Types of Company Registrations in India

This blog explains the process of 7 types of company registrations in India viz, Public Limited Companies, Private Limited Companies, One Person Companies, Partnership Firms, Limited Liability Partnerships, Sole Proprietorships, and Section 8 Companies.

The latest data for company registrations from the Ministry of Corporate Affairs states that a total of 16,570 new companies registered in the month of September 2021, in India. This was an increase of ~ 24% from the previous month. Pertaining to the consistently sharp rise in registrations of new Indian businesses, this article aims to convey information about the types of registrations they can opt for.

Types Of Company Registrations In India

Companies in India can be categorized into various types on the basis of several parameters including the requirement for registration, the procedures for registration, the size of capital investment, and the liability of the owners. Companies that are mandatorily required to get registered in India must apply for their registrations in the manner prescribed by law. The eligibility, procedures, and costs for registering each type of company in India have been discussed below, along with the necessary documentation and details that are required to be furnished during registration.

Type 1: Public Limited Company Registration

Public Limited companies are businesses registered and incorporated as independent legal entities under the Companies Act, 2013. Such companies are owned by a group of shareholders with liabilities limited to their stakes in the company. The shares of public limited companies are easily transferable and tradeable in the stock exchange markets and are open for subscription by the general public as well. Here are the requirements to set up a Public Limited Company in India.

Minimum Requirements:

• Minimum 7 shareholders
• Minimum 3 Directors, at least one must be resident Indian 
• An ROC approved Name for the Company 
• DIN of all directors 
• DSC of all promoters
• Registered Office of the Company

Documents Required:

• Promoter’s Documents: Passport-size coloured photographs, PAN, Aadhar, Identity Proof, Address Proof 
• Registered Office Documents: Proof of Registered Office Address, No Objection Certificate from Office Premises owner
• Legal Documents: Memorandum of Association, Articles of Association

Stepwise Process:

• Acquire DSC and DIN of all Promoters 
• Visit the MCA Website, Login to your account, and access the SPICe Plus / INC 32 Form 
• File PART A of SPICE Plus for name approval of the Company to the ROC 
• Within 20 days of name approval, file PART B of SPICe Plus for company registration 
• Get Company Registration Certificate within 2 weeks

Type 2: Private Limited Company Registration

Private Limited Companies are companies registered under the Companies Act of 2013. These companies trade their shares in a private manner without listing them on the stock exchange markets. Also their shares cannot be subscribed by the general public. The liability of the shareholders in Private Limited Companies are limited to their unpaid subscribed capital only. Here are the requirements to set up a Private Limited Company in India:

Minimum Requirements:

• Minimum 2 shareholders
• Minimum 2 Directors, at least one must be Indian Resident Indian 
• An ROC approved Name for the Company 
• DIN of all directors 
• DSC of all promoters
• Registered Office of the Company

Documents Required:

• Promoter’s Documents: Passport-size coloured photographs, PAN, Aadhar, Identity Proof, Address Proof 
• Registered Office Documents: Proof of Registered Office Address, No Objection Certificate from Office Premises owner
• Legal Documents: Memorandum of Association, Articles of Association

Stepwise Process:

• Acquire DSC and DIN of all Promoters 
• Visit the MCA Website, Login to your account, and access the SPICe Plus / INC 32 Form 
• File PART A of SPICE Plus for name approval of the Company to the ROC 
• Within 20 days of name approval, file PART B of SPICe Plus for company registration 
• Get Company Registration Certificate within 2 weeks 

Type 3: One-person Company Registration

One Person Company is a single owner Private Limited Company registered under the Companies Act, 2013. The company has a single shareholder who is entitled to 100% ownership and 100% profit share of the company. However, since OPC is a Limited Company, the liability of the single shareholder is limited to the unpaid amount of subscribed capital only. The requirements to set up a One Person Company is quite similar to that of a Private Limited Company and are mentioned hereunder.

Minimum Requirements:

• One Shareholder who is an Indian Citizen
• At least One Director who is a Resident Indian 
• An ROC approved name for the company 
• A Registered Office for the company 
• DIN & DSC of all directors 
• One Nominee, to replace the shareholder in the event of permanent departure

Documents Required:

Stepwise Process:

• Acquire DSC and DIN of all Promoters 
• Visit the MCA Website, Login to your account, and access the SPICe Plus / INC 32 Form 
• File PART A of SPICE Plus for name approval of the OPC to the ROC 
• Within 20 days of name approval, file PART B of SPICe Plus for OPC registration 
• Get OPC Registration Certificate within 2 weeks.

Type 4: Section 8 Company Registration

Section 8 of the Companies Act, 2013 mentions provisions to establish limited companies as non-profit organizations, owned by an individual or associations of people. The primary objective of these companies shall be to promote arts, commerce, education, sports, science, research, social welfare, religion, charity, and environment conservation. All the income, donations, and grants that are pocketed by a section 8 Company, must be spent in the promotion of the objects mentioned above. The company can be incorporated and operated as a separate legal entity. Donors to the companies can avail of tax benefits under Sections 12A and 80G of the Income Tax Act.

A Section 8 Company can be incorporated either as a Private Limited Company or a Public Limited Company. So, the minimum requirements, documents and procedures for its incorporation is akin to the process of incorporating these companies. However, after the incorporation is completed, the company has to obtain a license from the Central Government to operate as a Section 8 Company.

