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What is One Person Company?

As per the Companies Act, 2013 an One Person Company (OPC) is an unique entity where an individual can form a company. It combines the concept of a company with limited liability and succession, allowing a person to own and operate a company in their name.

Prior to the implementation of the Companies Act of 2013 only two people could form a company. The Companies Act of 2013 supports the formation of One Person Company (OPC) in India. It governs the registration and functioning of one person company in India. In comparison with a public company a private company should have at least two directors and two members however on the contrary, one person company registration doesn’t need any group of people to be incorporated.

As per the Section 262 of Companies Act of 2013 and official registration of OPC in India is legal. One person company registration in India requires a single director and a single member representing the whole firm. This corporation type has very few compliance requirements in comparison with a private corporation.

Documents Required for OPC Registration

Identity and Address Proof

Scanned copy of PAN card or passport (foreign nationals & NRIs)
Scanned copy of voter ID/passport/driving
Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned passport-sized photograph specimen signature (blank document with signature [directors only)

Registered Office Proof

Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned copy of notarised rental agreement in English
Scanned copy of no-objection certificate from the property owner
Scanned copy of sale deed/property deed in English (in case of owned property)

Steps for Registration of OPC

Step 1: Check the eligibility and documentation
Step 2: Request DSCs and DINs for each director
Step 3: Submit a request for a name reservation Form Spice+ for company incorporation
Step 4: Apply for PAN and TAN for your new business
Step 5: RoC issues an incorporation certificate with a PAN and TAN
Step 6: Open a bank account and start your business.

The whole process for one person company registration can be completed in a time span of just 20 days. All you have to do is reach out to Vakilsearch and complete the process with no delay.

Features of One Person Company

Easy Succession
Despite having a single person running all the daily activities of the company, OPC provides options for perpetual succession. After the demise of a member of the company, the nominee can run the company.

Limited Liability
The member in a one-person company has limited liability. Since OPC is a registered company it is treated as a separate legal entity providing greater protection to its members. The liability of the member is limited to their shares so they are not liable for any losses conducted in the company. In case of bankruptcy, the creditors can sue the company and not the director of the company for procuring the company’s debt.

Sole Directorship and Shareholder
In one person company registration a single member acts as a director so they stand liable for managing the company’s day-to-day activities. In this case, there is no need for an executive director to run the daily needs. A single member is more than sufficient and acts as a shareholder with all responsibilities.

Ownership in Property
Since the OPC is treated as a separate legal entity the person has the right to hold property related to business and other assets in their name. The properties including machinery factories, residential property, buildings, and other assets cannot be claimed by another person. As per law, the one person company registration can acquire property directly under its name.

Tax Implications for OPC

One Person Companies (OPCs) enjoy the same corporate tax status as Private Limited Companies (PLCs) in India. This means they are subject to a flat 30% tax rate on their net profits, along with Minimum Alternate Tax (MAT) and Dividend Distribution Tax (DDT) as applicable. However, there are some specific tax considerations for OPCs:

No Dividend Distribution Tax (DDT)
If the sole shareholder of an OPC chooses not to draw any dividends, no DDT is applicable. This can be a tax advantage compared to PLCs, where DDT is levied on distributed profits even if the shareholder is the same.

Perquisite Taxation

The value of perquisites provided to the sole director of an OPC, such as car allowances or mobile phone bills, is taxable as part of their salary income. This is similar to the treatment of perquisites for employees in any company.

Fringe Benefit Tax (FBT)
If the OPC provides any fringe benefits to its employees, such as free meals or club memberships, these are subject to FBT at a flat rate of 30%.

Goods and Services Tax (GST)
OPCs registered under GST must comply with the same filing and compliance requirements as any other registered business. The GST rate applicable to the OPC’s goods or services will depend on the specific category.

Income Tax Return (ITR)
OPCs must file their ITR using Form ITR-6, similar to other companies. The deadline for filing ITR is September 30th of each financial year.

Tax Audits
OPCs with a turnover exceeding Rs. 2 crore in a financial year are required to get their accounts audited by a Chartered Accountant.

What is Sole Proprietorship?

Sole Proprietorship registration in India is for one owner business. Sole proprietors manage profits and income tax under their own names or a trade name. It’s a common choice for small businesses and individual entrepreneurs.

When a business is owned and governed by one person, it is called a sole proprietorship company. This type of business can be incorporated in fifteen days and hence makes it one of the most popular types of business to begin in the unsystematic sector, specifically among merchants and small traders. For a Sole Proprietorship business, registration is not required as it is identified through alternate registrations, such as GST registrations. However, its liability is unlimited and it also doesn’t have perpetual existence.

