Start Up Business
Business Structure play Critical Role in setting & growth of business
In India, most of the business are started as individual without others participation. Such types of Business entity said as proprietorship firm. In such case the identity of person & entity are same.
- Low Tax Rate
- Mobility / Flexibility
- Less paperwork to get started.
- Fewer registration fees & Govt Regulatory.
- Easy Formation
- Fast decision
Registration may Required
- GST Registration
- UDYAM Registration
- Shop & Establishment Act Registration
- FFSSAI Registration (Foods Industries)
- Others Registration based on Industries
Most start-ups in recent times are evolving as partnership firms. Predominantly, the business types in India are either proprietorship firms or partnership firms. Partnership firms are the most common ones among the two. Partnership firms in India are led by the Indian Partnership Act, 1932.
In a partnership firm, the odds of having a successful business are high. The partners share their business ideas and complement each other’s weaknesses. On the other hand, as in any business, there are chances that it may not do well as intended. Or even worse, the firm may not do well merely because of one or more partners. Under these circumstances, differences may arise and might call for legal action. It is for this reason that it is preferable to have the firm registered.
Potential to sue the firm or sue the other partners:
Any conflict should arise between the partners or between the current and previous partners or even between one of the partners and the firm itself, and provided the conflict thus arising is out of the terms dictated in the partnership deed or the dispute is upon the rights vested on the partner by virtue of the Partnership Act, then a partner belonging to the firm in which the partnership is registered can always move to the Courts of Law.
The capacity of the firm to sue third parties:
In a registered partnership firm, one or more partners can always file a case in court when any of their contracts are not honoured. Partners of an unregistered firm are not given this lenience.
Right to use the principle of set-Off:
If the partnership firm is issued by another party to recover a sum the firm owes to this party, the firm can use the principle of set-off against this third party provided the latter also owes some amount of money to the partnership firm. The registered partnership firm can simply counterbalance the amount it owes to the third party.
Despite the fact that the Partnership act renders both a registered and unregistered firm legal, it is a, sure enough, case that a registered partnership firm looks more credible in the eyes of a potential client
Ability to convert into an entity:
A registered partnership firm always has the ease of converting itself to another corporate entity like that of a Limited Liability Partnership (LLP) or a private company. This ease of conversion is not bestowed upon an unregistered firm.
Procedure to register a partnership firm:
DOCUMENTS REQUIRED FOR PARTNERSHIP FIRM REGISTRATION
- Application for registration of partnership (Form 1)
- Specimen of affidavit
- The electricity bill of the firm you want to get registered or documents on rental/lease agreement. It acts as a proof of the principal place of business.
- Certified original copy of the Partnership Deed
The structure of the one person company (OPC) in recent times was launched as a refinement of the structure of a sole proprietorship firm Before the enforcement of the Companies Act, 2013, a single person could not establish a company
Benefits of OPC Registration
The directors' personal property is always safe in a private limited company, no matter the debts of the business.
Sole Proprietorships come to an end with the death of the proprietor. As an OPC company has a separate legal identity, it would pass on to the nominee director and, therefore, continue to exist.
As an OPC needs to have its books audited annually, it has greater credibility among vendors and lending institutions.
Documents Required for OPC Registration
- Copy of PAN Card of owner
- Passport size photograph of the owner
- Less paperwork to get started.
- Copy of Aadhaar Card/ Voter identity card
- Copy of Rent agreement (If rented property)
- Electricity/ Water bill (Business Place)
- Copy of Property papers (If owned property)
- Landlord NOC
Process for One Person Company Incorporation
- Step 1: Check eligibility and documents
- Step 2: Passport size photograph of the owner
- Step 3: Less paperwork to get started.
- Step 4: Copy of Aadhaar Card/ Voter identity card
- Step 5: Copy of Rent agreement (If rented property)
- Step 6: Electricity/ Water bill (Business Place)
- Step 7: Copy of Property papers (If owned property)
- Step 8: Landlord NOC
- Directors identification number for 1 director
- Digital signature certificate for 1 director (If the shareholders are different from directors, then additional DSC is required for shareholders)
- Guidance for choosing the company name
- Step 4: • PAN and TAN
- Drafting the memorandum & articles of association, RoC filing fees for an authorized capital, government stamp duty, and certificate of incorporation
- Name approval certificate
- GST registration
- PF registration
- ESI registration
- PT registration (only applicable in Maharashtra)
Pvt Ltd Company
Setting up a private limited company is one of the highly recommended ways to start a business in India. This type of company offers limited liability for its shareholders with certain restrictions placed on the ownership. In private limited company registration, directors may be different from shareholders.
Tax Acharya, your trusted Consultant, provides a cost-effective company registration service in India. You may learn how to register your business here. We take care of all legal formalities and fulfil the compliances, as defined by the Ministry of Corporate Affairs. Post-approval of the company registration process, you receive a Certificate of Incorporation (CoI), along with PAN and TAN.
