Different types of company registrations in India

A company registration is an incorporated association of persons created under any law to carry on the laid down objectives. It may be formed under an act by Parliament or under any company law. It has a perpetual existence that means the existence of the company can be terminated only by law. It is a separate legal entity different from its owners and members. Following is the list of the different types of company registration that exist in India:

• Types of Companies registration on the basis of Subscription:
• Private Company registration: It is the most popular form of the company registration in India. The minimum number of people require to set up private company registration in India is 2 and the maximum can be 200. This form of company registration has many benefits such as no minimum paid-up capital requirement, no interference of public or government, no requirement for the issue of prospectus. Also, it is mandatory to use Privately Limited at the end of the name of the company registration.
• Public Company registration: A Public company registration is one in which a minimum of 7 persons are required and there is no limit on the maximum number. Such companies can issue shares to the public and the government can interfere in such companies. Such companies can be listed in the stock exchange markets. It can attract funds from the public through Initial Public Offering(IPO).
• One Person Company registration: It is a form of the company where one person registration is the owner of the company, introduced by Companies Act 2013. It is a narrowed version of Private Ltd Company registration and is suitable for small businesses. There are fewer complications and more relaxation. The name of the OPC company registration must include a “One person company” and the owner must appoint a nominee to act on his behalf.


• Types of Companies on the basis of Origin:
• • Domestic company registration: Any company that is formed in India is known as a domestic Company. These companies have much more relaxed that the companies that are registered abroad.
  • Foreign Company registration: Any company that is incorporated outside India whichHas a place of business in India whether by itself or through an agent, physically or through an electronic mode. Conducts any business activity in India in any other manner.
  
  
• Types of Companies on the basis of Status:
• Small Company registration: Any company whose paid-up share capital is less than 50 lacs or such higher amount as may be prescribed which shall not be less than Rs. 5 cr. and turnover doesn’t exceed 2 cr rupees or such higher amount as may be prescribed which shall not be more than Rs. 20 cr. is known as a small company. A small company cannot be a public company, holding or subsidiary company, section 8 company. There are different kinds of relaxations available for a small company.
• Dormant Company registration: when a company is registered for a future project or to hold an asset or intellectual property and has no significant accounting transaction, such companies are known as dormant or inactive companies.
• Holding Company registration: a company holds 50%equity in another company or controls the composition of the latter’s board of directors or controls more than half of its voting power is known as holding company.
• Subsidiary Company registration: it is the company in which the other company controls the Board of Directors or its more than half of voting power.
• Associate Company registration: A company in which another company has significant influence but which is not the subsidiary company of the company having such influence and also includes a joint venture company.


• Types of Companies on the basis of Liability:
• Limited Companies registration: In these companies, the shareholders have limited liabilities. It means that in case of insolvency of the company the personal assets of the shareholders cannot be used to pay off the liabilities. The liability of each member is limited to the unpaid face value of the shares held by respective members.
• Unlimited Companies registration: the shareholders of such companies have unlimited liability which means in case of insolvency personal assets can be used to pay off debts.
• Companies limited by Guarantee: in such companies, the liability of each member is defined in the Memorandum of Association of the company. The liability structure of such companies is a combination of the above two companies.


• Types of Companies on the basis of Incorporation:
• Statutory Company registration: Those companies that are incorporated under any law which doesn’t have a motive of earning profit but are registered with the service motive are known as Statutory Companies. Their books of accounts are audited by the Comptroller and Auditor General of India (CAG).
• Registered Company registration: All the companies that are registered under the Companies Act 2013 are known as Registered Company. They are subject to the provisions of the Act and are governed by the Ministry of Corporate Affairs (MCA). Almost all companies in India fall under this category.

We have covered different form of company registration which is one of the most popular form of business registration. Company has better brand image and give benefit of limited liability to its shareholders. With limited liability, liabilities of shareholders are only restricted to the money infused by the shareholders as capital. This encourages our young buddy investors to start their venture as company.

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About Author

CA Sundram Gupta is a Chartered Accountant and forensic auditor having 10 years of experience in the field of Auditing, GST, Income tax and Accounting. He has given consultation to distinct industries over these years.

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