Compliances Required For Sole Proprietorship Firm

Some of the compliances that apply to a sole proprietorship include the following:

Income Tax Return Filing: The proprietorship’s business owner must submit a personal income tax return using form ITR-3 or ITR-4
Business Income: Only the ITR-3 and ITR-4 income tax forms allow for the declaration of business income. As a result, in order to comply with income tax requirements, all proprietorships must submit forms ITR-3 or ITR-4
GST Return Filing: If a proprietorship is registered for GST, a filing GST return each month and every three months in accordance with the business’s registration plan
TDS Returns: Tax must be withheld at source and TDS returns must be filed quarterly if the proprietorship has employees or spends more than a specific amount on goods and services.

In addition to the mentioned points, the proprietorship may also need to comply with additional regulations according to its industry and region.

How to Check Sole Proprietorship Status?

To check the proprietorship status, you can follow these steps:
1. Go to the Ministry of Corporate Affairs (MCA) website.
2. Click on the ‘MCA Services’ tab.
3. In the ‘Master Data’ section, click on ‘Company/LLP Master Data’.
4. Enter the proprietorship’s CIN (Corporate Identification Number) or name in the search bar.
5. Click on the ‘Search’ button.

The MCA website will display the proprietorship’s registration status and other details, such as the proprietor’s name, address, and registration date.

If you do not know the proprietorship’s CIN, you can still check its status by entering its name in the search bar. However, this will only return a list of proprietorships with the same name. You will need to contact the MCA or a GST practitioner to get the exact CIN of the proprietorship.

Here are some of the possible statuses that you may see for a proprietorship:

Active: The proprietorship is registered and is currently in operation.
Inactive: The proprietorship is registered but is not currently in operation.
Suspended: The proprietorship’s registration has been suspended by the MCA.
Cancelled: The proprietorship’s registration has been cancelled by the MCA.

Documents Required For Registering A Sole Proprietorship

To start a Sole Proprietorship, the following documents are required

Address and identity proof
PAN card, KYC documents and
Rental agreement or sale deed (in case of Shops & Establishment Act Registration).

Benefits of Sole Proprietorship Firm

Sole proprietorship is a popular form of business in which an individual owns and operates a business. Some of the benefits of a sole proprietorship firm are:

Easy to Set Up
Sole proprietorship firms are easy to set up and operate. There are no formalities to be followed for setting up a sole proprietorship firm, which makes it a popular choice among small business owners.

Full Control
The owner of a sole proprietorship firm has full control over the business. They are free to make decisions without any interference from others.

No Separate Legal Entity
A sole proprietorship firm does not have a separate legal entity from its owner. This means that the owner is personally liable for all the debts and obligations of the business.

Tax Benefits
Sole proprietorship firms are taxed as individual taxpayers, which means that the owner can claim deductions for business expenses and losses on their personal income tax return.

Minimal Compliance Requirements
Sole proprietorship firms have minimal compliance requirements compared to other forms of businesses. They are not required to maintain any formal records or hold annual meetings.

Flexibility
Sole proprietorship firms offer great flexibility to the owner in terms of operations, management, and decision making.

Low Cost
Sole proprietorship firms are cost-effective to operate as they do not have to pay for legal fees or comply with complex regulatory requirements.

Overall, a sole proprietorship firm is an ideal option for small businesses with minimal capital and limited liability.

What is Partnership Firm?

Partnership Company registration in India is an arrangement between two or more people to conduct business operations together. In this type of partnership, profits and liabilities are shared among members, making it a common choice for small businesses and entrepreneurs.

A business established by two or more partners with the goal of achieving a profit is called a partnership firm registration. There are benefits to registering a partnership firm. The legal document used to establish a partnership company registration is known as a partnership deed.

The Indian Partnership Registration Act of 1932 is the primary governing partnership registration law in India. A partnership, as defined by the law, is a union of individuals who have consented to divide the profits from a company that they all, or any of them, act for a banking business. A partnership firm registration can only have a maximum of 10 members, whereas for other enterprises, it can have a maximum of 20 members.

While the partners are separate legal entities, partnership firms are not. A partnership firm registration is not permitted to be a debtor, creditor, or property owner. According to the law, the assets, liabilities, and credit of a partnership registration firm belong to the partners. To prevent future misunderstandings, the partnership agreement must specifically state how profits and losses will be distributed among the partners. Each partner is allowed to conduct business on behalf of the others.

Given its low expenses, simplicity of setup, and lack of stringent compliance requirements, it makes sense for some businesses, such as home-based ones that are unlikely to go into debt to register themselves as partnership firms. General partnerships have an optional registration process. To draft a current original partnership deed registration format, get in touch with our Vakilsearch experts right away. If there are fewer than two partners after a partner’s death, incapacitation, or resignation, the partnership firm registration will be dissolved.

