Type of Companies Structure and It's Registration In India

7 Different types of Company Structures In India

Online Legal India LogoBy Online Legal India Published On 26 May 2022 Category Company Registration

Introduction

There are various company structures from which to pick if you want to start a business. The taxes you must pay, the compliance procedures you must take, and the eligibility requirements you must fulfill are all determined by the organisational structure you chose. As a result, determining what forms of company structure to conduct in India is one of the most important decisions an entrepreneur can make.

 

7 Different types of Company Structures In India

The main method through which business owners form or incorporate their business is through company registration. Because India has so many various types of businesses, entrepreneurs must select one that best suits their operations. The Companies Act of 2013 in India enables seven distinct business structures:

 

  1. Private Limited Company
  2. Public Limited Company
  3. Nidhi Company
  4. Limited Liability Partnerships
  5. Producer Company
  6. One Person Company
  7. Section 8 Company (NGO)

 

Private Limited Company

One of the primary structures of different company structures in India is a private limited company. Private limited corporations are ideal for enterprises that require private entity registration. To safeguard their own assets, a group of shareholders divides the liability among themselves in this form of business. Furthermore, the members' personal and corporate assets are treated separately, providing them greater safety and security. A company's shares cannot be traded or transferred publicly.

 

As per the Companies Act, 2013 the below-mentioned criteria must be fulfilled:-

 

  • Minimum of 2 and maximum of 15 directors, (However one may exceed the limit of 15, after passing a Special Resolution in the general meeting.)
  • One of the directors needs to be an Indian citizen
  • Minimum of 2 and maximum of 200 shareholders or members
  • Must possess at least one registered office address in India

 

Public Limited Company

A public limited corporation is one in which members of the general public can buy shares. There is no limit to shares that can be offered or traded in such businesses. Because the company's shares are publicly listed, they may be freely exchanged, making the shareholders part-owners. Before beginning commercial activities, such businesses must get a certificate of registration with the RoC. 

As per the Companies Act, 2013 certain criteria are required for a public limited company:-

 

  • Minimum 3 directors
  • At least one of the directors must be a citizen of India
  • Minimum 7 shareholders 
  • Must have one registered office address in India

 

Limited Liability Partnership

The limited liability partnership, or LLP, is a relatively new corporate entity in India. It has its own legal character, allowing the entrepreneurs to segregate between personal and company assets while also providing limited liability protection. The liability of each partner in an LLP is determined by the number of shares in the company.

 

The following requirements must be completed in order to form an LLP:

 

  • Minimum authorised capital of one lakh rupees
  • One of the authorised partners must be a citizen of India.
  • A minimum of 2 partners is required, with no limit on the total number.
  • If the remainder of the partners is corporations, at least 1 individual partner is required. 

 

One-Person Company

OPC is the newest addition to the several forms of company registration available in India, and it is ideal for small firms. It is the greatest choice for entrepreneurs who want to manage their own firm. Entrepreneurs benefit from liability protection without needing to associate with anybody else because the OPC has its own legal standing.

An OPC is simple to implement and regulate since it only requires one person. It is essentially a hybrid of the sole proprietorship and the private limited company business entity models.

To become an OPC, you must meet the following requirements:

 

  • A minimum of 1 lakh in authorised capital is required.
  • A naturalised Indian citizen and resident is required.
  • During the incorporation process, the promoter must name a candidate.
  • Financial businesses are unable to form an OPC.

 

Section 8 Company (NGO)

Section 8 corporations, sometimes known as non-profit organisations, work for philanthropic objectives. The goal is to promote the arts, science, literature, education, charitable giving, and environmental protection. Furthermore, any earnings earned by them are spent to fulfil these goals, and the members do not get dividends.

Requirements that need to be fulfilled for registering as a Section 8 Company are:

 

  • A minimum of two shareholders are required.
  • A minimum of two directors is required, and they may also be stockholders. At least 1 of the directors must be an Indian citizen.
  • There are no capital requirements.
  • A registered office address in India is required.

 

Nidhi Company

Nidhi Companies are classified as non-banking financial companies. A Nidhi Company's registration permits it to borrow from and lend to its members.

Nidhi Companies, which are located in India, were established to encourage members to practise thrift and save money. The cash that a Nidhi Company receives comes solely from its members.

As a result, registering the Nidhi Company is simple. Nidhi Limited should be at the end of the name since they are registered as Public Companies.

It's also important to note that the Nidhi Companies are regulated by the Reserve Bank of India.

 

Producer Company

A producer company is a company which primarily deals in Agricultural activities. Ten or more individuals each of them being producers may come together to form a producer company. The main activities in which a producer company deals are enlisted below:

 

  • Procurement
  • Production
  • Harvesting
  • Grading
  • Pooling
  • Handling
  • Export, 
  • Marketing 
  • Selling

 

Conclusion

 

It is important to know everything about the company registration and the main 7 company structures in India. Online legal India provides you with the best company registration services under the supervision of experts. 

Our team provides you with the proper guidance and helps you through the entire process. They also give you the details of the seven main company structures in India. So that you can choose the right one for your company.

 


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