Benefits of Company Registration
- Limited Liability: The most significant advantage of a private limited company is that the owners have limited liability. This means that the shareholders' assets are protected if the company goes into liquidation. If the company goes bankrupt, the owners are only liable for the amount they have invested in the company. Any company's money remains with the company and does not fall on the owners' shoulders
- Tax Efficient: Private limited companies are tax efficient as they can claim corporation tax relief on their profits. This can be a significant saving for businesses and increase profits. In addition, private limited companies can pay dividends to their shareholders, which are also taxed at a lower rate. In addition, there are several other tax advantages available to companies, such as capital allowances and R&D tax credits.
- Separate Legal Entity: A private limited company is a separate legal entity from its shareholders and directors. Offer liability protection to protect your company’s Assets.
- Easier To Raise Capital: Raising capital for a business can be challenging, and private limited companies are becoming increasingly popular as they attract investors into the business more due to their credibility. This can be done through issuing new shares, taking out loans, or issuing bonds. it is often easier to approach HNI for funding when operating under a private limited company. This is because these potential investors do not require an active role in the day-to-day management of the business, unlike shareholders in public companies.
- Flexible Management Structure: Private limited companies are famous for sole traders or small businesses that do not have the resources to set up a public limited company. This can be advantageous for companies who want to keep control of their operations within a small group of people. With private limited companies, the owners are given complete control over managing the business.
- Professional Image: A private limited company gives a professional image to businesses, which can be important when attracting new customers or investors. It also shows that the industry is established and has longevity. This is because private limited companies are more credible and established than sole traders or partnerships. In addition, private limited companies often have their website and letterhead, giving customers and suppliers a sense of trust in the business.
- Protection From Creditors: One of the critical benefits of a private limited company is that it offers protection from creditors. This is because the company is a separate legal entity from its shareholders and directors. If the company goes into debt or bankruptcy, creditors cannot seek direct payment from the personal assets of the business's owners. This can be essential protection for the shareholders and directors as it limits their liability. This means that if the company goes bankrupt, the owners are not personally liable for any money owed by the company. This can be a significant advantage for businesses struggling as it gives them some breathing room and time to reorganize their finances without worrying about personal repercussions.
Documents Required By Tax Acharya for Private Limited Company Registration
Documents Required from Directors, Shareholders
- Pan Card Copy (Mandatory)
- ID Proof (Any one) – Driving License/ Voter ID/ Passport Copy/ Aadhaar Card
- Address Proof – Latest Bank Statement/ Latest Telephone or Mobile Bill/ Latest Electricity Bill.(MUST be less than 30 days old)
- Passport Size Photograph
Documents Required for Registered Office Address
- NOC - No Objection Certificate from the Owner of the Property
- Address Proof - Latest Telephone Bill or Mobile Bill/ Gas Bill/ Electricity Bill (MUST be less than 30 days old)
WHY TAX ACHARYA ?
The Registration Process now is completely online. So you can get your entity registered while sitting at home. Tax Acharya Promise you to complete the process within 2 weeks.
Steps to incorporate LLP:
Name reservation: The first step to incorporate Limited liability partnership (LLP) is reservation of name of LLP. Applicant has to file eForm 1, for ascertaining availability and reservation of the name of a LLP business.
Incorporate LLP: After reserving a name, user has to file eForm 2 for incorporating a new Limited Liability Partnership (LLP). eForm 2 contains the details of LLP proposed to be incorporated, partners’/ designated partners’ details and consent of the partners/ designated partners to act as partners/ designated partners.
LLP Agreement: Execution of LLP Agreement is mandatory as per Section 23 of the Act. LLP Agreement is required to be filed with the registrar in eForm 3 within 30 days of incorporation of LLP.
Benefit of LLP – in the Contest of Tax Acharya team
The Partners of LLP are only liable for a small amount of debt incurred by it.
Separate Legal Entity
An LLP is a separate legal entity from the partners in it. It has an uninterrupted existence that follows perpetual succession
Transferring the ownership of an LLP is quite simple. A person can easily be appointed as a designated partner and the ownership switches to them.
Suitable For Small Business
LLPs having a capital amount less than ₹25 lakhs and turnover below ₹40 lakhs per year do not require any formal audits. This makes registering as an LLP beneficial for small businesses.
As the LLP are registered on MCA portals, the interested and potentials costumer can access the financials over MCA portal before getting transaction. Therefore provide better creditability
Section 8 Company
In India there are three type of NGOs structure, i.e., Trust, Society, Section 8 Company. The Trust & Society have no uniform law, vary state to state laws, But the Section 8 Company is centralised and uniform framework across the country, more creditability across world.
Section 8 Company is a company which
- Has in its objects the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or such other object:
- Intends to apply its profits if any or other income in promoting its objects and
- Shareholders/ Members are not eligible for Dividend
- Cannot use suffix “ Private Limited”
Benefit of Section 8 Company Registration
Easy to get registration under 12AA & 80G of Income tax act for getting exemption from income tax & Donor also eligible for claim deduction.
No Need of Share Capital
More Creditablity as compared to Trust / Society