Documents Required for Section 8 Company License from Central Government:

• Form INC-12
• e-MoA in Form INC 13
• e-AoA in Form INC 14
• Declaration forms 14 and 15
• Estimated income and expenditure for the next 3 years
• Approval/NOC from the concerned authority, the sectoral regulator in the Central or State Government
• Copy of Resolution passed by the board in a general meeting
• Financial statements, board reports and audit reports of past 1-2 years 
• Assets and liabilities statement of the company from the RoC.

Other Types of Business Registrations in India

Besides companies, there are other types of business structures which might be suitable for your startup based on its needs, objectives, funding and management. These include partnership structures like firms and LLPs, or single owner businesses like Sole Proprietorships. We have explained the key features and processes of all these kinds of business registrations, so that you can make an informed choice as an entrepreneur at the end of the day!

Type 5: Limited Liability Partnership Registration

A Limited Liability Partnership was introduced under the LLP Act of 2008 with the objective of overcoming all the flaws the old Partnership Firm structure had. It is a legally registered entity and operates with the identity of its own. Moreover, the partners in an LLP enjoy Limited or restricted liability as per their capital sharing ratio. Like any other Partnership business, the partners of an LLP mutually agree to certain terms and conditions before starting their business. All these terms and conditions are documented in a written agreement signed by the partners and stamped by a public notary. Here are the requirements to set up an LLP in India.

Minimum Requirements:

• Minimum 2 Partners 
• Minimum 2 Designated Partners, at least one must be Resident Indian 
• An ROC Approved Name for the LLP 
• A Registered Office 
• DPIN of all Designated Partners 
• DSC of all Partners  

Documents Required:

• Photographs, Proof of Identity and Address of all Partners
• PAN cards of all partners
• Passport of the partner, if he is a foreigner 
• Proof of address of the Registered Office
• No Objection Certificate from the owner of the Office property
• LLP Agreement, needs to be filed within 30 days after LLP Registration

Stepwise Process:

• Acquire DSC of all Partners and DPIN of all Designated Partners 
• Apply for name approval of the LLP in the RUN-LLP Form
• After the name gets approved, visit the MCA Website, login to your account and access the FiLLiP form for LLP registration
• Fill out the Registration Form, Upload all the documents and attach DSC of the authorized designated partner to submit the form. 
• Get LLP Registration Certificate within 2 weeks 
• Submit LLP Agreement to the ROC in Form 3 within 30 days from Registration

Type 6: Partnership Firm Registration 

Two or more people (maximum 20) associate to form a partnership firm and divide the income or profits earned according to a predetermined profit-sharing ratio. Partnership firms are registered under the Partnership Act 1932. However, registration for Partnership firms is optional according to the statute. Such firms may get established and commence operations after drafting and signing a partnership deed or agreement and getting it approved/stamped by the notary.

Nevertheless, acquiring Certificates of Registration or Incorporation are recommended for Partnership firms as the document is acceptable by a court of law and will enable firms to file cases against 3rd parties if needed. Registered firms can also create valid invoices, obtain tax registrations, claim tax deductions, file tax returns and enhance their credibility for customers, employees, and investors.

Minimum Requirements:

• Minimum 2 partners 
• A valid and available name for the Firm 
• A Registered Office 
• A Stamped and Notarised Partnership Deed signed by all partners

Documents Required:

Application Form-1 PAN Cards and ID proofs of all partners Address proofs of all partners Proof of address of the registered office If the property is rented, a stamped and notarised rental agreement No objection certificate from the owner of the registered office property Stamped and Notarized Partnership deed An affidavit declaring that all details mentioned in the application are true.

Stepwise Process:

The procedure, fees, and stamp duty charges for registration of partnership firms differ for different states where the firm is resident. An application for registration needs to be filed with the District Registrar, who serves as the Registrar of firms in the state along with the prescribed fees. The application form must be signed by all partners and certified by a gazetted officer, professionals like lawyers, or chartered accountants. You will receive a Certificate of Registration after the verification of your documents and application by the Registrar of firms.

Type 7: Sole Proprietorship Registration

Sole proprietorships are businesses owned, managed, and controlled by a single owner or proprietor. They are unregistered business entities, so they do not carry an identity of their own. They operate on the identity of their proprietors. The proprietor is entitled to 100% ownership and profits of the business. However, the liability of the proprietor is unlimited and his personal assets are at risk while paying off the dues of the business.

A Sole proprietorship lives and dies with the Proprietor meaning its existence cannot be extended beyond the life of the Proprietor. Proprietorships are not required to pay any taxes as a business entity up to Rs.2 lakhs of income, beyond which the proprietor is taxed on behalf of the business. However, beyond the income of Rs.10 lakhs, proprietorships can hardly avail of any tax benefits. Proprietorships can be opened by Indian citizens and NRIs. Also, there is no minimum capital requirement to begin a business as a proprietorship.

As mentioned earlier, there is no provision to register and incorporate a proprietorship business. However, proprietorships are recommended to acquire other registrations to establish their legal existence. These may include GST registration, MSME or Udyam Registration, Shops and Establishment Registration, and so on. The documents required to obtain these registrations or to open a bank account in the name of the Proprietorship are mentioned hereunder.

Documents Required:

• PAN card of the proprietor
• Proof of Identity of the proprietor
• Proof of Address of the place of business