EACH BUSINESS TYPES COMES WITH ITS OWN SET OF LEGAL REQUIREMENTS AND REGULATIONS.BUSINESS SHOULD PAY SPECIAL ATTENTION TO THEM BEFORE INCORPORATING THE BUSINESS.
TYPES :-
SOLE PROPRIETORSHIP
PARTNERSHIP
LIMITED LIABILITY COMPANY
PRIVATE LIMITED COMPANY
LEGAL DETAILS:-
1)SOLE PROPRIETORSHIP
a)Meaning :- sole proprietorship is a type of enterprise that is owned & run by one person &in which there is no legal distinction below the owner & business entity.
b) Registration:- No formal registration required.
*Decide the business name
*Search availablity of name
*Register your name
*Obtain business license and permit from:-
The federal government
The state government
The local government
c)Member liability:- Unlimited liability.
(The business owner is personally responsible for any loss the business makes.)
d)Legal status:- Not recognised as a separate entity and promoter is personally responsible for all the liabilities.
e)Number of members Required:- Can only have one person.
f) Transferability:- Not transferable.
g)Taxation:- Taxed as individual,based on total income of proprietor.
h)Annual statutory meetings:- No requirement for annnual statutory meetings.
i)Annual filing :- No requirement to file annual report with the registrar of companies.
Income tax to be filed on the income of the proprietorship.
j) Existence or survivability:- Proprietorship existence is dependent on proprietor.
k)Foreign ownership:- foreigner are not allowed to be sole proprietors.
2) PARTNERSHIP
a)Meaning:- partnership is where two or more people share ownership as well as they manage companies income and loss both if co fails .
b) Registration:- Registration is optional .
File form A for registration of firm along with the form A
Following documents required to be submitted :-
*Duly filled specimen of affidavit
*Certified true copy of the partnership deed
*Ownership proof of the principal place of business or rental /lease agreement.
c)Legal status :- It is not recognised as a separate entity and promoters are personally responsible for all liablities.
d)Members liability:- Unlimited liability.
e)Number of members Required:- Minimum of two members Required to start a partnership.
f) Transferability:- Non transferable.
g)Taxation:- Partnership profits are taxed as per the slabs provided under income tax act 1961 plus surcharge and cess as applicable.
h)Annual statutory meetings:- No requirement are annual statutory meetings.
i)Annual filings:- No requirement to file annual report with the registrar of companies income tax to be filed to the partnership.
j) Existence or survivability:- Partnership existence is dependent on partners.can be dissolve at will or upon the death of Partners.
k)Foreign ownership:-Foreigners are not allowed to be part of a partnership.
3) LIMITED LIABILITY COMPANY
a) Meaning:- limited liability is a company in which some or all partners have limited liability investor and owners private assets are not at the risk.
b) Registration:- Limited liability company has to be registered with MCA (ministry corporate affairs)under LLP Act 2008.
*Deciding the partner and designated partners
*To obtain DIRECTOR IDENTIFICATION NUMBER (DIN) & DIGITAL SIGNATURE CERTIFICATE (DSC)
*After name approval file form 2 and form 18 to the ROC.
*After that file LLP agreement (I.e form -3) and partners details (i.e form -4).
c)Legal status:-limited liability comapny is a separate legal entity.the promoters of the LLP are not personally liable towards the LLP.
d)Member liability:- limited liability to the extent of contribution towards to the limited liability company.
e)Number of members Required:- Minimum of two members are required to start LLP.
f) Transferability:- ownership can be transferred.
g)Taxation:- limited liability company profits are taxed as per the slabs provided under income tax Act,1961 plus surcharge and cess as applicable.
h)Annual statutory meetings:-No requirement for annual statutory meetings .
I)Annual filings:- must file annual statement of return &solvency and Annual return.
j)Existence or Survivability:-Existence not dependent on partners.can be dissolved voluntarily or by order of the comapny law board
k)Foreign ownership:- foreigners are allowed to invest with /without the approval of the Reserve Bank Of India(RBI) and other applicable permission for the relevant government of India authorities depending on the category of business they are interested to invest .
4) PRIVATE LIMITED COMPANY
a)Meaning :- A private limited company does not publically trade shares & is limited to maximum 50 shareholders .
b) Registration:- Private limited company has to be registered with the MINISTRY CORPORATE AFFAIRS (MCA) Under the companies Act.
*Optain Digital signature Certificate (DSC)for the proposed Directors .
*Obtain Director identification number (DIN)for the proposed Directors.
*Select suitable Company Name and Make an application to the Ministry of corporate affairs for availability of name.
*Draft MOA &AOA.
*Sign and file various documents including MOA &AOA with the registrar of companies electronically .
*Payment of requisite fee to Ministry of corporate affairs and also stamp duty .
*Receipt of certificate of registration/incorporation from ROC.
c)Legal status :- Private limited company is a separate legal entity.The promoters of the company are not personally liable towards the company.
d)Members liability:- limited liability to extent of share capital.
e)Number of members Required:- Minimum of one person required to start. Private limited company.
g) Transferability:- Ownership can be transferred by means of share transfer.
h)Taxation:-private limited company profits are taxed as per the slabs provided under income tax Act ,1961 plus surcharge and cess as applicable.
I)Annual statutory meetings:- Board and General Meetings should be conducted periodically.
j)Annual filings:- File annual statement returns & solvency and Annual return with the registrar every year .Tax returns must also be filed annually.
k) Existence or Survivability:- Existence not dependent on directors or shareholders.it can be dissolved voluntarily or by regulatory Authorities.
l)Foreign ownership:- Foreigners are allowed to invest with/without the approval of RBI and other applicable permission for the relevant government of India authorities depending on the category of business they are interested to invest.
HOPE THIS WAS HELPFUL TO YOU 👍😁❤️
FOR MORE DETAILS READ MY OTHER BLOGS .
No comments:
Post a Comment