Six Types of Company Registrations in India

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Six Types of Company Registrations in India

What is meant by Company Registration or Company Incorporation in India? Before answering the distinction, let us understand what a company really is. A Company is a registered business entity comprising two directors or more with its share of member-owners and shareholders. Such entities are formed per the Company Registration regulations under the Companies Act of 2014.

Company Registration vs. Company Incorporation in India

To answer the second question, Company Registration is a simple procedure to award a legal identity to a business. Company Incorporation, on the other hand, creates a separate entity with provided Limited Liability Protection, among other benefits. The Company Registration procedure can be thought of as a CRN or Company Registration Number acquisition procedure applicable in India. With registration, the Company has imparted a legal infrastructure to dispense its commercial activities.

In this article, we will discuss the types of Business Registrations in India. The Companies Act of 2014 has formalized multiple eligible business structures for interested Corporates to adopt. Each such structure offers some unique features which make it more plausible to be adopted by Businesses as per their commercial needs.

Types of Company Registrations in India

As per the Companies Act of 2014, the stipulated ordinance has effected six types of Company Incorporation in India, each taking a different approach towards the registration process. The different but prominent Company Registration types in India are:

• Private Limited Company or LTD Company
• Public Limited Company or PLC
• One Person Company or OPC
• Producer Company
• Nidhi Company
• Section 8 Company

Common Features of every Company Registration type in India

Every company registration applicant must know that Companies of every kind share some basic features because of their common legal structure. Let us see them one by one. 

Each Company is a Separate Legal Entity

A registered Company is a legal person. He has an identity distinct from its directors. After its incorporation, the Company gets its birth certificate in the form of a Company Registration Number or CRN. A Corporate can get such a birth certificate after the completion of its registration process. Such a procedure makes a Company a separate individual identity. 

Each Company limits its Member’s liability to their shares

The Company limits the liability of its members as well as shareholders & directors, to the losses incurred in their share subscriptions. Such an advantage safeguards the Company’s stakeholders from losing its personal assets if it files for bankruptcy or comes under huge debts.

MCA enables Share Transferability among Company members

In a Company, the shares can be transferred among its members without restriction. But such a transfer is only limited between its members and stakeholders. To offer shares to the general public or facilitate share exchange between the parties, the Company must go public. 

A Company can perpetually exist after its Stakeholders exit 

Many earlier corporate structures couldn’t stand the loss or withdrawal of a member or a partner from its arrangement, and they eventually will perish. But such is not the case with a Company Registration. Here, the Company’s existence isn’t bounded by its directors. Such company models can perpetually exist even after the Director’s demise or withdrawal from his or her position. 

With such common benefits, let us look at the distinct features of each Business Registration type in India. 

Distinct Features of each Company Registration Type in India

We have carefully listed the distinctive features of every Company Registration type in the following section, so read carefully. 

Private Limited Company or an Ltd. Company

• A minimum of two directors must be maintained for Ltd. Company registration
• A minimum of two members or shareholders must be maintained for Ltd. Company registration
• A maximum of 200 members or shareholders must be maintained for Ltd. Company registration
• The MCA puts no minimum capital requirement for Ltd. Registration in India

Public Limited Company or a PLC

• A PLC can open its shares to the general public
• A PLC applicant must maintain a minimum of 15 lakh rupees as a paid-up capital requirement for PLC registration
• Every PLC applicant must file for trailing its name with the term “LTD.” 
• A minimum of three directors must be maintained for PLC registration
• A minimum of seven members or shareholders must be maintained for PLC registration
• A PLC must maintain its annual prospectus at all times

One Person Company or an OPC

• An OPC is directed by a Single Owner 
• A nominee is required to be appointed by the Director in case of his or her demise or absence
• The MCA puts no minimum capital requirement for setting up an OPC in India
• Only one Director is mandated to run an OPC

Producer Company

• Company’s activities are limited to the production of agricultural produce
• The chosen Company name must be trailing with the words “Producer Company”
• A Producer Company can issue only equity shares
• A minimum of five directors must be maintained for Producer Company registration
• A Producer Company must maintain a General Reserve annually

Section 8 Company

• This model is specifically dedicated to Non-Profit Organizations Registration
• A Section 8 Company does not distribute its A dividend among its members
• Profits generated by Activities are spent on social welfare

Nidhi Company

• A Nidhi Company is formed to promote savings and thrift among its members
• A registered Nidhi provides short-term loans and deposit facilities to its members
• A Nidhi is restricted to engage only with its members
• A Nidhi facilitates term loans with minimum documentation

If you wish to register your Business as one of the aforementioned corporate types, you can connect with Incorporation Team at Registrationwala. Our Incorporation consultants can recommend the Business Types per your to-be-undertaken business activities. 

Also read:  What are the Documents Required For OPC Registration

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