Incorporation is the formation of a new corporation/ company (a corporation being a legal entity that is effectively recognized as a person under the law). The corporation may be a business, a non-profit organization, a startup, a micro small or medium scale business.MCA regulates corporate affairs in India through the Companies Act, 1956, 2013 and other allied Acts, Bills and Rules. MCA also protects investors and offers many important services to stakeholders. The Ministry is primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008 & other allied Acts and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector in accordance with law.
Let’s try and understand the types of business structures available in India. Here is a list of some of them:
You can choose what business structure suits your business needs best and accordingly register your business.
Here is a comparative list of the popular business structures in India.
| Company type | Ideal for | Tax advantages | Legal compliances |
|---|---|---|---|
| Limited Liability Partnership | Service-oriented businesses or businesses that have low investment needs | Benefit on depreciation | Business tax returns to be filed ROC returns to be filed |
| One Person Company | Sole owners looking to limit their liability | Tax holiday for first 3 years under Startup India Higher benefits on depreciation No tax on dividend distribution | Business returns to be filed Limited ROC compliance |
| Private Limited Company | Businesses that have a high turnover | Tax holiday for first 3 years under Startup India Higher benefits on depreciation | Business tax returns to be filed ROC returns to be filed An audit is mandatory |
| Public Limited Company | Businesses with a high turnover | Tax exemptions under | Business tax returns to be filed. Mandatory Audits |
Other forms of business structures include Sole proprietorship, Hindu Undivided Family, and Partnership firms. Please bear in mind, these structures do not come under the ambit of company law.
In India, registration of private limited company cannot be done without proper proof of identity and proof of address. Proof of identification and address would be required for the incorporation of all the company’s directors and shareholders.
The organisation must have a registered office in India for online business registration in India. A recent copy of an energy bill or the property tax receipt or water bill must be sent to confirm admission to the registered office. In addition to the tenancy agreement, the maintenance bill or the sale deed or a letter from the landlord with his/her permission to use the office as the company’s registered office is accepted.
An identity and address proof of all the directors and the subscribers to the share capital must be submitted.
For more details about documents required for incorporating a private company, read our article on documents required for private limited company registration.
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