Guide for Common Types of Business Startup in India
Clarifying Any Doubt about Business Startup in India
The most difficult thing for a startup owner is to find the best type of business to set up in India. Although, the most known startup amongst the commercial firms is a Pvt. Ltd. (private limited) firm, but LLP is also chosen by many in the cases of the small investment. In this blog, we’ll be talking about the different business types to setup business in India. Starting a new business is undoubtedly relatively easy but the procedure involved is quite challenging or a little demanding.
Let’s discuss a few formats of business that will help you to setup firm in India:
Sole Proprietorship Firm
The proprietorship business is owned by a single person known as proprietor. The sole proprietorship setup business in India is perhaps the most simple business type. Most of the neighborhood bread and butter shops, grocery shops, miscellaneous stores are the perfect examples of proprietorship firm.
Partnership Firm As Business Type
A partnership firm can be set up by any two Indian citizens. However, the maximum number of partners is capped at 20 for business, and for the banking business, it can be up to 10 only. The partnership business setup business in India has few advantages compared to a proprietorship firm, like accumulating more capital and resources.
Limited Liability Partnership (LLP) As Business Type
The Limited Liability Partnership (LLP) is advancement over the traditional form of partnerships and was introduced by the LLP Act, 2008. This is a hybrid form of business, where you will find the simplicity of partnership firm and critical features of a private limited company.
One Person Company (OPC) As Business Type
The benefits of a corporate form of business are now available for a single person company, thanks to the introduction of One Person Company, also known as OPC in the Companies Act, 2013.
Private Limited Company As Business Type
A private Limited Company is the most popular form of business in India among the startups because of its ability to issue shares to potential investors. Every successful company you will find is in this format of business. The legal regime for a company business type is fully developed and stable. The tax rates for companies are the lowest in India @ 15% for manufacturing companies and 22% for companies other than manufacturing.