is no ceiling on the maximum number of partners for an LLP.
One of the designated partners must have stayed in India for a total period of 182 days during the financial year.
Contact UBCS for guidance in registering an LLP in India.
Simple Partnership: Partnership Firm Registration in India: How to register a Partnership Firm in the State of Kerala?
A Partnership Agreement can be signed when two or more parties come together to operate a business and agrees to share the profits and losses from the business.
All Partnership Firms formed in India are governed by the Indian Partnership Act, 1932.
The minimum number of partners in a partnership firm is 2, and the maximum is 20.
A Partnership Firm comes into existence once the Partnership Agreement is signed by the partners. Partners can be individuals, partnership firms, other business structures.
Registration of Partnership in Kerala:
A Partnership Firm can be registered with the Department of Registrations, Government of Kerala by filing an application form in the prescribed format to the Registrar of Firms of the State.
Registration is optional for a partnership firm. As per the Indian Partnership Act, it is not mandatory to register a partnership firm.
A Partnership firm can obtain a PAN number and can thereafter open current accounts / business bank accounts with any bank. There are no specific requirements of capital for a Partnership Firm in India.
Contact UBCS to discuss more details about Audits, GST Compliance etc. for your partnership firm.
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