Advantages of Partnership Firm Registration Online

Minimum Compliance
Whenever a private limited company is involved, something else always gets in the way (unless you hire someone to handle this for you). You avoid this hassle when you form a partnership. Seriously you don’t want to start out your business burdened with compliance work. You simply want to concentrate on your company.
Simple to Begin
One of the simplest types of businesses to launch is a partnership. In most cases, a partnership deed registration is the only necessity for register partnership firm in india. As a result, a partnership can be established today. On the other hand, an LLP enrollment would take between 5 and 10 working days to complete because the MCA must be contacted for the electronic signature, DIN, name approval, and incorporation.
Comparatively Economical
You will have to pay at least ₹15,000 to establish a private limited company, not to mention compliance and auditor fees. When you’re just getting started, do you want all this baggage? A partnership, however, will only set you back about ₹2,000.

Documents Required for Partnership Firm Registration

Registering a partnership firm in India is a common business structure that allows two or more individuals to collaborate and share responsibilities, making it essential to complete the necessary documentation and legal formalities for a smooth and compliant operation. Documents required for partnership firm registration are as follows.

Partnership Deed
Address Proof
Identity Proof of Partners
Passport-sized Photographs
Address Proof of Partners
Registration Certificate (if applicable)
Bank Account Proof
Specimen Signature
Partnership Firm’s PAN Card
GST Registration (if applicable)
Power of Attorney
NOC from the Property Owner
Affidavit

Steps for Partnership Firm Registration Online

Step 1: Submit a Register Partnership Firm Application
The Registrar of Firms in the state where the company is located must receive an application form and the required fees. All partners or their representatives must sign and verify the registration application.

Step 2: Choosing the Name of the Partnership Firm
A partnership firm registration can be referred to by any name. But make sure they abide by the rules—for example, no two names should be the same, nothing related to the government, etc.

Step 3: Registration Certificate
The firm will be registered in the Register of Firms and given the Registration Certificate if the Registrar is pleased with the registration application and supporting documentation. All firms’ most recent information is available in the Register of Firms, which anybody can access for a fee.

Characteristics of Partnership Firm

1. Number of Partners: A partnership registration must have at least two partners. When performing banking transactions, the maximum is 10; in all other situations, the maximum is 20.

2. Voluntary Registration: Although it is not required to register a partnership, it is always advisable to do so because doing so has many additional advantages.

3. Contractual partner: There is a contractual tie between each partner. A original partnership deed registration format proposes that in order on various aspects governs the relationship. Each and every partner signs the deed, binding each and each of them.

4. Competency of the Partners: According to the Act, the partners entering into the agreement must be competent adults and cannot be minors.

5. Profit and Loss Sharing: The partners divide the profits or losses according to the percentages that were agreed upon and recorded in the agreement.

6. Unlimited Liability: In all partnership firm registartion governed by the aforementioned Act, each partner is jointly and severally liable for any losses incurred by the firm.

7. Interest Transfer: A partner’s interest may not be transferred without the other partners’ approval.

8. Principal-agent relationship: Partners and the firm have a principal-agent relationship. The agent acts on behalf of the company, so it is expected that he will act in the company’s best interests. Any one of the partners may act on behalf of the other partners, or the entire partnership may carry out the business jointly.

Private Limited Company

A private limited company is a business entity offering limited owner liability. It is apt for a small number of shareholders and allows up to 200 members along with flexibility in shares and shareholdings.

One of the most highly recommended methods for starting a business in India is to establish a private limited company, which provides its shareholders with limited liability while imposing certain ownership restrictions. When it is LLP, the partners will manage it. On the other hand, a private limited company registration allows for directors and shareholders to be separate entities.

As your dependable legal advisor, Vakilsearch offers a cost-efficient service for registering your company in India. We handle all legal procedures and ensure compliance with the regulations set forth by the Ministry of Corporate Affairs (MCA). Upon successful completion of the pvt Ltd company registration process, we provide you with an Incorporation certificate (CoI), as well as PAN and TAN documents. With these in hand, you can easily establish a current bank account and commence your business operations.

Benefits of Private Limited Company Registration

There are numerous advantages to registering a company. By doing so, you enhance the credibility of your business, which can lead to increased consumer trust. Additionally, company registration online can provide various benefits that can help your business to grow and succeed.

Shield from personal liability and protects from other risks and losses
Attract more customers
Procure bank credits and good investment from reliable investors with ease
Offers liability protection to protect your company’s assets
Greater capital contribution and greater stability
Increases the potential to grow big and expand

Steps For Company Registration Process in India

Step 1: Collecting Initial Documents
Gather the necessary documents and get them verified for the incorporation process.

Step 2: DSC and Name Approval
Apply for Digital Signature Certificate (DSC) and seek approval for your company name from MCA.

Step 3: Collecting Additional Documents
Acquire the second set of required documents and ensure their verification.

Step 4: Drafting MOA and AOA
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) for your company.

