Company Formation

Private Limited Company is the most prevalent and popular type of corporate legal entity in India. Private limited company registration is governed by the Ministry of Corporate Affairs, Companies Act, 2013 and the Companies Incorporation Rules, 2014. To register a private limited company, a minimum of two shareholders and two directors are required. A natural person can be both a director and shareholder, while a corporate legal entity can only be a shareholder. Further, foreign nationals, foreign corporate entities or NRIs are allowed to be Directors and/or Shareholders of a Company with Foreign Direct Investment, making it the preferred choice of entity for foreign promoters. Unique features of a private limited company like limited liability protection to shareholders, ability to raise equity funds, separate legal entity status and perpetual existence make it the most recommended type of business entity for millions of small and medium sized businesses that are family owned or professionally managed.

Limited Liability Partnership (LLP) Registration
Limited Liability Partnership (LLP) was introduced in India by way of the Limited Liability Partnership Act, 2008. The basic premise behind the introduction of Limited Liability Partnership (LLP) is to provide a form of business entity that is simple to maintain while providing limited liability to the owners. Since, its introduction in 2010, LLPs have been well received with over 1 lakhs registrations so far until September, 2014. The main advantage of a Limited Liability Partnership over a traditional partnership firm is that in a LLP, one partner is not responsible or liable for another partner’s misconduct or negligence. A LLP also provides limited liability protection for the owners from the debts of the LLP. Therefore, all partners in a LLP enjoy a form of limited liability protection for each individual’s protection within the partnership, similar to that of the shareholders of a private limited company. However, unlike private limited company shareholder, the partners of a LLP have the right to manage the business directly.
LLP is one of the easiest form of business to incorporate and manage in India. With an easy incorporation process and simple compliance formalities, LLP is preferred by Professionals, Micro and Small businesses that are family owned or closely-held. Since, LLPs are not capable
of issuing equity shares, LLP should be used for any business that has plans for raising equity funds during its lifecycle.

Proprietorship Registration
A sole proprietorship is a type of unregistered business entity that is owned, managed and controlled by one person. Sole proprietorship’s are one of the most common forms of business in India, used by most micro and small businesses operating in the unorganised sectors. Proprietorships are very easy to start and have very minimal regulatory compliance requirement for started and operating. However, after the startup phase, proprietorship’s do
not offer the promoter a host of benefits such as limited liability proprietorship, corporate status, separate legal entity, independent existence, transferability, perpetual existence – which are desirable features for any business. Therefore, proprietorship registration is suited only for
unorganised, small businesses that will remain small and/or have a limited period of existence.
There is no mechanism provided by the Government of India for the registration of a Proprietorship. Therefore, the existence of a proprietorship must be established through tax registrations and other business registrations that a business is required to have as per the rules and regulations. For instance, VAT or Service Tax or GST Registration can be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship. Thus, all the registrations for a proprietorship would be in the name of the Proprietor, making the Proprietor personally liable for all the liabilities of the Proprietorship.

Partnership Firm Registration

A Partnership Firm is a popular form of business constitution for businesses that are owned, managed and controlled by an Association of People for profit. Partnership firms are relatively easy to start are is prevalent amongst small and medium sized businesses in the unorganized
sectors. With the introduction of Limited Liability Partnerships in India, Partnership Firms are fast losing their prevalence due to the added advantages offered by a Limited LiabilityPartnership.
There are two types of Partnership firms, registered and un-registered Partnership firm. It is not compulsory to register a Partnership firm; however, it is advisable to register a Partnership firm due to the added advantages. Partnership firms are created by drafting a Partnership deed
amongst the Partners and IndiaFilings can help start a registered or un-registered Partnership firm in India.

COMPLIANCE

 CORPORATE FILINGS

Change Of Registered Office

The registered office of a Company or LLP is the principle place of business for a private / public limited company and all official correspondence from the Ministry of Corporate Affairs is sent to this location. The registered office of a Company or LLP can be changed within the local limits of any city, town or village where such office is situated by just giving a notice to the concerned Registrar within 30 days after the date of the change. But a special resolution will be required if the change of the registered office is from one village, town, etc., in the same state. Where the place of registered offices is to be altered from one State to another State, the Company or LLP
may do so by passing special resolution and getting confirmation of the Company Law Board. The Company or LLP is also required to give an advertisement in the newspapers indicating the change proposed to be made and also a notice is to be given to the State Government when it
is proposed to transfer the registered office from one State to another.

A change to the registered business office address can be required due to various reasons. Further, the formalities and process for changing the Registered Office of the Company or LLP will depend on if the Company or LLP is changing address within the same city/town/village or if the Company is changing address between city/town/village of if the Company is changing the Registered Office between States.

Appointment of Director
Director of a company is a person elected by the shareholders for managing the affairs of the company as per the Memorandum of Association and Articles of Association of the company. Since a company is an artificial judicial person created by law, it can only act through the agency of natural persons. Thus, only living persons can be Directors of a company and the
management of a company is entrusted to the Board of Directors. Appointment of Directors can be required for a company from time to time based on the requirements of the shareholders of the business.

To appoint a director, the person proposing to become a Director must obtain a digital signature certificate (DSC) and director identification number (DIN). DIN can be obtained for any person who is above the age of 18. The nationality or residency status of the DIN applicant does not matters. Hence, Indian Nationals, Non-Resident Indians and Foreign Nationals can obtain DIN and be appointed as Director of a company in India.

Resignation of Director
Director of a company is a person elected by the shareholders for managing the affairs of the company as per the Memorandum of Association and Articles of Association of the company. Director in a company may need to resign or the Board of Directors or Shareholders may want to remove a Director for any reasons. In such cases, a Director can resign or be removed by filing the intimation of change of Director with MCA.

The procedure for resignation of director and removal of Director by the Board or Shareholders vary. A Director can resign from a company by giving a notice in writing to the company and the Board is required to file the necessary filings with MCA within 30 days. A Director can also send
a copy of the resignation letter to the ROC directly by filing a different set of forms.