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1. Private Limited Company

   By virtue of section 2(68) of the Companies Act, 2013, Private Limited Company is a type of company which offers limited liability with certain restrictions defined in regulations:

   • restricts the right to transfer shares
   • Limits the numbers of its members to 200
   • Prohibits any invitation to the public to subscribe for any shares in, are debentures of the company(No Public Trading of Shares)
   • Prohibits any invitation or acceptance of deposits from persons other than its member
   • The word ‘Private Limited’ must be added at the end of its name
2. One Person Company

   One Person Company popularly known as OPC introduced in India under the Companies Act, 2013. The concept of OPC is a fusion of sole proprietorship and private company which intends to permit single economic entrepreneurship to take the advantages of a corporate form of organisation.

3. Limited Liability Partnership

   Limited Liability Partnership is a corporate entity registered under Limited Liability Partnership Act, 2008. It is a form of partnership firm that enjoys limited liability. It is a hybrid form of a partnership that includes the features of a company. Compliances for a company are applicable to LLP.

Does one have to present physically to incorporate a business entity?

No, the whole incorporation process is online. You can send the scanned copy of all the required incorporation documents via e-mail. All the forms and documents are filed electronically and even signed digitally.

How to choose a name for a business entity to avoid rejection?

The company name should be selected with utmost care. The rules for selecting a company are:

• The name should be ended with the words "Private Limited" in case of private company, "OPC" in case of one person company and "LLP" in case of limited liability partnership which is mandated by law.
• The name must be unique.
• Follow the naming guidelines for better chances of approval.
• The name should be suggestive of the main objectives to be taken by the business entity.

What are the mandatory compliances after incorporation of a business entity?

1. Private Limited Company
   • Appointment of auditor
   • Statutory audit of accounts
   • Filing of annual return
   • Filing of financial statements
   • Holding Annual General Meeting (AGM)
   • Prepare directors' report
   • Filing of income tax return
2. One Person Company
   • Appointment of statutory auditor
   • Holding Board Meetings (BM)
   • Filing of financial statements
   • Filing of annual return
3. Limited Liability Partnership
   • Filing of financial statements
   • Filing of annual return
   • Filing of income tax return
   • Appointment of auditor
   • Filing of LLP annual return

Can a business entity register on the residential address?

You don't need a proper office to incorporate a business entity. You can register your residential address as a registered place of your business with MCA for which some address proof along with the NOC (No Objection Certificate) has to be filed with the prescribed form.

Can an NRI allow to incorporate a business entity in India?

NRIs only allowed to incorporate limited business entities in India including private limited company and limited liability partnership. Also, there is no requirement to obtain the prior approval from the government or RBI. But, in order to register a private company or an LLP at least one director/partner must be a resident of India. However, the private limited company is ideal for NRIs.

Which business entity is the most suitable for start-ups and why?

In order to execute the idea into a long-term business, choosing the right form of business is important. For start-ups, Private Limited Company is the best option for the following reasons:

• Limited legal compliances
• No minimum capital contribution
• Need only 2 directors and shareholders (both can be the same person)
• Funding can be raised
• Limited liability of the members

What is the minimum investment required to start a business entity in India?

As per the relevant Act, there is no minimum requirement for Paid-up Share capital or contribution to incorporate a private company, one person company or limited liability partnership. However, each shareholder/partner should subscribe to a minimum one share of Rs.10 face value.