Step 5: Final Form Upload
Upload the completed documents and forms for the final stage of company incorporation

Characteristics of Private Limited Company

Members: According to the applicable Act, a private limited company must have a minimum of two members, with a maximum limit of 200 shareholders.

Number of director: As per the Act, a private limited company is required to have a minimum of two directors, while the maximum number of directors allowed is 15.

Limited liability: In a private limited company, the liability of its members or shareholders is limited. This means that in the event of company losses, shareholders are not personally liable to sell their personal assets for repayment. They are only responsible for the amount of shares subscribed or the guaranteed amount agreed upon.

Perpetual succession: Perpetual succession ensures that a private limited company continues to exist legally, regardless of factors such as insolvency, bankruptcy, or the death of any of its members. The company’s existence is perpetual.

Authorized and paid-up share capital: A private limited company must have an authorized share capital of at least ₹1 lakh. The amendment to the Companies Act removed the requirement for a minimum paid-up share capital.

Name: The name of a private limited company should include the words ‘private limited’ at the end. For example, if the company name is ABC, it should be written as ‘ABC Pvt. Ltd’ in official communications and registration forms.

Prospectus: A prospectus provides a detailed statement about the company’s status and affairs. However, a private limited company cannot issue a prospectus since it is not permitted to invite the public to subscribe to its shares.

Index of members: A private limited company is not obligated to maintain an index of its members according to the Act. Conversely, a public company is required to maintain such an index.

Private Limited Company Registration Compliances

After the process of company registration in India, it is necessary to adhere to various compliance regulations in order to avoid potential fines and legal repercussions. Some of the key post-registration requirements include:

Auditor Appointment: Within 30 days of company incorporation, every Indian company must appoint a practising, certified, and registered Chartered Accountant(CA).

Director DIN KYC: Every year, individuals who possess a Director Identification Number (DIN) should undergo a DIN KYC process. During the company incorporation process, the company can get the DIN. This helps to verify the phone number and email address on file with the MCA.

Commencement of Business: The shareholders of the company must deposit the subscription amount specified in the MOA within 180 days of incorporation, and the company must create a bank current account. Therefore, to receive a business incorporation certificate, the shareholders of a company established with a paid-up capital of ₹1 lakh must deposit ₹1 lakh into the company’s bank account. They should also file a copy of the bank statement with the MCA.

MCA Annual Filings: Every financial year, the MCA must get a copy of the financial statements from each company registered in India. A corporation that incorporates between January and March may elect to include the first MCA annual return in the annual filing for the following fiscal year. Forms MGT-7 and AOC-4 are the components of the MCA yearly return. The Directors and a working professional must digitally sign both of these documents.

Income Tax Filing: Every financial year, businesses should file an income tax return using form ITR-6. The business should file the income tax before the deadline for each financial year, irrespective of the date of incorporation. The company’s income tax return must be digitally signed using the director’s digital signature.

Documents Required for Online Company Registration

The MCA requires proper identity and address proof for private limited company registration in India. The following documents are the requirements for registering a company in India:

Identity and Address Proof

Scanned copy of PAN card or passport (foreign nationals & NRIs)
Scanned copy of voter ID/passport/driving license
Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned passport-sized photograph specimen signature (blank document with signature [directors only)

Registered Office Proof

Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned copy of notarised rental agreement in English
Scanned copy of no-objection certificate from the property owner
Scanned copy of sale deed/property deed in English

What Is Limited Liability Partnership?

LLP is a popular type of partnership where limited liability Partners enjoy protection of personal assets from debts, liabilities & damages. An LLP is a corporate body and legal entity separate from its partners. It has perpetual succession in every state and is registered under the LLP Act, 2008

An LLP (Limited Liability Partnership) is a corporate business structure that offers its members the benefit of limited liability, just like a company. It allows partners to manage internal affairs based on mutually agreed-upon terms, similar to a partnership firm. Partners have reduced liabilities for any future debts incurred in the course of running the business.

An LLP combines features of both a corporate structure and a partnership firm, making it a hybrid entity that provides the best of both worlds. Partners are required to contribute to the LLP as specified in the LLP Agreement, and their contributions can take various forms, such as tangible or intangible assets, movable or immovable property, money, and cash.

In an LLP, the Company itself is liable for any losses or debts incurred in business operations, which means individual members of the LLP are not personally responsible for such financial obligations.

Features of Limited Liability Partnership

LLP is a Body of Corporate
Perpetual Succession
Separate Legal Entity
LLP Agreement
Artificial Legal Person
Common Seal
Limited Liability
Minimum and Maximum Number of Partners
Business Management and Structure
Business for Profit Only
Investigation
Mutual Agency

Pre-requisites for Incorporating an LLP

Minimum two partners allowed (Individual or body corporate)
At least two designated partners are required, with one being an Indian resident
A digital signature certificate needed
Mandatory to have an LLP name
An LLP agreement is essential
A registered office must be established.

