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From Proprietorship to Private Limited & LLP — step-by-step guidance, end-to-end support, and professional expertise
The one you should choose would vary depending upon your immediate as well as long-term goals. Some of the key questions one faces in the process are:
- No. of owners / Stakeholders
- Initial Investment
- Tax Rate on your profits
- Share in assets but more importantly liabilities that may arise in the future
- External Funding requirements
Each type of company has its own unique set of advantages and disadvantages. Each of them has a different set of compliances right from incorporation up to liquidation. We discuss each of them in a step-by-step manner.
Private Limited Company Registration
A Private Limited Company is a separate legal entity regulated by the Ministry of Corporate Affairs (MCA). Registering as a Private Limited Company provides entrepreneurs with a formal corporate structure and several strategic advantages:
Key Benefits:
- Limited Liability Protection
Shareholders’ personal assets remain secure—only company assets are at risk in the event of default. - Ease of Equity Transfer
Shares can be reassigned or sold with minimal procedural hurdles, facilitating ownership transfers. - Enhanced Fundraising Options
Lenders and investors prefer Private Limited entities, making debt and equity financing more accessible.
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Key Facts: Private Limited Company in India
A Private Limited Company operates under the Companies Act, 2013, offering a robust corporate framework for growing enterprises:
- Tax Efficiency: Company profits are taxed at a flat rate of 25%, with directors able to withdraw earnings as salary and shareholders receiving returns via dividends or buy-backs.
- Quick Incorporation: Complete incorporation in 10–15 days, subject to name approval and documentation.
- Ongoing Compliance: Mandatory Annual General Meetings, Board Meetings, appointment of statutory auditors, and timely annual filings ensure corporate governance and transparency.
- Dissolution Requirements: Voluntary winding up requires the company to be inactive for at least 2 years and settlement of all statutory dues, making dissolution a structured, multi-step process.
Ready to leverage the benefits of a Private Limited Company?
Contact our corporate advisory experts today to discuss your incorporation strategy and compliance roadmap!
Documents Required for Incorporating an LLP
- Minimum 2 Partners, No Limit on Maximum No
- Obtain DSC for 1 Partner
- Proof of Registered Address
- DIN for both Partners
- Consent from the Subscriber or Designated Partner
Key Advantages of LLP
- No Dividend Tax: Profits distributed to partners aren’t subject to additional tax at distribution (unlike dividends in companies), improving after-tax returns.
- Limited Liability Protection: Partners’ personal assets are secure—creditors can only claim against LLP assets.
- Lower Compliance Costs: Fewer mandatory filings and formalities than a Private Limited Company, reducing administrative burden.
- Operational Flexibility: Minimal restrictions on management structure or transfer of partnership rights
- No requirement for Board or General Meetings—greater flexibility in decision-making..
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One-Person Company Incorporation
A One Person Company (OPC) is a specialized form of private limited company under Section 2(62) of the Companies Act, 2013, designed for sole entrepreneurs who want the benefits of a corporate structure.
Ready to establish your One Person Company?
Book a consultation with our corporate advisory team for smooth, cost-effective OPC registration and ongoing compliance support.
Documents Required to Register a One-Person Company
- Minimum 1 shareholder, One Nominee(Nominee is a person who shall, in the event of the Death of member or his incapacity to enter into contract, become the member of OPC.
- Obtain DSC for 1 Partner
- Proof of Registered Address
- DIN for both Partners
Key Benefits OPC's
- Single Ownership with Limited Liability – As a separate legal entity, your personal assets are protected; creditors can only go after the company’s assets.
- Perpetual Succession – The business continues seamlessly even in the event of the member’s death or incapacity.
- Lower Compliance Burden – Compared to a Private Limited Company, OPC's have fewer board meetings and no requirement for multiple directors.
- Ease of Funding – While funding options are more limited, you can still raise capital through loans and equity from up to one nominee..
Partnerships Firm Registration
A Partnership Firm offers a straightforward, cost-effective structure for two or more entrepreneurs to start a business together. Regulated under the Indian Partnership Act, 1932, it combines the simplicity of partnership with clearly defined rights and obligations.
Documents Required to Register a Partnership
- Minimum 2 Partners and maximum 20 partners
- Partnership Deed with Profit/Loss sharing Details, Details of Business, Address of Business
- PAN of partnership firm
- Proof of Registered Office (utility bill or rent agreement)
More about a Partnership
- There can be a variation based upon the working and nonworking partners, partners who would draw profits and the one who would draw only remuneration or a combination of both.
- A partnership firm is a legal entity with unlimited liability. This means that the personal property of partners can be taken to repay the loans in case of default.
- Profits of partnership Firm is taxable at 30%. Partners do not pay taxes on firms profits.
