Company registration is the process of formally establishing a legal entity that can conduct business activities, enter into contracts, and pay taxes. The process typically involves selecting a business structure, choosing a unique name, submitting necessary documents and fees to the appropriate government agency, and obtaining the required licenses and permits.
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A Sole Proprietorship in India is a business owned and managed by a single individual. It is the simplest form of business with **no separate legal identity**, meaning the owner is personally responsible for all liabilities. There is **no mandatory registration**, but the business may require licenses like GST registration, MSME registration, or a trade license depending on operations. This type of business is easy to set up and ideal for small businesses, freelancers, and local traders. Examples include **small retail shops, freelancers, and consultants**.
A Partnership Firm in India is a business entity formed by two or more individuals who agree to share profits and losses as per a **Partnership Deed**. It is governed by the Indian Partnership Act, 1932. A partnership firm requires a minimum of two partners, with a maximum limit of 50 partners. Unlike companies, partners have **unlimited liability**, meaning they are personally responsible for business debts. Registration of a partnership firm is optional but recommended for legal benefits. It is commonly used by small and medium-sized businesses. Examples include **law firms, accounting firms, and family businesses**.
A Private Limited Company (Pvt. Ltd.) in India is a business entity registered under the Companies Act, 2013, that operates as a separate legal entity with limited liability. It requires a minimum of two directors and two shareholders, with a maximum limit of 200 shareholders. Unlike public companies, shares of a Pvt. Ltd. company cannot be freely traded or listed on stock exchanges. It offers limited liability protection to its owners and is preferred by startups and small businesses due to lower compliance requirements. Examples include Flipkart, Ola, and Paytm.
A Public Limited Company (PLC) in India is a corporate entity registered under the Companies Act, 2013, that can raise capital by offering shares to the public. It requires a minimum of three directors and seven shareholders, with no upper limit on shareholders. Shares of a PLC are freely transferable and can be listed on stock exchanges, regulated by SEBI. Shareholders have limited liability, meaning they are responsible only for the unpaid amount on their shares. PLCs must comply with strict regulatory requirements, including audits and annual filings. Examples include Reliance Industries, Infosys, and Tata Motors.
A Limited Liability Partnership (LLP) in India is a hybrid business structure that combines the features of a partnership firm and a company. It is governed by the Limited Liability Partnership Act, 2008. An LLP requires a minimum of two partners, with no upper limit. Unlike a traditional partnership, **partners have limited liability**, meaning their personal assets are not at risk for business debts. LLPs must be registered with the **Ministry of Corporate Affairs (MCA)** and follow compliance norms like annual filings. It is preferred by professionals and small businesses. Examples include **law firms, consulting firms, and startups**.