Drafting and Filing LLP Agreement

The next crucial step in the LLP incorporation process involves carefully crafting the LLP Agreement to meet the partners’ specific requirements. This agreement serves as the foundational document of the LLP and outlines key aspects of the business.

Here are the essential details included in the LLP Agreement:
- LLP’s Name: The agreement specifies the chosen name of the LLP, ensuring it aligns with the approved name reserved during the earlier stage of the process.
- Partners and Designated Partners’ Details: The agreement includes the names and addresses of all partners and designated partners involved in the LLP.
- Business Objectives: The objectives and scope of the LLP’s business activities are clearly defined in the agreement.
- Place of Business: The physical location of the LLP’s registered office and any additional places of business are documented.
- Contribution and Interest on Contribution: The agreement outlines the capital contributions made by partners and the corresponding interest on those contributions.
- Profit Sharing Ratio: The distribution of profits among partners is stated, highlighting the agreed-upon profit-sharing ratio.
- Rights and Duties of Partners: The agreement delineates the rights and responsibilities of partners in various scenarios, such as admission, resignation, retirement, etc.
- Proposed Business: A detailed description of the proposed business activities and operations of the LLP is provided.
- LLP Governance Rules: The internal governance structure and decision-making processes within the LLP are outlined in the agreement.

Tax Implications of LLP

Separate Taxable Entity

LLPs are taxed as distinct entities from their partners, akin to corporations.
The LLP independently files tax returns and fulfills tax obligations.
The applicable tax rate is currently 30% plus surcharge and cess.

Pass-Through Taxation

The LLP’s income is not directly taxed in the hands of partners.
However, partners report and pay taxes on their allocated share of LLP profits as per their individual tax brackets.

Deductions and Benefits

LLPs can avail themselves of various deductions and benefits commonly available to companies, including:

Depreciation on assets
Interest on loans
Business expenses
Research and development costs
Other allowable deductions under the Income Tax Act

Compliance and Designated Partner

- A designated partner is responsible for ensuring the LLP’s tax compliance, encompassing
- Timely and accurate filing of tax returns
- Maintenance of proper accounts and records
- Adherence to tax laws and regulations
- Partners generally have limited liability for tax debts, barring cases of fraud, negligence, or wrongful trading.

LLP Agreement Format

LIMITED LIABILITY PARTNERSHIP AGREEMENT

Name of Partner 1 (the ‘First Partner’):

Address: [Address]
Capital Contribution: [Amount or Description]
Profit-Sharing Ratio: [Percentage]
Name of Partner 2 (the ‘Second Partner’):

Address: [Address]
Capital Contribution: [Amount or Description]
Profit-Sharing Ratio: [Percentage]
[Add more partner sections if there are additional partners]

NAME AND ADDRESS OF THE LLP
NATURE OF BUSINESS
DURATION OF THE LLP
CAPITAL CONTRIBUTIONS
PROFIT AND LOSS SHARING
MANAGEMENT AND DECISION-MAKING
MEETINGS AND VOTING
WITHDRAWAL OR RESIGNATION
ADMISSION OF NEW PARTNERS
DISSOLUTION AND WINDING UP
GOVERNING LAW
AMENDMENT OF THE AGREEMENT

What is One Person Company?

Documents Required for OPC Registration

Identity and Address Proof

Scanned copy of PAN card or passport (foreign nationals & NRIs)
Scanned copy of voter ID/passport/driving
Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned passport-sized photograph specimen signature (blank document with signature [directors only)

Registered Office Proof

Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned copy of notarised rental agreement in English
Scanned copy of no-objection certificate from the property owner
Scanned copy of sale deed/property deed in English (in case of owned property)

Steps for Registration of OPC

The whole process for one person company registration can be completed in a time span of just 20 days. All you have to do is reach out to Vakilsearch and complete the process with no delay.

Features of One Person Company

Tax Implications for OPC

Perquisite Taxation

Fringe Benefit Tax (FBT)
If the OPC provides any fringe benefits to its employees, such as free meals or club memberships, these are subject to FBT at a flat rate of 30%.

Income Tax Return (ITR)
OPCs must file their ITR using Form ITR-6, similar to other companies. The deadline for filing ITR is September 30th of each financial year.

Tax Audits
OPCs with a turnover exceeding Rs. 2 crore in a financial year are required to get their accounts audited by a Chartered Accountant.

What is Sole Proprietorship?

Compliances Required For Sole Proprietorship Firm

Some of the compliances that apply to a sole proprietorship include the following:

Income Tax Return Filing: The proprietorship’s business owner must submit a personal income tax return using form ITR-3 or ITR-4
Business Income: Only the ITR-3 and ITR-4 income tax forms allow for the declaration of business income. As a result, in order to comply with income tax requirements, all proprietorships must submit forms ITR-3 or ITR-4
GST Return Filing: If a proprietorship is registered for GST, a filing GST return each month and every three months in accordance with the business’s registration plan
TDS Returns: Tax must be withheld at source and TDS returns must be filed quarterly if the proprietorship has employees or spends more than a specific amount on goods and services.

