Any one or more persons associated for lawful purpose may, by subscribing their names to the Memorandum of Association and complying with the requirements of the Companies Act, 2013 form a company and any two or more persons so associated may, in like manner, are termed as partners.
An easy to understand definition
A company is a set of people, who join hands to set up an organization, working in a singular direction to achieve a common goal.
The most common form of any business entity is Sole Proprietorship, which is the simplest business form under which one can operate a business. The sole proprietorship is not considered as a legal entity. It generally refers to a person who owns the business and is personally responsible for its operations an in some cases even its debts.
The second form of business entity that makes an individual more powerful and hence recognized as a legal entity, that is been termed as One Person Company (OPC).
When a person joins hand with someone who is a friend, family member or acquaintance to form a business entity that is termed as Partnership. Partnership deed can be notarized by the notary advocate to make the agreement of partnership registered. In certain cases, partnership can be registered with ROC (Registrar of Companies. The liabilities of the business, thus formed by partners, has to be taken by either or survivor partner(s).
The next form of business entity Limited Liability Partnership or LLP, which is a more structured and legalized form of partnership with limited liabilities to directors. A limited liability partnership allows the partners to be protected from any negative issues that arise because of other partners. An LLP limits the liability of the partners to as much as their contribution to the company. An LLP incorporation is also cheaper and easier to get.
The most widely accepted form of company is Private Limited Company or PLC which requires you to have a minimum of one more partner, termed director here. It is most preferred because it gives freedom of liability to the directors or members up to the limit of their share capital. It is accepted because of this form of business allows you to accept external funding as well as rolling out ESOPs or Employee stock options.
PLC is required to manage several compulsory compliances along with conditional compliances, regulated by either Registrar of Companies (ROC), Ministry of Corporate Affairs (MCA) or several other Taxation and Regulatory of Government of India.
Frantiger assists you with the management of these compliances easily, while you can focus upon your business.
The bigger form of company can be a Public limited company. There are Section 8 and Nidhi companies that carry forwards the bigger group or conglomerate that benefits a large section of society. Specific Producer Company is for agricultural or producers’ group.
Connect with Frantiger now to start your company.