Know 6 Different Company Formation Services

July 12, 2016

Know 6 Different Company Formation Services

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In India when we thinking about to Starting a Business then always question comes in our mind that is about legal entity, or license or formalities or documentation part.

The process of Company Formation in India proves to be a chore if you lack the best consultants on your team. With the help of specialized team of corporate economic advisors, chartered accountants, tax consultants are fully equipped to aid you not just with the company registration in India/ Incorporation of company in India, but also with a wide array of financial and accounting services.

This will ensure both a smooth start and hassle-free functioning for your company. Your business will benefit from the experience in online accounting, corporate finance issues and matters related to foreign investments along with much more.

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Let’s Understand about Company Formation in Simplified and User Friendly Language:

Legal Entities Option for the Company Formation Registration in India- The following types of Business entitles are available in India:

  • Private Limited Company
  • Public Limited Company
  • Partnership
  • One person company registration
  • Limited liability partnership
  • Sole Proprietorship

In addition to the above legal entities, the following types of entities are available for foreign investors/foreign companies doing business in India:

  • Liaison Office
  • Representative Office
  • Project Office
  • Branch Office
  • Wholly owned Subsidiary Company
  • Joint Venture Company

 

private company icon     What is Private Limited Company?

A Private Limited Company is a Company limited by shares in which there can be maximum 200 shareholders, no invitation can be made to the public for subscription of shares or debentures, cannot make or accept deposits from Public and there are restriction on the transfer of shares. The minimum number of shareholders is 2.

  public limited comp   What is Public Limited Company?

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 7.

sole proprietorship    What is Sole Proprietorship?

A sole proprietorship is a business that is owned and managed by a single person. You could have one up and running within 15 days, which makes it very popular among the unorganized sector, particularly small traders and merchants.

There is no such thing as registration; proprietorships are recognized by other registrations, such as a service tax registration or sales tax registration. As you would imagine with a business that’s so easy to set up, though, its shortcomings are severe: the liability of the proprietor is unlimited and it does not have a continuous existence.

 

llp icon   What is LLP? 

Limited Liability Partnership (LLP), introduced only in 2008, has quickly become a popular legal structure for businesses. Its main improvement over the General Partnership is that, as the name indicates, it limits the liabilities of its partners to their contributions to the business and also offers each partner protection from the negligence, misdeeds or incompetence of the other partners.

The LLP is also cheaper to incorporate than a private limited company, requires fewer compliances and can be a smart choice from a tax perspective.

 

partnership icon    What is Partnership?

A partnership is a business structure in which two or more individuals manage and operate a business in accordance with the terms and objectives set out in the Partnership Deed. This structure is thought to have lost its relevance since the introduction of the Limited Liability Partnership (LLP) because its partners have unlimited liability, which means they are personally liable for the debts of the business.

However, low costs, ease of setting up and minimal compliance requirements make it a sensible option for some, such as home businesses that are unlikely to take on any debt. Registration is optional for partnerships.

 

one comp registrationWhat is One Person Company registration?

The One Person Company (OPC) was recently introduced as a strong improvement over the sole proprietorship. It gives a single promoter full control over the company while limiting his/her liability to contributions to the business. This person will be the only director and shareholder there is a nominee director, but with no power until the original director is incapable of entering into contract.

So there’s no chance of raising equity funding or offering employee stock options. Furthermore, if an OPC hits an average three-year turnover of over Rs. 2 crore or has a paid-up capital of over Rs. 50 lakh, it must be turned into a private limited company or public limited company within six months.

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Documents required for Company Formation Registration Process:

  • Scanned copy of PAN Card or Passport (Foreign Nationals & NRIs)
  • Scanned copy of Voter’s ID/Passport/Driver’s License Scanned copy of Latest Bank Statement/Telephone or Mobile Bill/Electricity or Gas Bill
  • Scanned copy of notarized rental agreement in English
  • Scanned passport sized photographs
  • Scanned copy of no-objection certificate from property owner
  • Scanned copy of Sales deed/Property deed in English
  • Specimen signature 
  • Scanned passport-sized photograph Specimen signature (blank document with signature [directors only])

Any one of the directors must self-attest the first three documents. In case of foreign nationals and NRIs, all the documents must be notarized if currently in India or a non-Commonwealth country, or apostilled.

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How long does the registration for the company formation procedure takes?

The formation of the above Entity in India takes Approximate 12-15 Days after receipt of all the necessary Documents, The breakup of the number of the days is as follows:

registration for comp formation

Formation Cost involved in the formation of the Above Company?
The Cost of formation of Private limited depends on the Authorized Capital of the Company; Following is the breakup of Cost for the formation of the company with the minimum required authorized capital of INR 1 Lac.
 
 registration for comp formation

 

Can another company be sole share holder & director of a Private Limited Company?
As per the Basic requirement for the Company Formation we need minimum 2 Shareholders and 2 Directors hence need minimum 2 shareholders and directors. In order to fulfill your requirement  they can form company by giving just one share to the second shareholders.
 
The second shareholder will hold the shares on behalf of the company itself hence the ownership will be 100% with the company. In respect of the directorship, it need minimum two individual name to be acting as directors of the company.
 
Do I need to be physically present during this process?
No, new company formation registration is a fully online process. As all documents are filed electronically, you would not need to be physically present at all. You would need to send us scanned copies of all the required documents & forms.
 
Can I start business immediately after submission of all the documents?
No. One can start the business operations only after the receipts of certificate of incorporation in case of private limited company and only after the receipt of certificate of commencement of business in case of a public company.
 
Can I introduce a foreign national as a director? What are the legal aspects involved, documents required?
Yes, A foreign national can become a director of a company  registered  in India provided he/she has to apply for Director Identification Number from the Government of India.
 
Can I just register it now and start functioning business after 1 0r 2 years?
Yes, you can register a private limited company now and start functioning after 1 or 2 years. But as the company is registered under the Companies Act 1956 you will need to comply with the provisions of the Companies Act. It means you have to get balance sheet and profit and loss account prepared from the chartered accountant and the 1st annual general meeting  shall be held in the first financial year & the subsequent meetings for the next year.

Which legal entity is going to be the best for what you require?

The most suitable form of entity for carrying out business in India with the long term objective would be to form a private limited company, by making investment through equity shares in the company. The basic requirements are:

  • Minimum 2 directors of the company
  • Minimum 2 shareholders of the company
  • Minimum capital of the company should be INR. 100000/-

Can I register a Company anywhere In India?
Yes, You can register a Company anywhere in India.

Formation of the Company can take place in  3 simple steps:

  • Apply for DIN and DSC.
  • Apply for Name
  • File Incorporation Forms.

What is DIN?
Director Identification Number (DIN) is a unique identification number for an existing director or a person intending to become the Director of a company. DIN is a Mandatory for appointing a Director in the Company.

What is Digital Signature?
Digital Signature is the electronic signature of a person that will be used in the filling the forms with ROC.

How many People required starting a Company?
In case of Private Limited Company it is 2 and In case of Public Limited Company it is 7.
Public Limited Company – Rs.5,00,000/-

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cyo

Image source: vakilsearch.com

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SME Joinup come to work every day to help startup entrepreneurs realize their dream. We will help you take your first step in becoming an entrepreneur. We have top legal solutions service providers starting from company registration, accounting, preparing legal documents, business connections, trademark, advisory services, thereby providing end to end solutions in the life cycle of a business venture.

Are you aware of the Company definition in India, if not, we can help you with all the information you need. Count on us to know how company defined in India, so that you can make the right moves to run your organization after knowing company definition India…  

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