The document discusses company registration in India and choosing the appropriate business structure. It describes the main types of business structures in India, including one person companies, limited liability partnerships, private limited companies, and public limited companies. It provides guidance on important factors to consider when selecting a business structure, such as the number of owners, initial investment costs, liability, tax rates, and plans for obtaining investors. Finally, it outlines the four-step process for registering a company in India, which involves obtaining a digital signature certificate, director identification number, registering on the MCA portal, and receiving a certificate of incorporation.

1. ENTREPRENEURSHIP DEVELOPMENT – KMB 402
Topic: Registration of Business Units
(Part 1 of 2)
ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

2. Abbreviation Under Companies Act
ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

3. ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

4. Company Registration in India
Picking the right company structure for the business is as important as
any other business-related activity. The right business structure will
allow the enterprise to operate efficiently and meet the required
business targets.
In India, every business must register themselves as part of the
mandatory legal compliance. Before coming to terms with how to
register a company, once again refer to the types of business structures
in India.
ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

5. The Different Types of Business Structures in India
1. One Person Company (OPC): Recently introduced in the year 2013, an
OPC is the best way to start a company if there exists only one promoter or
owner. It enables a sole-proprietor to carry on his work and still be part of
the corporate framework.
2. Limited Liability Partnership (LLP): A separate legal entity, in an LLP the
liabilities of partners are only limited only to their agreed contribution.
3. Private Limited Company (PLC) : A company in the eyes of the law is
regarded as a separate legal entity from its founders It has shareholders
(stakeholders) and directors (company officers). Each individual is regarded
as an employee of the company.
4. Public Limited Company (PLC) : A PLC is a voluntary association of
members which is incorporated under company law. It has a separate legal
existence and the liability of its members are limited to shares they hold.
One can choose what business structure suits the business needs best and
accordingly register business.
ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

6. ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

7. How to Choose a Business Structure While
Applying for Company Registration
Let’s take a look at some important questions every entrepreneur must ask himself
before he/she finally decide upon a business structure.
i. How many owners/partners will your business have?
If you are a single person who owns the entire initial investment required for the
business, a One Person Company would be ideal for you. On the other hand, if
your business has two or more owners and is actively seeking investment from
other parties a Limited Liability Partnership (LLP) or Private Limited Company would
suit you best.
ii. Should your initial investment determine your choice of business structure?
The answer to that question is – Yes if you want to spend less initially, it would be
wise to go in for a Sole Proprietor, or a HUF or a Partnership. But, if you are sure
that you will be able to recover the setup and compliance costs, you can opt for a
One Person Company, LLP or a Private Limited Company
ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

8. iii. Willingness to bear the entire liability of the business
Business structures like sole proprietor and partnership firm have unlimited
liability. This means, in case of any default in loans, the entire money will be
recovered from the members or partners in profit sharing ratio. The risk to personal
assets is high in these cases.
Whereas, Companies and LLPs have a limited liability clause. This means that the
liability of its members is restricted to the amount of contribution made by them or
the value of shares each member holds.
iv. Income Tax Rates Applicable to businesses
The income tax rates applicable to a sole proprietorship are the normal slab rates.
In case of a sole proprietorship, the business income is clubbed with the
individual’s other income.
But in the case of other entities like partnership and company a tax rate of 30% is
applicable.
v. Plans of getting money from investors
It is very difficult to get investments when your business structure is unregistered.
Entities like LLP and Private Limited Company are trusted when it comes to
investment. Make sure you choose the right structure, seek the help of an expert so
that you register under proper guidance.
ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW

9. How to Register a Company in India?
• Registering a company in India is now a simple 4-step process. Here is
what are needed to be acquired:
i. A Digital Signature Certificate(DSC)
ii. A Director Identification Number (DIN)
iii. Registration on the MCA (Ministry of corporate Affairs) Portal or
New user registration
iv. Certificate of Incorporation
With this, we have covered the basics of how
to register a company.
ACHLA TYAGI, ABES EC (032), AKTU, LUCKNOW