Registration Services
The company registration process in India, which is carried out online via the Ministry of Corporate Affairs (MCA) portal, is very straightforward. Different steps must be taken to register a corporation in compliance with the Companies Act, 2013.
Registering Private Limited Companies – A precise overview
A Private Limited Company Registration is one of the most cited legal frameworks in India for businesses and gives an entrepreneur added benefits as a company could enter into contracts on its own name, thus securing the owner’s personal assets from business liabilities.
Benefits of Registration of private companies in India
- The company can have a minimum of two members and a maximum of fifty members.
- Directors / Shareholders have minimal creditor liability.
- If there is a default, the banks or creditors can only demand the assets of the sell-off company, not the owners’ personal assets.
- Loans could be obtained under the business name.
- It is recognized as a legally distinct entity.
- Tax benefits are granted access to the company.
- The control to hold and dispose of the property is with the company right from the time of establishment.
- Creates goodwill for the company.
- Global scope.
- Set up a framework for suppliers, vendors, manufacturers, and consumers to deal with.
- A company that is registered may sue or may be sued on its own account. The entrepreneur’s name will not be used here.
- By getting into a corporate atmosphere, it is easy to differentiate one company from another.
- In order to make an investment in the company, you could raise funds from the general public.
The Public Limited Company is an entity to be distinguished from a private limited company. The obligation for a public limited company to have a certain number of shareholders and directors is compulsory. The minimum number of shareholders and directors of a public limited company is Seven and Three, accordingly. Expert advice is needed for any person going through the public limited company registration process. It is therefore important to obtain assistance for the registration of a public limited company.
Overview of the Registration of Public Limited Company
A public company is an entity that has its shares listed on a public stock exchange. An individual going for public limited company registration must differentiate the meaning. Public companies can go for secondary offerings based on the requirements. These offerings can only be given to a particular class of shareholders known as preference shareholders. Some examples of public companies would include Biotechnology Companies and Information Technology Companies. These companies usually raise capital through primary and secondary issues, apart from securing regular profits. The minimum paid-up share capital is prescribed as per the requirement of the companies act.
Why Registering Public Limited Company is Beneficial?
- Shares are legal documents that can be transferred subject to the Indian Contract Act, 1872. Under the Companies Act,2013, these instruments can be easily transferred with minimal compliance requirements. Apart from this, the listing of securities in a stock exchange makes it easier to migrate shares from one group to another.
- In the eyes of the law, public companies are reputed to borrow money from banks and other financial institutions. An added benefit of becoming a public company would provide company recognition.
- The concept of a distinct legal entity is extended to directors and shareholders (members) of a public limited company. This ensures that the responsibility of members and directors is limited to a defined amount. In the event of any debt owed by the public company, the creditors cannot contact the members.
- Shares of a public company can be listed on the stock exchange. However, the compliance of the public company with the listing of its
shares in the stock exchange must be followed. The public corporation could obtain secondary finance through this method. Therefore, the applicant must accept the above in respect of the registration of a public limited company.
Section 8 Registration of companies as it offers significant advantages such as tax benefits, no stamp duty for section 8 Registration of companies and offers more credibility.
What is Company Registration in India for Section-8 (Non-Profit Organisation)?
An NGO can be registered under the Companies Act 2013 as a Section 8 company or as a trust under the Trust Act 1882 or as a society under the Societies Act 1860. The process of incorporation of an NGO under the Companies Act 2013 is Section 8 Company Registration.
To promote Art, Science, Commerce, Technology, Sports, Education, Social Study, Social Welfare, Religion, Charity and Environmental Conservation, etc., a Section 8 company can be registered. After successful completion of the registration process, a Section 8 company can operate anywhere in India.
Benefits of Registering Section 8 (NGO/NPO) Company
There are some benefits to register an NGO or NPO under Section 8 of the Companies Act 2013. Some of these areas below:
- No minimum capital: there is no minimum capital provision under Section 8 Company Registration in India.
- Tax Benefits: There is a range of tax benefits for Section 8 Company Registration in India.
- No Stamp Duty: No stamp duty shall be levied on the incorporation in India for Section 8 Company in so far as it is incompatible with the provision of payment of the stamp duty of the private limited company in respect of the MoA and AoA.
