Company Registration Rules and Regulations in India

Kaviya A

9 April 2024

9,071 3 mins read

In India, what laws and rules are required for company registration? In order to help you understand certain rules that must be followed during company registration, we shall discuss this in detail.

Here is a list of types and company formation in india rules and regulations that are followed:

Table of Contents

1.Individual Entrepreneurship

Listed below are rules and laws for sole Proprietorship or individual entrepreneurship

You own control over every aspect of the business that includes from the company’s marketing to finance decisions.
You no need not anyone’s approval from board members or partners to create vital business making choices like advertisements patterns.
File formation documents with the local or state government are not needed . This makes you free from paying a filing fee.
You can employ someone to manage your daily routine or business affairs.

You are no longer concerned about coming up with a firm name. To find a list of available firms, use the Vakilsearch company name generator.

2. PVT LTD Company (Private Limited Company)

To start your Private limited company at least two people is required and you may exceed to a maximum of 200 people.
If your company faces any loss , you are liable to sell assets of company for payment. Your personal or any individual resources or funds are not at risk.
A private limited company exists forever. Example , in case of insolvency, bankruptcy or death of any member , the company will not shut down.
Business requires you to keep a record of its members as an index.
The management of your business must be done by two directors.
This business requires a lowest capital of Rs 1 lakh or higher may vary from time to time.
Primary companies need not require any answer from the public.
You should Include “private limited” next to the company name.
You should issue a permanent address of your registered office.
Your business must acquire a digital signature certificate that should be available on all the documents by all the directors of your company.
During company incorporation, you will require support from professionals such as secretary, accountant etc.

3. Business Associate or Partnership Business

You don’t have to record your partnership firm in India except Maharashtra.
You can register at times if you want to register Example even after several years.
You must give permission to all your partners in fundamental matters such as admission of new partners, conversion of firm etc.
You have to share details of both profit and losses which are made in the business.
A “ business name “ must be made with mutual understanding and then create a partnership deed.
The partnership deed should be mentioned in a written note not by mouth.
You can develop your own terms and conditions on your partnership deed.

4. LLP – Limited Liability Partnership

You are not liable to pay debts from your personal assets.
No partner is responsible for another partner’s misbehave.
Only the director holds the rights to make decisions. Whereas shareholders have less rights compared to them.
LLPs exist forever, similar to private companies.
No restrictions in company ownership. one can join or leave the company.
Dividend distribution tax and minimum alternative tax do not apply.
Audit is not obligatory unless your turnover exceeds 40 lacs and common fund exceeds 25 lacs.

5. One Person Company

You must be a resident of India and Indian nationality.
Choose a nominee if death or incapacity to contract occur. Ensure the nominee should be of Indian nationality as well.
Must appoint one director. Director identification numbers (DINs) issued by the minister of corporate affairs (MCA) are required for all directors.
The one person company name consists of three parts, for example the name, activity, opc (private limited).
The company name should get approval from ROC (register of company).
At time of registration you can provide a temporary address. Whereas, after registration provide a permanent address.
Aim of the company should be legal and should not disturb the society.
You must keep a record of all the documents on line with the company registration.
A digital signature certificate is required for your business.. All the necessary documents must be authenticated by using the digital signature of the director.
You must need the help of certain professionals to make necessary declarations for the incorporation of OPC.
Your company has to be converted into a private company ,if the turnover of the company exceeds Rs 2 crores.

6. Section 8 Company

Do not target to make profits

The main aim must be charitable in nature.
No paid-up capital required.
All the individuals including you have limited liability.
You can start only if you have a central government license.
As your aim is charitable in nature, you will have certain exemption and tax benefits.
Section 8 allows firms to be members of the company apart from individuals and associates.

This page contains information regarding company registration rules and laws. Government acts may modify or add to these rules and laws. For more up-to-date information on these regulations as well as assistance with setting up your company, reach out to the experts at Vakilsearch.

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