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This helps one to understand why it is important to register a company and what are the procedures for the same.
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Overview of company A company is basically a business entity which delivers goods or services which has to be recognized. A company can become a legal entity after registration. There are number of company structures such as, • Private Limited Company • Public Limited Company • Limited Liability Partnership • One Person Company • Section 8 (Section 25 company)
Private Limited Company Private limited company is a firm which is generally formed by two people or more. The maximum can be 100.Accordingly there can be 200 shareholders. The attributes of a private limited company are number of members, limited liability, perpetual succession, index of members, paid up capital, number of directors, prospectus, minimum subscription and name.
Reasons to register a Private Limited Company Uninterrupted Existence APrivate limited companycan have a ‘perpetual succession’, which means an uninterrupted existence until it is legally dissolved. A company being an independent legal entity, is not affected by any death or other departure of any member and prolongs to be in existence despite of the changes in ownership. Separate Legal Entity A company is a legal entity and a juristic person entrenched under the Act. Therefore a company has a huge range of legal capacity like owning property and incurring debts. The members i.e Shareholders/Directors of a company does not have any personal liability to the creditors of the company for its debts.
Owning Property A company being an artificial person, can obtain, own and enjoy. The property owned by a company could be building, intangible assets, machinery, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company as long as the company is remunerative. Easy Transferability Ownership of a business can be easily transferable in a company by transferring shares. The procedure of share transfer and share certificates is sufficient to transfer the ownership of a company. In a private limited company, the consent of other shareholders maybe required for share transfers. Limited Liability Limited liability is the status of being legally responsible only to a certain extent of amount for debts of a company. In a private limited company the liability of the shareholders in concern to the company’s debts is limited to the equity invested by them in the company.
Requirements for private limited company registration: • A copy of PAN card. Submission of PAN card is mandatory during the incorporation process. The name written in the PAN card will be used as it is for everything that is related to the company.
A copy of address proof. The names present in this should match with that of in the PAN card. Utility bills such as telephone bill/electricity bill/water bill can be produced as a proof of evidence which should depict the address of the premise. • Identity and address proofs should be submitted by all shareholders. In case of one of the shareholders being a corporate entity then the incorporation document should be attached along with the resolution passed by the corporate for subscription of shares. • The company's registered office address should be valid. Within 30 days of incorporation or registration process all the proofs should be submitted. • A copy of rental agreement. NOC from landlord is required to be submitted in case of a rented office or an ownership document can be produced.
Public Limited Company A public limited company is one which is allowed to provide registered securities to the general public. The company's securities can be traded on a stock exchange and can be bought and sold by anyone. Public limited companies are strictly regulated and are suppose to disclose their complete and true financial position by law in order to determine the true worth of its shares. A public company should have a minimum of 7 members and the board of directors could range from 3 to 15.
Reasons to register a Public limited company Borrowing Capacity A company enjoys better access for borrowing of funds. It can issue bonds, secured as well as unsecured and can also accept deposits from the public, etc. Even banking and financial institutions prefer to render financial assistance to a company rather than partnership firms or proprietary concerns. Uninterrupted Existence A company can have a ‘perpetual succession’, which means an uninterrupted existence until it is legally dissolved. A company being an independent legal entity, is not affected by any death or other departure of any member and prolongs to be in existence despite of the changes in ownership.
Separate Legal Entity A company is a legal entity and a juristic person entrenched under the Act. Therefore a company has a huge range of legal capacity like owning property and incurring debts. The members i.e, Shareholders/Directors of a company does not have any personal liability to the creditors of the company for its debts. Owning Property A company being an artificial person, can obtain, own and enjoy. The property owned by a company could be building, intangible assets, machinery, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company as long as the company is remunerative. Easy Transferability Ownership of a business can be easily transferable in a company by transferring shares. The procedure of share transfer and share certificates is sufficient to transfer the ownership of a company. In a public limited company, the consent of other shareholders maybe required for share transfers.
Requirements of Public limited company registration: • Identity proof of all the shareholders and directors has to be submitted. • All the shareholders should produce their PAN card which is very mandatory for Indian nationals. • All the directors and the shareholders should produce their address proof. • A copy of rental agreement. NOC from landlord is required to be submitted in case of a rented office or an ownership document can be produced. • Memorandum of Association(MOA) • Articles of Association(AOA) • Utility bills such as telephone bill/electricity bill/water bill can be produced as a proof of evidence which should depict the address of the premise. • Director Identification Number (DIN). • Digital Signature Certificate (DSC).
Requirements of Public limited company registration • Identity proof of all the shareholders and directors has to be submitted. • All the shareholders should produce their PAN card which is very mandatory for Indian nationals. • All the directors and the shareholders should produce their address proof.
