Company registration is the foremost thing to do when you start your own business to ensure it runs smoothly without any disruption. There are specific rules and regulations applied when you register a company. These rules vary according to the different type of companies in India.
Types of companies in India
- Private Limited Company
- Public Limited Company
- One Person Company
- Companies Limited by Shares
- Companies Limited by Guarantee
- Unlimited Companies
- Royal Chartered Companies
- Statutory Companies
- Incorporated Companies
We categorize different types of companies in India in three different categories.
Different categories of companies
1. Types of companies in India based on the number of members
2. Types of companies in India based on the liability of members
3. Types of companies in India based on the mode of incorporation
These are the company types in India, which can be further subcategorized. Now let’s discuss how different type of companies in India are subcategorized based on your startup.
Number of members
Private Limited Company
- It needs a minimum of two directors and two shareholders.
- Organized by a closed group and does not invite other members in it to share capital.
- The death of any member in a company does not affect its existence as both company, and members exist separately.
- Personal property of any shareholder in a private company is not at risk in case liquidation happens as liability is limited.
Public Limited Company
- There should be three directors and a minimum of 7 shareholders in a public limited company, but no limit of members in a public limited company is there in this types of company in India.
- Shares are offered to the general public.
- Public limited companies are the types of company in India which we list in share markets.
One Person Company
- A single person runs this type of company, and entrepreneurs favor it the most.
- It was introduced back in 2013 by the Companies Act, and the small business owners were benefited most from this Act.
- No losses are needed to be recovered from personal assets if the company liquidates in these types of company in India.
Liability of members
- No member is liable to pay more than a certain amount of shares decided. The company makes a contract with a certain amount discussed on which a shareholder is not liable to pay when called.
- Most of the private limited companies out there fall under this category.
Companies Limited by Guarantee
- The company is liable to pay a certain fixed amount to the shareholders in case of liquidation occurs.
- The assets of the company are divided equally between the shareholders in case the company goes bankrupt.
- The risk factor in this type of company is extremely high.
- If liquidation occurs, members are liable to pay even from the personal assets that they have.
- It is the most uncommon type of company, as the risk factor here is too high.
Mode of incorporation
Royal Chartered Companies
- These type of companies in India are the least as the Royal charters(King & Queens) control them.
- One example of these type of companies in India is East India Company.
- Royal Charter Companies are still out there, such as the Bank of England comes under this types of company in India.
- These types of companies in India are liable to carry specific business for the nation.
- The state or center applies certain specific guidelines.
- One example of these types of companies is the Reserve Bank of India.
- Companies that are incorporated by the Companies Act come under this category.
- They only exist when they register under this Act.
- One example is Google India in the types of companies in India.
These were the different types of companies in India.
How to register a company in India?
You can register your company in 4 easy steps. You need to acquire
- A Director Identification Number (DIN)
- A Digital Signature Certificate(DSC)
- Registration on MCA Portal
- Certificate of Incorporation
To register your new company, you need to apply to the MCA (Ministry of Corporate Affairs) with all these documents.