- Separate Legal Identity: There is a separate legal entity for the Section 8 company registration. It obtains from its members a distinct legal identity.
- Credibility: Section 8 company has greater credibility than any other form of a charity organization. It is under the strict provisions of the Companies Act, which every year requires a compulsory audit.
- Exemption to the donators: In accordance with Section 80G, the exemption is granted to donors if the company registered under Section 8 is registered under Section 80G.
Nidhi Company is a type of entity engaged in financing activities. The method of registering Nidhi is smooth and requires less time and effort. When this company is established, it is registered as a Non-Banking Financial Company (NBFC). It is therefore essential to file compliance with the Ministry of Corporate Affairs (MCA) when registering such a company. Anyone wishing to join the financing business may select this framework. Although the process of registering this entity is easy, the use of professional services by a consultant would be advantageous.
Overview of Nidhi Company Registration
With the primary purpose of providing funds, the government of India has developed this type of business structure. To lend funds to the public, individuals use this entity. In India, Nidhi companies are mainly popular in Southern states.
The process of registering a Nidhi company is iterated under section 406 of the Companies Act 2013. There are many advantages to incorporating this form of entity when it comes to the development of savings. Apart from this, the members of the company can understand their needs and requirements related to finance.
Benefits of Nidhi Company Registration
- Easy Lending: Under section 406 of the Companies Act, 2013, this form of entity is constituted as a mutual benefit society. As a result, the advantages are solely for the members or shareholders of the entity. Apart from this, loans can easily be made available to the public through this type of entity.
- Easy to Form Management: An applicant wishing to set up a Nidhi company may select a group of members to carry out this procedure.
After this entity is created, there will be no external management involvement. - Less Capital Requirements: There is a minimum capital requirement to create this entity. The primary reason for this type of registration is minimal capital requirements.
- Raising Funds is Simple: The primary aim of this type of entity is to collect funds from the public. Apart from that, the Nidhi entity is established as an NBFC. This form of NBFC carries out tasks such as taking public deposits. It is therefore easy to raise funds through this type of entity.
- Less Compliance to Adhere: Since the formation of this entity is based on compliance with the Companies Act, 2013 there is still less compliance relative to other types of entity. Even under the RBI Act of 1934, this company is exempted from conducting various forms of compliance.
- Benefits of Status Under the Companies Act, 2013: This type of entity would have the advantages of the Companies Act, 2013. As a regular entity, this type of entity will guarantee the status of limited liability. Apart from this, the status of this type of entity is independent of the members and directors.
- Less RBI Involvement: These types of organizations must comply with the requirements of the NBFC. The enforcement of the Nidhi entity must therefore be ensured in accordance with the guidelines of the RBI. However, these entities are excluded from the strict provisions of the RBI Act, 1934.
- Options for Saving and Mutual Benefits: A Nidhi entity was developed solely to increase the savings of its members. Also, according to section 406 of the Companies Act 2013, these companies are known as mutual benefit companies.
- Better as compared to credit society: Credit societies are governed by the rules of the Societies Registration Act. There are more conditions for compliance in the establishment of a credit society. As a result, individuals opt for a Nidhi company as there is less compliance.
- Risk is Less: Compared to the conventional NBFC or any other organization engaged in financing activities, the amount of risk borne by the Nidhi entity is less. Under the terms of the Companies Act, the members of these entities are secured by limited liability status.
Starting a One Person Company is an easy operation. The rules for the registration of a company with one person are laid down in the Companies Act, 2013. There are several benefits to one individual registering a company. Some of the privileges that can be gained by a person include a separate independent entity, limited liability, limited enforcement, and a separate legal entity. Obtaining a registration for a company of one person requires specific compliance. However, it is reasonable to choose expert advice for your one-person company registration.
One Person Company Registration (OPC registration) – An Overview
Until enacting the Companies Act, 2013, the Company Law Committee found numerous criteria for entrepreneurs and sole proprietors. As members of a private limited company or a Limited Liability Corporation, the interests of sole proprietors are not covered. Because of this, a new framework called one person company (OPC) was implemented by the Companies Act, 2013. This business entity has special characteristics that are enjoyed by a private limited company. At the same time to run a one-person company, only one person is needed. The potential expansion of a one-person company is not necessary. Therefore, entrepreneurs who choose to continue the company as a sole beneficiary usually use this type of business structure.
