Following are the most common types of company or firm registrations in India.
- Private Limited Company
- Public Limited
- One Person Company (OPC)
- Limited Liability Partnership (LLP)
- Partnership Firm
- Sole Proprietorship Firm
- Section 8 Company
1. Private Limited Company
Private Limited Company is the most popular type of corporate legal entity in India. It Has a restricted number of members and cannot offer its shares to the public.
Private Limited Company can be of three types.
a) Company limited by shares: This is the most generic form of a Private Limited Company. Here the liability of members is limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them.
b) Company limited by guarantee: It means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound-up.
c) Unlimited company: Unlimited company means a company not having any limit on the liability of its members.
2. Public Limited Company
In Public Limited Company shares can be traded publicly. The company requires minimum 3 directors and 7 shareholders. there is no limit on the number of shares.
3. One Person Company
One person company is newly introduced type of company in the companies Act, 2013. it was introduced to support entrepreneurs by allowing them to create a single person entity.
4. Limited Liability Partnership
Limited Liability Structured Company (LLP) is a separate legal entity from its founders, formed by at least two partners out of which one must be a Indian resident.
5. Partnership firm
In Partnership firm all business transactions and operations are handled by partners. The roles, responsibilities and number of shares for each partner are clearly defined in the legal partnership deed.
6. Sole Proprietorship firm
In Sole Proprietorship there is a single person who manages the entire business operation. The business and the owner are treated as one identity All income from the business are added to the owner’s account for taxation purpose. It does not require any complex rule or accounting.
7. Section 8 company
Section 8 Company is an organization which is registered as a Non-Profit Organization (NPO). It can be started by an objective to promote Arts, Commerce, Charity, Education, Protection of environment, Science, Social Welfare, Sports, Research & Religion. The income of the Company is to promote objects. The dividends cannot be paid to company members. Fraud objectives may lead to legal actions against all officers of the company.