Choosing the apt business entity for a startup is the first legal decision made by an Entrepreneur. To do so, entrepreneurs need to select the type of business entity they want -which can be a Private Limited Company Or Limited Liability Partnership, Or One Person Company. Private Limited Company is the most suitable choice among others. Limited Liability Partnership Or One Person Company works best for those startups who wish to have adequate control over their business operations.
Let’s acknowledge the details of each business entity to help you select the right one for your business.
- Private Limited Company
Private Limited Company’s legal structure is an ideal choice as it comes with the feature that the liability of the members is limited to their share in the capital. A private limited company has to be enlisted with the Registrar of Companies. When the registration process is completed, ROC issues a Certificate of Incorporation (COI) of your company.
The Ministry of Corporate Affairs (MCA) has started an online company registration process, i.e. the company registration can be done in a single form. All documents are requested to be submitted online. This legal structure is best for those startups looking to raise funding or give ESOPs to their employees.
- One Person Company
One Person Company is an ideal choice for those looking to start their business by themselves and wish to have adequate control over their business operations. Any Entrepreneur who wishes to start their business with limited liability should register for one personal company.
The one-person company can be listed with a minimum capital of INR 1 lakh. OPC can be converted into a private limited company when its paid-up capital increases to INR 50 lakhs.
- Limited Liability Partnership
Limited Liability Partnership is an ideal choice for those who are running their business with partners. LLP protects the partners from any clause that arises between them. The liability of partners in LLP is limited to their participation in the company. When the partners want external funding, the Limited Liability Partnership can be turned into a private limited company.
Takeaway
If you are still unsure what legal structure will be an ideal choice for your startup, contact Ontaxco-private limited company registration in Delhi. We will support and educate your company with every regulatory knowledge you need to grow and manage your business.