Advantages of One Person Company
- Limited Liability: There is just a single shareholder and director in an OPC. Limited liability may be understood as, to a certain degree, the liability of shareholders and directors is limited. Therefore, creditors can not claim any personal assets if there are any conflicts relating to a debt owed.
- Separate Legal Entity: The existence of a separate legal entity is another benefit of using the type of entity. The independence of a shareholder and director would mean a separate legal entity.
- Sole Individual: The idea of a single director and shareholder (member) is one feature that is enjoyed by an OPC. Under this type of entity, an individual takes two hats. To comply with the Companies Act, 2013, there are no extra obligations or added responsibility associated with hiring other directors.
- One Director: Under the Companies Act, 2013, according to the OPC concept, there is only one director who manages a one-person company’s business. As required for public companies, there is no requirement for any sort of independent director or executive director.
- One Shareholder: For a one-person company, a single member is required. The shareholder would then carry out tasks, such as overlooking the OPC’s affairs. The member will also serve as a director in addition to this. One of the roles of the OPC director and shareholder is to manage the OPC.
- Less Compliance: The amount of compliance required for a one-person company is limited as opposed to a private limited company or a public limited company. It takes less time for such compliance to be carried out. Less compliance means less paperwork and procedures involved in the registration of a one-person company.
- More Transparency: In contrast to other categories of business entities, filing compliances are straightforward for a one-person company. Another added benefit of creating this entity is the increased level of transparency in dealing with various levels of government. It is possible to achieve transparency on both sides i.e. on the applicant and government sides.
- No Disputes: There are distinct arrangements, such as the LLP arrangement and the shareholder agreement, when it comes to partnerships and private limited companies. There is no provision for any agreement under the one-person company incorporation process, as only one person performs all the activities of the business entity.
- Advantageous for specific sectors like MSMEs and SMEs: For sectors such as MSMEs and SMEs, OPC registration is indeed beneficial. The flourishing cause of MSMEs and SMEs is the various businesses in rural areas. Services can be conveniently distributed to rural areas by using the OPC registration process.
If an LLP reaches the annual turnover of Rs.40 lakhs or a capital investment of more than Rs.25 lakhs, the LLP and Private Limited Company’s compliance conditions become almost identical, making it a better option for the private limited company.
Conversion of LLP into a Private Limited Company – An Overview
Due to many variables, LLP registration has increased in India. Small companies who do not feel the need to collect funds are small businesses opting for LLP Registration. For many factors, these small businesses need the conversion of a private limited company. In compliance with the provisions specified in Section 366 of the Companies Act, 2013, and the Company (Authorized to Register) Rules, 2014, conversion of an LLP into a private limited company may be carried out.
The requirements that must be fulfilled for converting an LLP into a Private Limited Company, such as:
- The LLP has to have a minimum of seven partners.
- The conversion must be accepted by all the partners.
- Advertisements in local and national newspapers must be published.
- No Objection Certificate (NOC) from ROC must be issued at the place of registration.
- And the entire process of integration must be done.
For existing companies to move from one form of company to another the conversion of an LLP into a Private Limited Company could be feasible. The conversion process is a step-by-step process, which is a technical process, but you can save both time and money with the aid of professionals at MS Advisory.
The need of the hour is corporatization. Without any trade barriers between countries, the entire world is increasingly drifting into one global economy. Without corporatizing itself a tiny unincorporated company headed by a few partners will not think of development on a wide scale. The company has its benefits, such as limited liability, perpetual succession, equity transferability, quick access to funds, etc.
Conversion from a Partnership Firm to Company-An Overview
The key advantage of private limited company registration is that it offers a distinct legal entity status that a partnership corporation does not have. In the case of a partnership, the personal assets of a partner are attached and they will be held directly liable for each and every debt or liability incurred by the company. Therefore with business growth, if partners wish to increase their reputation and impose limited liability on their members, it is more favorable for partners to turn their partnership into a limited private company. Since a private limited company’s statutory compliance is higher than that of a partnership firm, it allows the company more possibilities to grow and extend its scope.