A copy of rental agreement. NOC from landlord is required to be submitted in case of a rented office or an ownership document can be produced. • Memorandum of Association(MOA) • Articles of Association(AOA) • Utility bills such as telephone bill/electricity bill/water bill can be produced as a proof of evidence which should depict the address of the premise. • Director Identification Number (DIN). • Digital Signature Certificate (DSC).
One Person Company A One Person Company is nothing but a combination of a company and sole proprietorship. A single person is sufficient to start a one person company. There is no requirement of any subscriber or director. It is a separate legal entity and the entrepreneur holds the complete authority.
Reasons to register a One Person Company Single Promoter One Person Company is the one and only type of corporate entity that can be started and operated by a single promoter with limited liability. It is a kind of encouragement for innovative start-ups. Uninterrupted Existence A company can have a ‘perpetual succession’, which means an uninterrupted existence until it is legally dissolved. A company being an independent legal entity, is not affected by any death or other departure of any member and prolongs to be in existence despite of the changes in ownership.
Separate Legal Entity A company is a legal entity and a juristic person entrenched under the Act. Therefore a company has a huge range of legal capacity like owning property and incurring debts. The members i.e, Shareholders/Directors of a company does not have any personal liability to the creditors of the company for its debts. Owning Property A company being an artificial person, can obtain, own and enjoy. The property owned by a company could be building, intangible assets, machinery, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company as long as the company is remunerative. Easy Transferability Ownership of a business can be easily transferable in a company by transferring shares. The procedure of share transfer and share certificates is sufficient to transfer the ownership of a company. In an One Person Company, the consent of other shareholders maybe required for share transfers.
Requirements of One Person Company registration • For Director/Shareholder and Nominee: • A copy of PAN card should be submitted mandatorily. • ID card is required. It could be driving license, voter ID, passport or Aadhaar card. • Utility bills such as telephone bill/electricity bill/water bill can be produced as a proof of evidence which should depict the address of the premise. • Passport-sized photographs. Documents related to registered office: • A copy of rental agreement. NOC from landlord is required to be submitted in case of a rented office or an ownership document can be produced.
Limited Liability Partnership LLP is the common type of business. An LLP is operated by an association of people co-ordinating and operating a single business unit. There are numerous benefits in an LLP which is what makes it preferable over other types. It is a decentralised structure of management where all the partners hold equal rights. Tax benefits and the limited liability are the two significant characteristics of LLP.
Reasons to register a Limited Liability Partnership Audit NOT Required A LLP with a turnover less than Rs. 40 lakhs and less than Rs.25 lakhs of capital contribution does not require any audit. So LLPs are the ideal option for startups and small businesses that are just starting their operations and want to have minimal regulatory compliance related formalities. Uninterrupted Existence A company can have a ‘perpetual succession’, which means an uninterrupted existence until it is legally dissolved. A company being an independent legal entity, is not affected by any death or other departure of any member and prolongs to be in existence despite of the changes in ownership.
Separate Legal Entity A company is a legal entity and a juristic person entrenched under the Act. Therefore a company has a huge range of legal capacity like owning property and incurring debts. The members i.e Shareholders/Directors of a company does not have any personal liability to the creditors of the company for its debts. Owning Property A company being an artificial person, can obtain, own and enjoy. The property owned by a company could be building, intangible assets, machinery, land, residential property, factory, etc., No shareholder can make a claim upon the property of the company as long as the company is remunerative. Easy Transferability Ownership of a business can be easily transferable in a company by transferring shares. The procedure of share transfer and share certificates is sufficient to transfer the ownership of a company. In an LLP, the consent of other shareholders maybe required for share transfers.
Requirements of Limited Partnership company registration Indian National as a partner of LLP: • PAN card copy of all the partners of need to be produced. • Address proof must be submitted by all the partners, the name must should match with that of in the PAN card. Utility bills such as telephone bill/electricity bill/water bill can be produced as a proof of evidence which should depict the address of the premise. • Residential proof also to be submitted along with the address proof. The documents acceptable are Bank statement, Electricity bill, telephone bill.
Foreign Nationals as partner: • If the partner is a foreign national, passport is mandatory. The document must be in English language only. The document required should be duly certified or attested or notarized. • Address proof documents such as Residence card, driving license, Government issued form of identity with address mentioned, and bank statement. The names in the passport and address proof should match. • Residence proof should be submitted along with this. . The names in the passport and address proof should match. The documents acceptable as are: Electricity bill, telephone bill, water bill, bank statement. Documents related to registered office: • A copy of rental agreement. NOC from landlord is required to be submitted in case of a rented office or an ownership document can be produced.
Section 8 Company Registration Section 8 is a non-profitable company established mainly for promotion of education, eradication of poverty and so on. One can choose any one of these options such as trust, societies and section-8 company to form a non-profitable organisation. In this type of firm profits would not be accessed by its members and the company should be responsible to ensure that the profits are utilized only for promoting its objectives. For any information regarding company registration visit out website https://earnlogic.in
