To start a business in India, you have to select one from five kinds of legal entities. These include –
- Private Limited Company
- Public Limited Company
- Partnership Firm
- Sole Proprietorship
- Limited Liability Partnership
Foreign companies set up a representative office called Liaison office to understand business and investment circumstances. Overseas companies, who have their manufacturing activities in their home country, can set up their branch office in India for consultancy or export and import of merchandise. They are even allowed to set temporary Project office in India. Foreign investment is approved in wholly-owned subsidiary company as well as Joint Venture Company.
Private versus Public Limited Companies
In Pvt. Limited companies there are minimum two and maximum 50 members. No public subscription is encouraged. Shareholders cannot transfer their shares.
In Public Limited Company there are minimum 7 and maximum limitless members. They request contribution from public. Shareholders can transfer their shares.
Which Business Enterprise is Appropriate?
The preference of company formation in India mainly depends on individual situations. Private Ltd Company has minimal agreement constrictions in comparison. However in such companies you have to raise your capital with the help of limited number of shareholders. On the other hand Public limited companies can raise their capital through public issue but the proprietorship is anticipated to be owned strictly by limited number of people.
In India every year many new companies get registered and majority of them are developing rapidly. Many professionals join hands to start a new company with very low capital and with minimum amount of liability. Most of the decision powers remain in the hands of working partner and all of them have individual expertise in certain special field to run their business successfully.
How to Register a Company in India?
All companies are registered under the Company Act 2013. Once the company is registered under this act they have to follow certain rules and regulations. They need to appoint an auditor, who will check their financial record. In addition, maintain the business accounts as per the prescribed company rules.
The company should also organize general meeting annually which is known as AGM. In this meeting, the details about profit and loss, new projects and everything related to the company must be shared with the shareholders. If any business organization wants to run their business in legitimate manner then, it is compulsory to register the company under the above mentioned act.
Online Business in India
Nowadays, due to internet revolution plenty of online businesses are also getting launched in India. The process of online business registration is also relatively simple, convenient and transparent. You can find plenty of consultants, who can help you through the online registration process.
There are lots of highly experienced CA/CS and lawyers available, who can provide you the necessary services at very affordable cost. In case, you experience any kind of problem in the registration process then, seek their help to resolve your issues. If you are interested to administer a company in smart and efficient manner then, it is certainly a good idea to start an online business.