Significance of Business Structure During a Company conformation in India

 Your income tax returns will rely on the business structure you choose, so be sure to do your research. When registering your business, keep in mind that there are many levels of compliance that must be completed depending on the business structure. A sole proprietor, for instance, is simply required to file an income tax return. However, a business must submit annual reports to the Registrar of Companies along with an income tax return.

An annual audit of a company’s books of accounts is required. Spending money on auditors, accountants, and tax filing professionals is necessary to comply with these legal requirements. Therefore, while considering company registration, it is crucial to choose the appropriate corporate structure. Entrepreneur needs to know exactly what kind of legal compliance they are willing to handle. For further information on company formation in India, read this article below!

Different Types of Business Structures

Public Limited Company

A public limited company is a legally recognized voluntary association of members. It has its own legal existence, and its members’ liability is limited to the number of shares they own. You can choose the best business structure for your needs and register your company accordingly.

Other business structures include partnership firms, Hindu undivided families, and sole proprietorships. Please keep in mind that these structures are not subject to company law. Hence, consider this point while learning about company formation in India.

One Person Company

An OPC, which was just recently launched in the year 2013, is the easiest approach to launch a business if there is only one owner or sponsor. It permits a lone owner to continue working while remaining associated with the corporate structure.

Limited Liability Company

A Limited Liability Company (LLP) is a distinct legal entity where the partners’ obligations are constrained to the amount of their agreed-upon contribution. The Limited Liability Act of 2008 requires the Registrar of Companies to create an LLP (ROC). So, keep this in mind while looking for a solution for your company law matters.

Private Limited Company

From the perspective of the law, a private limited company (PLC) is considered a separate legal institution from its founders. It has shareholders (investors) and executives (company officers). Every individual is considered a company employee.

Steps to Register a Company in India

Digital Signature Certificate

You need to submit the digital signature forms on the MCA portal because the process of company registration is conducted entirely online. DSC is required for all prospective officers, directors, and signatories to the articles of association and memorandum of association. A government-approved certifying authority can issue a Digital Signature Certificate. Hence, you can consider DSC as the first step of company formation in India.

Director Identification Number

The Director Id Number (DIN) is an identification number for a director that must be obtained by anyone who wishes to be a director in a company. The form of company registration requires that all potential directors of the company include their DINs as well as documentation of their names and addresses. A DIN can be obtained while filing the SPICe+ form, i.e., the company registration form.

Registration on the MCA Portal

To register for company registration via the MCA portal, you must fill out and submit the SPICe+ form. To complete the SPICe+ form and upload documents, the company’s director must first register on the MCA portal. After registering, the director will be able to log in and gain access to MCA portal services such as viewing public documents and filing e-forms. So, keep this in mind while looking for a solution for company law matters.

Certificate of Incorporation

The Registrar of Companies will review the application once it has been completed and submitted with the required documents. After checking the application, he will issue the firm’s incorporation certificate. The Certificate of Incorporation bears the PAN and TAN assigned by the Income Tax Department.

Author Bio

Here, the author discusses the importance of business structure while forming a company in India. He has been working for one of the best firms in Kolkata that deals with company and corporate law matters. So, if you want to understand this topic in detail, read the article below!