In addition to the mentioned points, the proprietorship may also need to comply with additional regulations according to its industry and region.

How to Check Sole Proprietorship Status?

The MCA website will display the proprietorship’s registration status and other details, such as the proprietor’s name, address, and registration date.

Here are some of the possible statuses that you may see for a proprietorship:

Active: The proprietorship is registered and is currently in operation.
Inactive: The proprietorship is registered but is not currently in operation.
Suspended: The proprietorship’s registration has been suspended by the MCA.
Cancelled: The proprietorship’s registration has been cancelled by the MCA.

Documents Required For Registering A Sole Proprietorship

To start a Sole Proprietorship, the following documents are required

Address and identity proof
PAN card, KYC documents and
Rental agreement or sale deed (in case of Shops & Establishment Act Registration).

Benefits of Sole Proprietorship Firm

Sole proprietorship is a popular form of business in which an individual owns and operates a business. Some of the benefits of a sole proprietorship firm are:

Full Control
The owner of a sole proprietorship firm has full control over the business. They are free to make decisions without any interference from others.

Tax Benefits
Sole proprietorship firms are taxed as individual taxpayers, which means that the owner can claim deductions for business expenses and losses on their personal income tax return.

Flexibility
Sole proprietorship firms offer great flexibility to the owner in terms of operations, management, and decision making.

Low Cost
Sole proprietorship firms are cost-effective to operate as they do not have to pay for legal fees or comply with complex regulatory requirements.

Overall, a sole proprietorship firm is an ideal option for small businesses with minimal capital and limited liability.

What is Partnership Firm?

Advantages of Partnership Firm Registration Online

Minimum Compliance
Whenever a private limited company is involved, something else always gets in the way (unless you hire someone to handle this for you). You avoid this hassle when you form a partnership. Seriously you don’t want to start out your business burdened with compliance work. You simply want to concentrate on your company.
Simple to Begin
One of the simplest types of businesses to launch is a partnership. In most cases, a partnership deed registration is the only necessity for register partnership firm in india. As a result, a partnership can be established today. On the other hand, an LLP enrollment would take between 5 and 10 working days to complete because the MCA must be contacted for the electronic signature, DIN, name approval, and incorporation.
Comparatively Economical
You will have to pay at least ₹15,000 to establish a private limited company, not to mention compliance and auditor fees. When you’re just getting started, do you want all this baggage? A partnership, however, will only set you back about ₹2,000.

Documents Required for Partnership Firm Registration

Partnership Deed
Address Proof
Identity Proof of Partners
Passport-sized Photographs
Address Proof of Partners
Registration Certificate (if applicable)
Bank Account Proof
Specimen Signature
Partnership Firm’s PAN Card
GST Registration (if applicable)
Power of Attorney
NOC from the Property Owner
Affidavit

Steps for Partnership Firm Registration Online

Characteristics of Partnership Firm

1. Number of Partners: A partnership registration must have at least two partners. When performing banking transactions, the maximum is 10; in all other situations, the maximum is 20.

2. Voluntary Registration: Although it is not required to register a partnership, it is always advisable to do so because doing so has many additional advantages.

4. Competency of the Partners: According to the Act, the partners entering into the agreement must be competent adults and cannot be minors.

5. Profit and Loss Sharing: The partners divide the profits or losses according to the percentages that were agreed upon and recorded in the agreement.

6. Unlimited Liability: In all partnership firm registartion governed by the aforementioned Act, each partner is jointly and severally liable for any losses incurred by the firm.

7. Interest Transfer: A partner’s interest may not be transferred without the other partners’ approval.

Private Limited Company

Benefits of Private Limited Company Registration

Shield from personal liability and protects from other risks and losses
Attract more customers
Procure bank credits and good investment from reliable investors with ease
Offers liability protection to protect your company’s assets
Greater capital contribution and greater stability
Increases the potential to grow big and expand

Steps For Company Registration Process in India

Step 1: Collecting Initial Documents
Gather the necessary documents and get them verified for the incorporation process.

Step 2: DSC and Name Approval
Apply for Digital Signature Certificate (DSC) and seek approval for your company name from MCA.

Step 3: Collecting Additional Documents
Acquire the second set of required documents and ensure their verification.

Step 4: Drafting MOA and AOA
Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) for your company.

Step 5: Final Form Upload
Upload the completed documents and forms for the final stage of company incorporation

Characteristics of Private Limited Company

Members: According to the applicable Act, a private limited company must have a minimum of two members, with a maximum limit of 200 shareholders.

