HOW TO START A BUSINESS

Congratulations on your decision to start a small business. You can structure the business in one of the following three models

If you are doing it alone, it is

Sole Proprietorship

No need to get any registration of the business entity as such. Refer to other requirements at the end of this page.

If you are doing it along with one or more persons, it is either a

Partnership

OR

Limited Liability Partnership (LLP)

A minimum of two individuals can form a partnership whether be it under Partnership act 1932 or Limited Liability Partnership Act. The maximum number of partners cannot exceed 50 individuals as partners.

Partnership Under Indian Partnership Act 1932

Execute a Partnership Deed, relevant to your agreement among partners and Register the partnership agreement with the Registrar of firms.

LLP under Limited Liability Partnership Act 2008

Reserve a unique name on MCA LLP portal for your LLP

Execute a Limited Liability Partnership Agreement and register with concerned Registrar of Companies.

If you want to do business on a much larger scale with limited liability it is a

Limited Company

One Person Company

Private or Public Company Under the Companies Act,2013

One Person Company (OPC)

is a company that has only one person as a shareholder. The liability of the only shareholder of the company is Limited as in the case of other forms of companies. For all practical purposes OPC is treated as a Private Company. Some Provisions relating to Private companies, such as Notice of meetings, Quorum, Annual General Body Meeting etc. are not applicable to OPC.

Private Limited Company

Is a company that has a minimum of TWO shareholders and a maximum of 200 shareholders. The shareholders could be natural persons or companies, including foreign companies

Shareholders

Could be natural persons or companies, including foreign companies

A Public Limited Company

is a company that has a minimum of SEVEN shareholders

DIRECTORS
  1. Every “One Person Company” shall have a minimum of ONE Director

  2. Every Private Limited Company shall have a minimum of TWO Directors.

  3. Every Private Limited Company shall have a minimum of Three Directors.

* Maximum Number of Directors permitted in any company is 15.

THINGS TO DO:
  1. Finalize the names of directors as the case may be, and

  2. Obtain Director’s Identification Numbers.

  3. Search and Reserve a unique name with MCA Portal

  4. File Memorandum of Association and Articles of Association and obtain Incorporation certificate of the company.

  5. Further the following are to be fulfilled by every entity

  • Obtain a PAN number under section 139A of Income-tax Act, 1961

  • Obtain a TAN number under section 203A of Income-tax Act, 1961

  • You may need to obtain Registration Under Central Goods and Services Tax Act, 2017

  • Depending upon line of activity of your business, appropriate registrations, permissions and licenses as applicable

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