Different Types of Companies You Can Register in India

India is one of the largest emerging economies in Asia and has numerous profitable business prospects for anyone who wants to start a new business venture here. Opening a business in India would require certain procedures to be taken care of along with the necessary market research to set a strong foundation for your business. Before you register your company in India, you must know all about the type of companies you can legally start here.

The Commercial Law of India offers several types of companies, so before you start registering for a company, quickly read about these different types of companies in India-

1.  Private Limited Companies-

A Private Limited Company is a company owned by a select group of individuals. It is licensed and owned by a body of people called shareholders for pre-defined objects. Private Company is popularly chosen as an acceptable business structure by startups and companies with higher growth ambitions. 

By registering under the Companies Act of 2013 in India, the corporation receives acknowledgement as a company. The regulatory body is the Ministry of Corporate Affairs, widely recognised as the MCA. To understand its basics, the description of a private company under the Act is given here. A private company is described by Section 2 (68) of the Act as:

A business with a minimum paid-up equity shares as specified, and which, according to its articles,

1) limits the right to transfer the shares thereof; 

 2)limits the number of its members to two hundred, except for the case of the One Person Company;   

 3)forbids any public invitation to subscribe to any of the company’s shares.

In simple words, this type of company consists of shareholders and the total number of shares held by each shareholder makes up the total capital.

As per the Companies Act 2013, at least 2 members are mandatory in a Private Limited company. The maximum number of members is 200.

A Private Limited Company can be further classified as:

a)      Company Limited by Shares– The liability of the shareholders of the company is limited to the nominal value of the shares.

b)     Company Limited by guarantee– It is a company without shareholders but it is owned by members called guarantors who agree to pay a nominal amount in the event of companies being wound up. An NGO is an example of a company limited by guarantee.

c)      Unlimited company– An unlimited company places unlimited liability for its debts upon its members. This is the riskiest of all.

2.  Public Limited Companies-

This type of company also offers liabilities to its shareholders and can be brought by the general public. In this type of company, it is mandatory to have 3 directors and a minimum of 7 shareholders. The number of shares is unlimited.

3.  Co-Branding Partnership Companies-

This is the type of company where the partners agree to take care of business operations and share its business and liabilities.

4.  One Person Company (OPC)-

A company formed with one single member is known as a One Person Company (OPC). This is the most suitable type of company for those individuals who own small businesses and start-ups and don’t need any partners.

5.  Sole Proprietorship-

It is one of the simplest business entities. It simply refers to an individual who owns and runs the business and takes complete responsibility for all the profits and losses made by the business.

6.  Section 8-

It is a type of company that comes under Section 8 of the Companies Act, 2013. This is commonly registered as a Non-Profit Organization (NGO). The objective of an NGO is to promote social welfare, research, education, charity, art, etc. All the profits generated by the company are used to fulfill these objectives.

DBPL can assist you in choosing the right type of company, tailored to your business needs. From research and feasibility to company formations and compliance, and then asset transactions, followed by intuitive design and build solutions, we also support you operationally with manpower and asset management, so you can do what you do best while we empower your success!