Know about different types of companies

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Registration of a business is very crucial. You should know which type of registration has to be done which is feasible for you. Here are the types of company registrations.

1.) Sole proprietorship

It is a type of company which is owned by a single person. There are very minimal or low documentation processes if you want to start a business as a sole proprietor.

In this, you will be responsible for all the operations including debts, profits, etc. It is good for the people who are starting a business with low capital.

2.) Private limited

It is the most sought registration for startups who want to raise funds from other investors.

It requires a minimum of two shareholders and directors. The minimum capital required is 1 lakh rupees for registration.

However, you don’t need to show the minimum capital in a bank account or elsewhere. The capital will be shown only in documents.

3.) Public limited

It is a type of company registration which is done by big companies. It requires a minimum paid up capital of 500000 rupees. It needs minimum 7 members or shareholders and 3 directors for registration.

You can issue an IPO to raise money from the public.

4.) Limited liability partnership

It is a type of company in which the partners have limited liability. Each partner is responsible for their own deeds. They are not responsible for other partner’s affair. They work on mutual agreements between each other.

There are other types of partnerships firms like a general partnership and liability partnership.

5.) One person company

It is regarded as a private limited company with one member in India. It has some similar features and requirements of a private limited company. But there is only one member of the company.

Here you can’t raise capital by giving equity as it is a one person company registration. But you are allowed to take loans and other features.

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Saifullah Khan

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