Number of director: As per the Act, a private limited company is required to have a minimum of two directors, while the maximum number of directors allowed is 15.

Index of members: A private limited company is not obligated to maintain an index of its members according to the Act. Conversely, a public company is required to maintain such an index.

Private Limited Company Registration Compliances

Auditor Appointment: Within 30 days of company incorporation, every Indian company must appoint a practising, certified, and registered Chartered Accountant(CA).

Documents Required for Online Company Registration

The MCA requires proper identity and address proof for private limited company registration in India. The following documents are the requirements for registering a company in India:

Identity and Address Proof

Scanned copy of PAN card or passport (foreign nationals & NRIs)
Scanned copy of voter ID/passport/driving license
Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned passport-sized photograph specimen signature (blank document with signature [directors only)

Registered Office Proof

Scanned copy of the latest bank statement/telephone or mobile bill/electricity or gas bill
Scanned copy of notarised rental agreement in English
Scanned copy of no-objection certificate from the property owner
Scanned copy of sale deed/property deed in English

What Is Limited Liability Partnership?

Features of Limited Liability Partnership

LLP is a Body of Corporate
Perpetual Succession
Separate Legal Entity
LLP Agreement
Artificial Legal Person
Common Seal
Limited Liability
Minimum and Maximum Number of Partners
Business Management and Structure
Business for Profit Only
Investigation
Mutual Agency

Pre-requisites for Incorporating an LLP

Minimum two partners allowed (Individual or body corporate)
At least two designated partners are required, with one being an Indian resident
A digital signature certificate needed
Mandatory to have an LLP name
An LLP agreement is essential
A registered office must be established.

Drafting and Filing LLP Agreement

The next crucial step in the LLP incorporation process involves carefully crafting the LLP Agreement to meet the partners’ specific requirements. This agreement serves as the foundational document of the LLP and outlines key aspects of the business.

Here are the essential details included in the LLP Agreement:
- LLP’s Name: The agreement specifies the chosen name of the LLP, ensuring it aligns with the approved name reserved during the earlier stage of the process.
- Partners and Designated Partners’ Details: The agreement includes the names and addresses of all partners and designated partners involved in the LLP.
- Business Objectives: The objectives and scope of the LLP’s business activities are clearly defined in the agreement.
- Place of Business: The physical location of the LLP’s registered office and any additional places of business are documented.
- Contribution and Interest on Contribution: The agreement outlines the capital contributions made by partners and the corresponding interest on those contributions.
- Profit Sharing Ratio: The distribution of profits among partners is stated, highlighting the agreed-upon profit-sharing ratio.
- Rights and Duties of Partners: The agreement delineates the rights and responsibilities of partners in various scenarios, such as admission, resignation, retirement, etc.
- Proposed Business: A detailed description of the proposed business activities and operations of the LLP is provided.
- LLP Governance Rules: The internal governance structure and decision-making processes within the LLP are outlined in the agreement.

Tax Implications of LLP

Separate Taxable Entity

LLPs are taxed as distinct entities from their partners, akin to corporations.
The LLP independently files tax returns and fulfills tax obligations.
The applicable tax rate is currently 30% plus surcharge and cess.

Pass-Through Taxation

The LLP’s income is not directly taxed in the hands of partners.
However, partners report and pay taxes on their allocated share of LLP profits as per their individual tax brackets.

Deductions and Benefits

LLPs can avail themselves of various deductions and benefits commonly available to companies, including:

Depreciation on assets
Interest on loans
Business expenses
Research and development costs
Other allowable deductions under the Income Tax Act

Compliance and Designated Partner

- A designated partner is responsible for ensuring the LLP’s tax compliance, encompassing
- Timely and accurate filing of tax returns
- Maintenance of proper accounts and records
- Adherence to tax laws and regulations
- Partners generally have limited liability for tax debts, barring cases of fraud, negligence, or wrongful trading.

LLP Agreement Format

LIMITED LIABILITY PARTNERSHIP AGREEMENT

Name of Partner 1 (the ‘First Partner’):

Address: [Address]
Capital Contribution: [Amount or Description]
Profit-Sharing Ratio: [Percentage]
Name of Partner 2 (the ‘Second Partner’):

Address: [Address]
Capital Contribution: [Amount or Description]
Profit-Sharing Ratio: [Percentage]
[Add more partner sections if there are additional partners]

NAME AND ADDRESS OF THE LLP
NATURE OF BUSINESS
DURATION OF THE LLP
CAPITAL CONTRIBUTIONS
PROFIT AND LOSS SHARING
MANAGEMENT AND DECISION-MAKING
MEETINGS AND VOTING
WITHDRAWAL OR RESIGNATION
ADMISSION OF NEW PARTNERS
DISSOLUTION AND WINDING UP
GOVERNING LAW
AMENDMENT OF THE AGREEMENT

FAQs ?

