A private limited incorporation is one way to start your business in India. It is consider to be the best form of business that also protects your personal property. To raise funds in India, E.S.O.P. etc. is the most recommended form for start-up.
Raising the fund for private limited company
Finance is the lifeline of any business and in today’s world every competition is poor by the neck, the availability of good finance is necessary to sustain it. One can refer to a practical example from Flipkart, Ola, etc. Therefore, in order to raise funds, one must follow the following in a private company in Chennai T.Nagar:
Create a plan and a working business model: Gone are the days when you could get funding base on an idea. Now, it is time that you should examine your own idea, reach out to MVP and then make a strong future plan.
Reach out to investors and sign the word sheets: In this step, one should reach out to different investors and explain to them the model, future plans and how they can earn if they invest in the business to raise the fund for the private limited company in Bangalore Maruthi seva nagar.
Prepare documents: Once it has signed the term sheet, the next and final step is to prepare the documents like shareholder agreement etc.
Private Limited Incorporation
Registration of a private limited company registration in Chennai T.Nagar has now been ease by the Ministry of Corporate Affairs (MCA), and further initiatives like Start-up India have given a boost to company registrations across India. Next, the company allows you to raise funds from Angel Investors, Venture Capital, etc. However, to form a private limited company in Chennai T.Nagar, the following mandatory requirements are:
- Starting a private limited company in India requires at least two people.
- Whatever the capital amount of your company, you should make the same investment within 2 months of the investment.
- There should be a basic understanding of compliance to avoid delays and penalties.
Prepare DSC and file name preparation: The first step in private limited company in Bangalore Maruthi seva nagar is to prepare DSC and DIN. This takes time from one to two days. After that, one needs to file for approval of the name. The first word of the name must be unique and the name must end with the words “Private Limited”.
File for Incorporation: After getting the name approve, the next step is to file for insertion through Masala Form INC32. Next, PEN and TN do not need to be file separately and are allocate to the composition of the company.
Get GST Registration: After joining, access your business and get the required registration including GST registration. This is because it is illegal to work in India without a tax license.
Difference between the private limited company and Partnership Company in India
Private limited company
- It is a separate legal entity. It is govern by board of directors. These companies are own by its shareholders. The private limited company in Chennai T.Nagar can have a maximum of 200 members. A private limited company has its registration under the Companies Act, 2013.
- The members of the company do not have to pay anything more than the amount of shares they have which separates the company and its members from each other.
- The Annual General Meeting is an important part of a private limited company where all major decisions like appoint of directors, change of capital and future business plans are discuss and agree upon.
- A private limited incorporation in Bangalore Maruthi seva nagar is required to pay tax at the rate of 30% on its income. Moreover, dividends distributed by a private limited company are subject to dividend distribution tax. According to the Income Tax Act, the rate of recovery of DDT is 16%. In addition, there is a third type of tax called the Minimum Alternate Tax that is levy on a company’s book profits, if calculated under the law, less than the minimum income tax payable on total income. The rate of MAT is 18% which is require to be pay by the company.
- Tax compliance of an LLP is comparatively easier than that of a private limited company. On the income of a limited liability partnership, 30% tax will be levied. In addition, LLP is subject to an optional minimum tax of 18.5% on its total systematic income. An important point to note here is that LLPs are not subject to dividend distribution tax like a private limited incorporation in Bangalore Maruthi seva nagar.
In a “partnership” two or more people share the assets of the same company or business. In order to form a “partnership“, it is necessary to enter into a clear or explicit agreement between two or more persons to continue the business, as co-owners share in the losses or profits.
- If there is no written document that clarifies how the “partnership” will govern all partners are equally responsible for the duties and activities of the business in the field of business activities.
- Each state has its own regulation regarding participation, so it is important to review the regulation of the state where the business activity is conduct.Regarding partnerships, there are different types: “general partnership”, “limited partnership” and “joint venture”.
- General partnership. All associates are responsible for the administration of the business, distribute profits or losses in accordance with their internal agreement and assume the same legal ability to bind other partners, unless otherwise agreed.
- Limited participation. This type of partnership is characterize by the coexistence of partners who give unlimited feedback for liabilities arising from business activities and participate in the management of the company and partners with limit financial responsibilities who do not participate in management.
- Joint venture. The joint venture figure works in much the same way as a “general partnership” because the partners have the same responsibilities and participate in the management of each business. However, the joint venture diagram is design for the development of a single project and for a limited time.
The so-called “limited liability company”, on the other hand, is a unique entity. It is a hybrid business structure that provides limited liability characteristics of the corporation and tax efficiency and operational flexibility of the partnership.