Last Updated on February 27, 2026
Thinking of starting a new venture or project? Want to become an entrepreneur? Well, as much as it sounds exciting, it is crucial that you choose the right path from the beginning. The foremost step in starting any new venture is to understand what kind of entity you want to establish and the key implications of that choice. Confused about how to start, what to start, and what exactly the compliance is. You have landed on the right page. This article will cover all your queries on whether you should run a business or a company.
There are many forms of an entity, viz., sole proprietorship, Limited Liability Partnership, Public Limited Company, Private Limited Company, partnership, etc. Choosing the right entity is most crucial as it forms the foundation of your venture.
All About Business
What is a business?
When any individual or group of individuals offers products and/or services to customers, intending to make a profit, it falls under the purview of business. Businesses may vary in size, complexity, legal structure, and/or goal/purpose of starting a business.
Who can run/start a business?
Any person who can come up with an idea or product and is ready to take risks for rewards can start a business. Individuals like sole proprietors, homemakers, students, freelancers, and self-employed persons can run businesses.
Types of business
When you start a business, the choice of the entity plays a crucial role in understanding legal complexities. It is always important to choose the right legal entity to successfully run the business. If you are a small enterprise or want to run a small-scale business, or are a professional, or running a service-based business:
- Sole proprietorship
- Partnership
- Limited liability partnership
What are the major requirements to start a business?
- A detailed plan outlining the business model and market research
- Choosing the right entity
- Obtaining the necessary tax identification
- Securing funds through self-funding, bank loans, or investors.
- Opening a dedicated current account
- Licensing & Permits.
- Intellectual Property
All About The Company
What is a company?
A company is a body corporate, having a separate legal entity from its owners, governed by specific laws and regulations. A company is legally entitled to enter into its own contracts, own property, and has its own rights, duties, and obligations. It is distinct from its owners and has its own seal.
Who can start a company?
Any individual who is a resident of India and above 18 years of age can start a company. In the case of foreign companies, it is mandatory that one of the directors is a resident of India.
Types of companies
There are five major types of companies:
- Private limited company
- Public limited company
- One-person company
- Foreign Companies
- Not -for-profit companies (Companies under Section 8)
What are the major requirements to start a company?
- A company name that is approved by the ROC
- Company seal
- Pan and addhar of directors
- Digital signature certificate
- Director Identification Number
- GST, TAN, professional Taxes, Import Export Code
- Licenses
- Certificate of incorporation
- MSME registration (if eligible)
- Current account
- Any other requirement under the law
Key Differences Between a Business and a Company – (Business vs Company)
| S.no | Particulars | Business | Company |
| 1. | Legal entity | No separate legal status. Business is known by its owners | The company has a separate and distinct legal entity with its own rights and obligations |
| 2. | Liability | Unlimited liability. Individual assets can be used to clear the debts of the business. in case of LLP, the liability is liability. | Limited Liability. Individual assets are not used to clear the debts and liabilities of the company. |
| 3. | Taxation regime | It is personal in nature. Personal tax returns are filed | A company has its own tax identity. Separate tax returns are filed. |
| 4. | Perpetuality | A business runs until the life of the owner. If the owner dies, then the business ceases to exist. It can of partnership, death, or retirement of one of the partners that calls for restricting the partnership. | A company has perpetual existence. Men may come and go, but the company goes on forever. |
| 5. | Capital requirements | Personal savings or loans are used to raise capital | The company has the option to raise capital by issuing shares attract foreign investments to fund their growth. |
| 6. | Legal complexities | Business does not involve many legal complexities and is manageable. | Companies have to follow complex legal compliances and cannot afford to miss any one of them, as it can incur penalties. |
| 7. | Set-up costs | Lower set-up cost as compared to other companies. | A company involves higher set-up and running costs due to formalities in establishing a legal entity. |
| 8. | Control | Business owners have control over the day to day managing of the business | Directors and shareholders are responsible for managing the day-to-day operations and decision-making. |
How can Kanakkupillai Help You?
At Kanakkupillai, our expert team aims to assist small business owners and big companies, from entrepreneurs and foreign companies, whether public, private, or One-person companies, in setting up their businesses/companies, ensuring all relevant legal regulations are met. We provide all the legal, statutory, regulatory, and practical support needed for smooth and easy business formation in India.
Conclusion
Whether you are an Indian entrepreneur or an NRI, compliance is the backbone of your business strategy. Moreover, compliance fosters trust among customers, banking institutions, and investors. Legal compliance further safeguards you from incurring penalties and fosters a reputation in the market.
Frequently asked questions
1. How much does it cost to set-up business in India?
It varies from business to business. Based on the compliance requirements costing for set-up may differ. For a private limited company, the registration fee is around ₹8,000–₹15,000. You can consult business experts for more information.
2. How long does business setup in India take?
A company can be registered in around 7-10 working days with the proper documentation.
3. I am an NRIs and I want to set up a company in India. Can I do so?
Yes, you can set up subsidiary offices, liaison offices, or branch offices. All you need to adhere to are the RBI and FEMA guidelines.
4. Why should I hire business setup consultants in India?
To assist you with compliance and help you save time and avoid unnecessary mistakes that can cost you a fortune
5. I want to start a company, but I want to do it alone. Am I allowed to start such a company?
Yes, it is possible. A new corporate structure was incorporated in the year 2013 called “One Person Company” that allows a single person/promoter to manage a company.
