When you are looking to run a business in India, it is an absolute necessity that you register your company before you actually start out any kind of business activity. Before you register an entity in India, it is important that you choose the right kind of entity structure that is applicable for your business as it can determine other actions that you need to perform in relation to your enterprise. The appropriate business structure is going to let your enterprise function efficiently while at the same time making it easier for you to enhance your business profits. Choosing the right entity structure can also help you to be compliant with the mandatory regulations.
Here is a look at the various types of businesses that are applicable in India.
One Person Company or OPC
If you are a single owner or promoter, then you can choose the One Person Company or OPC option. It is ideal for anyone who is the sole owner of a company who is looking to run a company and also be an integral part of a corporate framework.
Limited Liability Partnership or LLP
With an LLP or a Limited Liability Partnership, the liabilities of the partners remain limited only to rules pertaining to their agreed contribution.
Public Limited Company or PLC
A PLC or a Public Limited Company can be described as a voluntary organization of members that is incorporated or defined under company law. The PLC has got an independent legal existence. The liability of all of its members is restricted to the shares that they hold.
Private Limited Company or PLC
A business enterprise is said to be Private Limited Company or PLC when it is regarded as a wholly separate entity from the founders. This is something that happens when the company is considered as an entity that is separate from its directors or company officers and shareholders or stakeholders. Each and every individual is considered to be an employee working for that company.
It is extremely important that you give much thought to the structure of your company when you are looking to do business in India as this can help you to manage your income tax returns and all the documentation pertaining to it. You should also keep in mind that every type of business organization has a distinct set of rules that they need to be compliant with.
The accounts that you manage for your company must be annually audited on a mandatory basis. It is necessary that you get an accounting firm that can offer you such accounting solutions as per the needs of your enterprise, if you cannot have in-house accountants and compliance professionals. By being quite clear from the very beginning as to the nature of your business firm, you ascertain which type of accounting methods you subject your enterprise to. Once you register your company under the rules and regulations applicable, you can start performing your business activities and focus on boosting your profits in the months and years to come.