According to the 2013 Companies Act, businesses are categorized according to their membership. The Micro, Small, and Medium Enterprises (MSME) Act divides businesses into micro, small, and medium enterprises to provide them with MSME advantages. Additionally, companies can be classified based on their control, listing status, and membership. Below is a breakdown of the various business categories, organized by different criteria.
Under Indian law, several types of companies are recognized, including Private Limited Company, Public Company, Sole Proprietorship, One-Person Company, Partnership, and Limited Liability Partnership (LLP). A Private Limited company is the most preferred form of business. Two people can form it.
A Private Limited Company can be of three types: i) a company limited by shares, ii) a company limited by guarantee, and iii) an unlimited company. A private limited company is a type of company that has a minimum of two members and a maximum of 200 members. A Private Limited Company Registration is the most popular form of business entity in India among startups, primarily due to its ability to issue shares to potential investors.
There are Various Forms of firms., Some of the Company Types in India:
- Private Ltd Company
- Public Ltd Company
- Unlimited Company
- Sole Proprietorship
- Joint Hindu Family Business
- Partnership
- Cooperatives
- Limited Liability Partnership (LLP)
- Non-Government Organization (NGO)
- One Person Company (OPC)
- Foreign Company
- Holding Company
- Producer Company
- Nidhi Company
- Section 8 Company
1. Private Limited Company
- Confines the privilege of the shareholders to exchange their shares.
- Has at least two and is the most extreme of 50 individuals.
- Does not welcome open to subscribing to its offer of capital
- Must have a base paid-up capital of Rs. 1 lakh or a higher sum, which may be endorsed from time to time.
2. Public Limited Company
- It permits the shareholders to exchange their shares.
- Has at least seven individuals, and for most extremes, there is no restriction.
- It welcomes the overall population to subscribe to its shares.
- Must have a base paid-up capital of Rs 5 lakh or such a higher sum as may be recommended from time to time.
3. Unlimited Company
An unlimited Company is a type of business association under which the risk of every individual is unlimited. The individual resources of the individuals can be utilized to settle their obligations. An unlimited company can re-register as a constrained organization under section 32 of the Companies Act.
4. Sole Proprietorship
A sole proprietorship is a type of business structure in which a single individual handles the entire business. He is the sole beneficiary of all benefits and the conveyor of all losses. There is no different law that administers sole proprietorship.
5. Joint Hindu Family
A joint Hindu Family is a type of business association wherein the individuals from a family can only own and operate the business. Hindu Law administers it.
6. Partnership
The partnership is “the connection between persons who have consented to share the benefits of the business carried on by all or any of them, representing all”. It is represented by the Indian Partnership Act of 1932.
7. Cooperatives
Cooperatives are a type of intentional association wherein individuals cooperate to advance the interests of their members. There is no limitation to the passage or way out of any part. It is represented by the Cooperative Societies Act 1912.
8. Limited Liability Partnership
Under LLP (Limited Liability Partnership), the risk of no less than one part is unlimited. However, the rest of the individuals have restricted obligations, limited to the extent of their commitment to the LLP. Unlike GenUnlikens, this type of organization does not end with the demise or insolvency of the limited partners. It is represented by the Limited Liability Partnership Act of 2008.
9. Non-Government Organization
NGOs undertake and execute projects to promote the welfare of the community they work with. They address various concerns and issues prevailing within society. NGOs are not-for-profit bodies, which means they do not have any commercial interest.
10. One Person Company
An OPC is a type of private limited company with only one shareholder. It is ideal for small businesses that want to limit their liability and maintain complete control over their operations.
11. Foreign Company
A Foreign Company is a company that is registered outside India and has established a place of business or a branch office in India. It is governed by the laws of its home country and the laws of India.
12. Holding Company
A Holding Company is a type of company that holds the shares of other companies, known as a subsidiary. It provides strategic and financial support to its subsidiaries but does not engage in their day-to-day operations.
13. Producer Company
A Producer Company is a type of company that is registered by farmers, artisans, or other rural producers. The primary objective of a producer company is to improve the income and living standards of its members.
14. Nidhi Company
A Nidhi Company is a type of company that is registered to accept deposits and lend money to its members. It is similar to a mutual benefit society and is ideal for small savers.
15. Section 8 Company
A Section 8 Company is a non-profit organization that is registered for charitable purposes, such as promoting science, education, religion, art, social welfare, or any other useful purpose.
Kanakkupillai.com helps convert a proprietorship into an LLP, a Partnership into an LLP, a Private Limited company into an LLP, etc. It also aids in accounting and Auditing. Furthermore, it can adjust the business accordingly and, if necessary, close it.
