Paresh Sarda & Company
Chartered Accountants
BUSINESS REGISTRATION SERIVCES
For registration of business there are various options available. For example Proprietorship, Partnership, Pvt Ltd etc. Each of these formats have different advantages and disadvantages. It is therefore necessary to select a format which suits the entrepreneur.
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Below table gives major points of differences among different entities.
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Registration of Proprietary Firm:
A proprietary firm is the most used format for business registration in India. The reason is obvious as it is most simple form to register, with minimum legal compliance and costs. There are advantages to it, like flexibility, lower statutory compliance, reduced tax burden. At the same time it has disadvantages like unlimited liability.
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Requirements for Shop Act License:
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Following documents are required for obtaining a Shop Act license in Maharashtra:
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Copy of Aadhar card of proprietor.
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Copy of Pan Card of proprietor.
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Passport Size photo of proprietor.
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For address proof of business - If property is owned by proprietor: Index II / Tax Payment challan of property.
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If property is rented by proprietor: Copy of rent agreement.
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NOC from owner of property
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Latest Electricity bill
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One mobile clicked photograph of the proprietor - standing at the entrance of the business premises, with entrance and name board visible in the background. Name board can be simply printed on A4 size paper – it should also have name in Marathi.
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Number of employees.
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Weekly off day (Usually Sunday).
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Signature of proprietor
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Mobile Number & Email id of proprietor (this will be submitted to receive OTPs)​
Registration of Partnership Firm:
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A Partnership firm can be registered with minimum two partners. Partners can be Individuals, HUFs or any other legal person. There is no mandatory requirement of minimum capital contribution. This is an ideal option for these seeking to collaborate, come together, and work together. A partnership firm should be registered with the registrar of firms. A registered partnership firm will have the benefits of Partnership Act. A non-registered partnership will be governed by Indian Contracts Act.
Registration of LLP:
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A Limited Liability Partnership is a corporate form of partnership firm. It has corporate existence and at the same time it has lesser regulatory compliance as compared to a Private Limited company. A LLP is registered under the LLP Act. The Ministry of Corporate Affairs regulates the LLPs. A LLP is also required to comply with annual filing requirements of the Ministry of Corporate Affairs.
Registration of a Private Limited Company:
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This is the time tested and hence the most preferred format when it comes to corporate form of business. It also offer flexibility of adding or removing shareholders by way of Share Capital. This feature is used to infuse investment against equity share. If you are seeking to add more people as you grow, and with different rights and responsibilities this is the way to go. The Companies Act 2013 regulates the registration process. The Ministry of Corporate Affairs grants the registration to a Private Limited company.
Registration of Section 8 company:
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Earlier known as section 25 company, this is the not-for-profit format of company. Section 8 company is recognized across India and can undertake its activities anywhere in the country. It comes with tax benefits if the company is registered under Section 12A of the Income Tax Act 1961. The donors can get Income Tax benefits if the company is registered under Section 80G of the Income Tax Act 1961. Section 8 company can also obtain registration under FCRA and accept donations from foreign sources. Various charitable activities can be carried out from donations, grants or CSR funds.
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Besides Section 8 company other formats of charitable organization are a Society and a Trust. A comparative analysis between these three categories is summarized below:
Registration of One Person Company (OPC):
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This is the new model introduced by companies Act 2013. Unlike private limited company, where minimum two members are required to form a private limited company, an OPC can be formed by one person. This option is available for turnover up-to certain limits. Once the turnover is more than the said limit, such OPC must be converted to a Private Limited Company.