The requirements necessary for the conversion of a partnership firm to a company is as follows:
- Licenced partnership company with a minimum of 7 partners.
- The minimum share capital for conversion into a Private Limited Company is Rs.100,000 (INR One Lac).
- For conversion into a Public Limited Co., the minimum share capital isRs.500,000 (INR five Lac).
- If the above condition is not met by the firm, then the partnership deed should be altered.
- Minimum of 7 shareholders.
- The minimum number of directors is 2 (for Private Limited Co.) and 3 (for Public Limited Co.).
- The directors and shareholders may be the same person.
- DIN (Director’s Identification Number) for all directors.
- DSC (Digital Signature Certificate) for two directors.
It could be possible for big firms to switch from one type of business to another by turning the Partnership Firm into a Private Limited Company. The conversion process is a step-by-step process, which is a technical process, but you can save time and money with the help of professionals at MS Advisory.
Contact us for discussion.
Contact us for discussion.
Special organizations that benefit from a traditional partnership and a private limited company are limited liability partnerships (LLPs). The limited liability status of a limited liability partnership is shared by the partners. The method of registering limited liability companies is straightforward. It is, however, important to get assistance for LLP registration in India from a third-party.
Overview of Limited Liability Partnership Registration
Limited Liability Partnership is generally known as LLP. This is a special type of business structure that has the characteristics of a conventional partnership. The advantages of limited liability are enjoyed by the LLP partners. This category of the organization is intended for law firms, accounting firms, private equity, venture investors, architects, and real estate firms.
Advantages of Limited Liability Partnership Registration
An applicant going for Limited Liability Partnership registration will enjoy the following advantages:
- Limited Liability: Limited liability is one of the key benefits of going for limited liability partnership registration. If the debts are not paid, partners under this type of business arrangement will not have any problems. Because of the principle of limited liability, creditors are unable to claim the partners’ personal assets for the debt owed by the LLP.
- Benefits of Traditional Partnership: The benefits of a traditional partnership are another advantage that is enjoyed by this type of business entity. For example, for this type of entity, there is minimum compliance that is carried out.
- Ownership could be transferred easily: Unlike other types of business entities, it is possible to quickly transfer ownership of an LLP. Therefore, people tend to apply for a limited liability partnership.
- Separate and Independent Legal Entity: The concept of a distinct and independent legal entity is one of the factors making this business entity interesting. These advantages can be enjoyed by the company’s partners.
- Everlasting Succession: This will mean that the LLP will remain until and until it is closed by an order or direction of a regulatory authority once the relationship is established.
- LLP Agreement and Conflicts: One value that is gained by those who apply for limited liability is that conflicts can be treated properly. Much as a private limited company shareholder agreement is drawn up, an LLP agreement is drawn up for a limited liability partnership entity. Through this agreement, it is easy to settle any sort of conflicts that occur between partners.
- Minimum Compliance: In contrast to other categories of business entities, minimal compliance is needed for an LLP. For instance, for the Limited Liability Partnership Registration, there is no minimum amount of capital required. Aside from this, there is no provision for an audit to be carried out. However, this condition is only relevant if the LLP’s annual revenue is less than 40 lakhs and 25 lakhs respectively.
Overview of Conversion from Company to LLP
Limited Liability Partnerships (LLP) have been emerging since the implementation of the Companies Act 2013 as a type of business entity that enables individual partners to be free from the principle of joint liability of partners in a partnership firm. LLPs are an ideal form of business as an alternative corporate business vehicle that offers the advantages of limited liability of a company and provides its participants the freedom to coordinate their internal management based on a mutually negotiated arrangement, as is the case with a partnership firm.
A registered limited company in India (Private or Public) has many complex formalities and incurs additional management expenses, including mandatory board meetings, managing of statutory records, filing of MCA e-forms, etc. Absence of such Terms of Reference for LLP
combined with advantages such as non-applicability of dividend distribution tax on repatriation of income, transfer of profit rules, and deemed dividend profit issues, MAT provisions, and many more.
LLPs thereby require the best practices of private companies and as such preserve the rights of partners, allowing them the right to decide on the company’s norms. In a nutshell, it blends the best aspects of different types of companies.
