About Business Structures in India.

There are many things that you have to take care of when you are starting your new business. It is essential to understand that selecting a business structure along with other business related activities. A business structure that has been selected with prudence will ensure that the company works effectively and meets all the business targets. India has a set of rules that all companies need to adhere to when they are set out to establish themselves. A company registration in India is a must according to the mandatory legal compliance.

The types of business structures in India

1.      Limited Liability Partnership (LLP)

The liabilities of the partners in an LLP is limited to the agreed contribution decided by them and it is a separate legal entity. This type of a business structure is a good idea for service-oriented businesses and businesses that require low investments. The advantages that are gained on tax are benefit on depreciation. The legal compliances that accompany the LLP business structure include business tax returns and ROC returns that need to be filed. 

.      One Person Company (OPC)

This business structure has been recently introduced in 2013 in India and it is the wisest way to begin a company if it is owned by only one person or has one promoter. A sole proprietor can carry on his work after the online company registration in India while staying within the corporate framework. It is a wise choice for the sole earners that are looking to limit their liability. The tax advantages obtained in this business model is a tax holiday for the first 3 years under the Start-up India program. Higher benefits are offered on depreciation and there is no tax levied on dividend distribution. The legal compliances that accompany the OPC business structure are business returns and ROC compliances that need to be filed.

.      Public Limited Company (PLC)

Avoluntary association of members which has been incorporated under company law is called a PLC. It holds a different legal existence and the proportion of liability for every member is decided by the proportion of shares they possess in the PLC. This business structure is an optimal solution for a high turnover where tax exemptions are present as tax advantages. The legal compliances involved include business tax returns and mandatory audits.

.      Private Limited Company (PLC)

An established company is considered a separate legal entity from its founders in the eyes of the law. This business structure has directors and stakeholders and every individual that is a part of the company is considered as an employee of the company. This business structure is most sought by businesses that report a high turnover. The tax advantages obtained in this business model is a tax holiday for the first 3 years under the Start-up India program. Higher benefits are offered on depreciation and there is no tax levied on dividend distribution. The legal compliances involved include business tax returns that must be filed, ROC returns which must be filed, and a mandatory audit.