What is a one person company (OPC)?
A one person company (OPC) is a type of business entity that allows a single individual to operate and manage the company. It was introduced in India to provide a platform for entrepreneurs who want to start a company with the benefits of limited liability.
What are the features of a one person company?

OPC has only one shareholder who is the sole owner and director of the company.

It enjoys the benefits of limited liability, meaning the personal assets of the owner are separate from the company’s liabilities.
OPC does not require appointing a minimum number of directors like other companies.
It has perpetual succession, meaning the existence of the company is not affected by the death or incapacitation of the owner.
OPC is not allowed to raise funds from the public through share issuance.

Who is eligible for OPC?
Only a natural person who is an Indian citizen and resident in India can form an OPC. Additionally, an individual cannot be a member of more than one OPC at the same time.
What are the documents required for OPC company registration?
The documents required for OPC company registration include:

Identity and address proofs of the owner/director(s).
Address proof of the company’s registered office.
Memorandum of Association (MOA) and Articles of Association (AOA) of the company.
Consent to act as a director from the owner/director(s).
NOC (No Objection Certificate) from the property owner of the registered office.

What is the GST annual return?
The GST annual return is a statement that taxpayers are required to file with the CBIC every year. The annual return contains information about the taxpayer’s turnover, GST paid, and GST claimed as input tax credit.
Who launched the GST?
The GST was launched by the then Prime Minister of India, Narendra Modi, on July 1, 2017.
What are the basic concepts of GST?

The basic concepts of GST are as follows:

One Nation, One Tax: GST is a single, unified tax that applies throughout India. This means that there is no difference in the tax rates for intra-state and inter-state supplies of goods and services.
Input Tax Credit: GST paid on inputs can be set off against the GST payable on outputs. This helps to avoid double taxation.
Destination-based Consumption Tax: GST is levied on the consumption of goods and services, rather than on their production. This means that the GST is collected from the state where the goods or services are consumed.

What is the new GST notification for 2023?
The Government of India issues GST notifications from time to time to make changes to the GST laws and regulations. The latest GST notification was issued on October 1, 2023. This notification contains amendments to the GST rates for certain goods and services, as well as changes to the GST procedures.
Accordion What is the GST turnover limit for 2023?
The GST turnover limit for 2023 is ₹20 lakhs for regular taxable persons and ₹10 lakhs for special category states and union territories. Taxpayers who exceed the turnover limit are required to register for GST.
What are the new rules for GST?

The Government of India has introduced a number of new rules for GST in recent months. Some of the key new rules include:

Increased GST rates for certain goods and services
New rules for e-way bill
New rules for GST returns
New rules for GST refunds

Who can file a GST return?
Any individual, business, or entity registered under GST is required to file GST returns. This includes regular taxpayers, composition scheme taxpayers, Input Service Distributors (ISD), Non-Resident Taxable Persons (NRTP), and others who are liable to pay GST.
What are the types of returns under GST?

There are three types of GST:

Central GST (CGST): Levied by the central government on intra-state supplies of goods and services.
State GST (SGST): Levied by the state government on intra-state supplies of goods and services.
Integrated GST (IGST): Levied on inter-state supplies of goods and services.

What is the benefit of GST return?
GST returns serve as a mechanism to report the details of sales, purchases, and taxes paid. Filing GST returns ensures compliance with tax laws, facilitates claiming input tax credit, and enables the government to track taxable transactions, leading to a more transparent and efficient tax system.
What is the monthly return of GST?
GSTR-1 and GSTR-3B are the two primary monthly returns under GST. GSTR-1 is used to report outward supplies, while GSTR-3B is a summary return used to declare the tax liability and make payments.
Is the GST filing monthly or quarterly?
For most taxpayers, GST filing is done on a monthly basis. However, certain taxpayers, such as those under the composition scheme, file returns on a quarterly basis.
Can I get a GST refund of more than 2 lakhs?
Yes, eligible taxpayers can claim a GST refund exceeding Rs. 2 lakhs. However, such refunds require proper documentation and compliance with the GST laws.
How do I file a zero return in GST?
To file a zero return in GST, taxpayers need to log in to the GST portal and fill in the relevant details in the respective return forms (e.g., GSTR-1 or GSTR-3B) showing nil or zero-rated supplies and liabilities.
Is CA required to file GST returns?
It is not mandatory to hire a CA to file GST returns. However, it is advisable to consult with a CA if you are unsure about how to file your GST returns or if you have complex GST transactions.
What is the time limit for GST return rectification?
The time limit for GST return rectification is one year from the due date of filing the return.
What is a tax invoice?
A tax invoice is a document that is issued by a registered taxpayer to a recipient upon the supply of goods or services. A tax invoice must contain certain mandatory information, such as the GST number of the supplier and recipient, the description of the goods or services supplied, the value of the supply, and the amount of GST charged.

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