Company Registration: All types per the Incorporation Act

Company Registration

Before we dive into Company Registration,  let us understand the concept of a company. What is a company? A company refers to a business entity comprised of at least two directors and members/shareholders. It is a legal business unit incorporated under the company registration online rules established under the Companies Act of 2013.

Simply put, Company registration is a process to acquire a Company Registration Number in India through which the business gets a legal infrastructure through which you can do business.

How to register a Company in India?

The process, even though simple, requires the assistance of Company Registration service providers. Thankfully, you are with Registrationwala. We can provide you with end-to-end assistance- guiding you with every step one needs to take to register a company in India. However, there are many factors you must consider before the name of your company lands inside the company register.

Types of Companies in India

The Companies Act of 2013 majorly defines six types of company registrations in India. Each of them is distinguishable by its structure, purpose, and nature of operations. The six companies are listed in the following point:

• Private Limited Company
• Public Limited Company
• One Person Company
• Producer Company
• Nidhi Company
• Section 8 Company

Commonality among each Company Registrations

Separate Legal Entity

A company is a separate legal entity from that of its directors. The company registration number that a company gets after the completion of a new company registration process acts as a symbolic birth certificate of the Company – making a company an individual as far as the rules are concerned.

Limited Liability

The members or shareholders and directors of a company are only liable to its losses to the extent of their share subscriptions.

Incorporated business entity

A company is an incorporated business entity – governed under the Companies Act, 2013 by the Ministry of Corporate Affairs.

Transferable Shares

The shares of a registered company are transferable among the members of that Company.

Perpetual existence

Since the existence of the Company isn’t bound by the existence of the directors, a company continues to exist even after the director’s death.

Common Seal

After registration of a company online (or offline), the directors of the Company must put a common seal on every document related to company transactions.

Features of the Company types:

Private Limited Company

• Firstly, A Private Limited Company requires a minimum of two directors.
• After that, A Private Limited Company requires a minimum of two members or shareholders.
• Then, A Private Limited Company requires a maximum of two hundred members or shareholders.
• At the last, There is no minimum capital requirement in a PLC.

Public Limited Company

• A Public Limited Company allows the transferability of shares among the public.
• A Public Limited Company requires at least 15,00,000 paid-up capital.
• A Private Limited Company must include the term “LTD” at the end of the company name.
• A Private Limited Company requires a minimum of three directors.
• A Private Limited Company requires a minimum of seven members.
• A Private Limited Company must produce an annual prospectus.

 One Person Company

• A One Person Company requires only one director for its operations.
• The director of an OPC appoints a nominee who takes the director’s position in his absence.
• There is no minimum capital requirement for an OPC. 

Producer Company

• Firstly, The business objective of a Producer Company is to provide agricultural produce.
• Secondly, The Producer Company’s name must include the words producer company in its title.
• After that, A Producer Company issues only equity shares.
• Then, A Producer Company requires a minimum of five directors.
• At the last, A Producer Company must maintain a general reserve each year. 

Section 8 Company

• It is a Non-Profit Organization.
• The dividend isn’t distributed among members.
• The profits generated by the Company are utilized to promote social-welfare work.

Also Read: Why you should worry about EPR License

Nidhi Company

• Firstly, a Nidhi Company is formed to promote savings and thrift among its members.
• Secondly, a Nidhi Company provides short-term deposits.
• But a Nidhi Company can only engage in business among members.
• Also, a Nidhi Company provides short or long-term loans with minimum documentation.

A range of companies can be registered in India under the Companies Act of 2013. These companies differ based on their nature of operations and organizational structure.