Public Limited Company Registration
A Public Limited Company is a separate legal entity with limited liability, offering broader fundraising avenues than a Private Limited Company. While it shares core benefits—such as perpetual succession and creditor protection—the Public Limited structure enables capital raising from the general public under the Companies Act, 2013.
Key Requirements & Advantages
Minimum Stakeholders: 7 shareholders and 3 directors at incorporation.
Paid-Up Capital: Minimum ₹5 lakh (or higher, as prescribed) in paid-up equity capital.
Subsidiary Conversion: Any subsidiary of a Public Limited Company automatically assumes Public Limited status.
Public Fundraising: Can issue IPO, rights shares, and public debentures, enabling large-scale capital mobilization.
More about a Public Limited Company
A Public Limited Company in India operates under a rigorous compliance framework set out by the Companies Act, 2013. Compared to private limited companies, PLCs must adhere to stricter transparency, reporting, and governance norms—making them a preferred vehicle for large-scale capital raising.
Why Choose a Public Limited Company?
- Access to Public Equity: Issue shares, debentures, and right issues to the general public and institutional investors
- Stock Exchange Listing: Raise secondary capital by listing on recognized stock exchanges, enhancing visibility and liquidity.
- Limited Liability Protection: Shareholders’ liability is capped at their share capital contribution, safeguarding personal assets.
- Enhanced Credibility: Greater regulatory oversight and disclosure requirements build stakeholder trust.
By structuring your enterprise as a Public Limited Company, you unlock unparalleled fundraising potential and establish a governance framework that inspires investor confidence.
Sole Proprietorship Incorporation
A Sole Proprietorship is the simplest form of business ownership, managed and owned by a single individual. It’s ideal for small-scale entrepreneurs seeking a low-cost, flexible structure, though it comes with certain limitations.
Key Features & Considerations
- Unlimited Liability: Unlike incorporated entities, there’s no legal separation between you and the business—personal assets are exposed to business debts.
- Simple Setup: Registration requirements vary by state; often involves registering for a shop & establishment license, GST (if turnover exceeds threshold), Professional Tax, and any industry-specific permits.
- Private Records: Financial statements and accounts aren’t publicly filed, though you must maintain accurate books for tax and audit purposes.
- Regulatory Compliance: Governed by state-level laws (e.g., Shops & Establishment Act), Income-Tax Act for assessments, and GST/other indirect tax statutes as applicable.
Advantages:
- Full Control: You make all business decisions without approval from partners or shareholders.
- Minimal Formalities: No mandatory board meetings or annual filings with ROC.
- Cost-Effective: Lower setup and compliance costs compared to companies or LLPs.
Disadvantages:
- Liability Risk: Your personal wealth is at stake for business obligations.
- Funding Constraints: Difficult to raise large-scale capital or attract external investors.
- Succession Challenges: The business may cease upon your death or incapacity.
Discuss your business needs and compliance roadmap with our corporate advisory team—Book a consultation today to ensure a smooth, fully compliant setup.
Section 8 Company Incorporation in India
A Section 8 Company is a not-for-profit entity formed under the Companies Act, 2013, dedicated to promoting social welfare, education, research, environmental protection, and other charitable objectives.
Key Advantages:
- Legal Recognition & Trust: Governed by the Ministry of Corporate Affairs, Section 8 companies enjoy enhanced credibility with donors, grant-making institutions, and regulators.
- Tax Exemptions: Donations qualify for deductions under Sections 12A and 80G of the Income-tax Act 1961, maximizing your funding potential.
- Perpetual Succession & Separate Legal Identity: The company’s existence and liability are distinct from its members, ensuring continuity and asset protection.
Compliance & Governance
- Annual Filings: File Form AOC-4 (financial statements) and Form MGT-7 (annual return) with the ROC each year.
- Statutory Meetings: Hold an Annual General Meeting and maintain minutes of Board meetings.
- Regulatory Adherence: Comply with Income-tax, GST, FCRA (if foreign funding), and other sector-specific regulations.
- Dormancy & Striking Off: Failure to meet compliance deadlines may lead to disqualification or dormancy; timely filings keep your entity in active status.
Utilization of Surplus
All surplus or profits must be reinvested exclusively toward the company’s stated objectives—distribution to members or directors is strictly prohibited.
Ready to Launch Your Section 8 Company?Partner with our corporate advisory team for streamlined Section 8 licence application, incorporation, and ongoing compliance.
Comparison of Company Structures in India
Director and Nominee Director
7 (In Listed Co.)
Business or Profession-If income exceeds 2.5 lacs in any of preceding 3 years
Business-If Turnover exceed 2 crores
Types of Company Registration in India
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