Types of Companies in India
Updated on Saturday 14th October 2017
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Being one of the largest emerging markets in Asia, India can offer numerous business prospects for investors who want to establish a company here. When starting a company in India, the first aspect that should be decided by the investors is the legal entity under which their business will operate. The Commercial Law in India offers numerous types of companies, but the one preffered by most of the businessmen is the private limited company. Our team of specialists in company formation in India can offer assistance on the main regulations available for each Indian company type, which is incorporated following the provisions of the Companies Act 2013.
What are the main legal entities in India?
The procedure on how to form a company in India requires investors to perform a set of steps, including in choosing a legal entity. The business form should be chosen depending on the business plans of the investors, the capital they are willing to invest, liability and others.
The Companies Act 2013 provides the following types of business forms:
• private limited company;
• public limited company;
• unlimited company;
• limited liability partnership;
• sole proprietorship;
• joint venture company;
• Section 8 company.
Foreign companies can set up the following business forms:
• representative office;
• project office;
• branch office;
Private limited company in India
As mentioned at the beginning of the article, the private limited company is the most popular business form registered in India, as it offers numerous advantages to its founders. Those who want to open a company in India under this business form should know that the founders (who have the quality of shareholders) are not allowed to transfer their shares.
Each founder becomes a shareholder after acquiring shares in the company, which will provide ownership rights. The main advantage of this type of company is that the legal entity offers separate liability, as the shareholders will only be liable for the business’ debts in the amount to which they have subscribed to the company’s capital. Our team of agents in company registration in India can offer further information on the characteristics of the private limited company.
The Section 8 company in India refers to a non-profit business form, which can be used to promote culture, arts, sports, research, charity and other types of activities which are prescribed under the Companies Act.
Investors are invited to contact our team of consultants in company formation in India for further information on the Indian business forms.