Want to start a business in India, but confused which entity is suitable for you?
Let’s discuss some of the types of business entities in India
Entity Type | Brief Description |
|---|---|
Sole Proprietorship | A sole proprietorship is an unincorporated business owned and operated by one person. It is the simplest form of business entity in India and requires registration under State Shop and Establishment Act. The owner is personally liable for all the debts and obligations of the business. |
Partnership | A partnership is a business owned and operated by two or more people. In India, partnerships can be registered or unregistered. The registration of partnership is not mandatory for carrying out the business activity in India. |
Limited Liability Partnership (LLP) | An LLP is a hybrid form of partnership and corporation that provides limited liability protection to its partners. It requires registration with the Ministry of Corporate Affairs and is a popular choice for professional services firms. |
Private Limited Company (PLC) | A PLC is a separate legal entity from its shareholders and provides limited liability protection to its owners. It requires registration with the Ministry of Corporate Affairs and can have up to 200 shareholders. |
Public Limited Company (PUC) | A PUC is a company that is publicly traded on the stock exchange and can raise capital from the public. It requires registration with the Ministry of Corporate Affairs and has more regulatory requirements than a PLC. |
One Person Company (OPC) | An OPC is a new form of company introduced in India in 2013. It is similar to a PLC but can be owned and operated by a single person. It requires registration with the Ministry of Corporate Affairs. |
Cooperative Society | A cooperative society is a business owned and operated by its members who share the profits and decision-making. It is governed by the Cooperative Societies Act and requires registration with the Registrar of Cooperative Societies |
Disclaimer: This article is intended for educational and informational purpose only. It is recommended to seek the assistance of a Practising Company Secretary or consultant in India to choose the most appropriate type of entity for your business.
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