Key Requirements for Conversion of Company to LLP are as below:
✓ Every member of the company must understand and agree with the decision to convert.
✓ All members become LLP partners and no one else.
✓ The latest copy of the income tax return must be filed with ROC.
✓ Not only the members but also all the creditors of the company must consent to the conversion.
✓ Under the Companies Act, no investigation could have been conducted in the procedure to be followed.
✓ There should be no open (unsatisfied) charges against the firm.
✓ At least one balance sheet and annual return had to be filed by the company since its incorporation.
✓ The company should have its share capital.
✓ The firm is not to be a ‘Section 25 Company’/’Section 8 Company under the Companies Act, 1956/2013.
The conversion of a Private Limited Company into an LLP may be feasible for existing businesses to switch from one type of company to another. The translation process is step-by-step and is a technical process, but with the assistance of MS Advisory professionals, you can save both time and money.
Limited Liability Partnerships take priority over the general partnership arrangement as it is much more advantageous to the partners involved. LLP is a separate legal entity with mandatory registration with the central government, which is not the case with the partnership. It is a business arrangement that combines the advantages of the corporate structure of the company and the versatility of the partnership, i.e. the organization of its internal composition and operation as a partnership.
Therefore the conversion of a partnership firm to LLP is a sound business decision to protect the interests of the partners and to limit their liabilities.
Requirements for Conversion:
✓ All partners of the partnership firm will become appointed partners of the new LLP and as a result, any who do not wish to remain an LLP partner should retire.
✓ Appointed partners who want to be an LLP partner should be added after the LLP has been established.
✓ All the appointed partners need to update their income tax returns.
✓ Digital Signatures should be added by all appointed partners.
✓ Any contributions should be made by all appointed partners.
✓ Every creditor should give their consent to convert.
It may be possible for existing companies to move from one type of company to another to turn a Partnership Firm into an LLP. The translation process is a step-by-step process and a technical process, but with the assistance of MS Advisory professionals, you can save both time and money.
Contact us for discussion.
The LLP Act contains enabling provisions under which a firm (set up under Indian Partnership Act, 1932) and a private company or unlisted public company (incorporated under Companies Act) would be able to convert themselves into LLPs. Provisions of clause 58 and Schedule II to Schedule IV to the Act provide the procedure in this regard.
Requirements for Conversion:
It has been provided in the Act that on the conversion of a firm/private company/unlisted public company into LLP, any approval, permit or licence issued to the firm/private company/unlisted company under any other Act shall, subject to the provisions of such other Act under which such approval, permit or licence was issued, be transferred in the name of converted entity viz LLP.
Benefits
- Easy to Form and Dissolve
- Less compliance requirement as compare to Company
- Low cost of registration and maintenance
- Profit is not taxable in the hands of Partners
Partnerships are, along with companies, one of the first types of business structures in the world. This structure is commonly used by all the countries of the world. In India, the Indian Partnership Act of 1932 governs partnerships. This business structure is one of the easiest to create, as compliance is less necessary. It is nevertheless helpful to consider expert guidance on the registration process of the Partnership Firm. A partnership Firm can be set up online.
Partnership Firm Registration Overview and Benefits
Partnership agreements have been used by different forms of organizations around the world. Much before the 1900s, this structure proved its usefulness. As companies grew, this type of business structure arose prominently intending to establish an agreement or relationship between two or more individuals.
The popular features of the partnership make it possible for two or more individuals to share profits at the same time as managing the company. The partnership-related business structure may be carried out either individually by one partner or by both partners working for the common intent of the business.
A conventional partnership is formed based on a legal agreement under the Partnership Act, 1932. All compliances must be followed when this type of business structure is formed. Typically, start-ups and emerging companies are part of this type of business entity. It is therefore important to consider all the factors for the registration of a partnership company.
Prominent organizations around the world are utilizing the meaning of the partnership. Hewlett Packard, for example, was founded as a partnership effort and is one of the leading organizations in the world. It would also be useful for individual partners to register for a partnership company registration.
Types of Conversion
- From Company to Partnership Firm
- From LLP to Partnership Firm
- From Trust to Partnership Firm
- From Other form to Partnership Firm
Contact us for Discussion.