The Companies Act of 1956 creates a legal framework based on the division of businesses into private and public entities. However, the types of corporate organizations continue to change as the economy expands and commercial processes become more complex. There is a necessity for the law to consider the requirements of various business types and to develop general guidelines that all firms can rely on when establishing their corporate governance structure. The risk-taking activities of entrepreneurs are impeded by restrictive institutions, pointless prohibitions, and rules. Private companies and small businesses that rely on their own internal or personal resources rather than public issues or deposits need flexibility and compliance at a low cost.
A more strict corporate governance code must be followed by public companies that raise money from the general public.
To offer a thorough framework for all forms of corporate organizations, the Company Law should ensure that corporations are classified in a variety of ways.
To offer a thorough framework for all forms of corporate organizations, the Company Law should ensure that corporations are classified in a variety of ways.
Additionally, it ought to make it simpler for enterprises to move from one category to the next.
The Companies Act of 2013 governs the business world. There are seven different ways to register a company in India. There are so many options that choosing the right type of company registration can be challenging.
Which is better for a small-sized business?
The notion that something is “better” entirely hinges on the preferences of business owners. For instance, there are significantly fewer compliance requirements for partnerships than for LLPs, and yearly return filing is not necessary. The activity will undoubtedly be better served for cooperation if minors are also participating. Traditional partnerships allow for the addition of minors as partners, however, LLPs do not.
The limited liability partnership, on the other hand, is a fusion of a partnership and a corporation; it protects partners from unlimited liability due to its legal existence and eases the partners’ lives by allowing them to hold property, take out loans, and sign contracts solely in the name of the company. The LLP has fewer legal requirements but harsher consequences.
If taken as a whole, the idea of a limited liability partnership has quickly acquired support, and an increasing number of people are forming their companies as LLPs. Due to the fact that it is affordable and simple to set up and operate, small business owners frequently use it. A partnership agreement is not necessary for traditional partnerships, and partners can reach decisions by consensus. However, this might result in conflicts, which can be very costly for the firm owners. Therefore, a limited liability partnership is beneficial for a small firm since it offers limited liability similar to that of a private company and flexibility similar to that of a partnership, giving the company a synergized output.
Documents pertaining to the company's partners, shareholders, and directors (LLP)
Identification documents for each company's directors, owners, and partners (in the case of an LLP). Any of the following records could be used as identifying documentation.
- PAN Card
- Adhar Card
- Driving Licence
- Passport
Proof of residency for each shareholder and director. Any of the following papers can be used to prove residency.
- Latest 2 months' telephone bill.
- Latest 2 months' electricity bill
Bank account statement having the residence details
Director Identification Number and Digital Signature Certificate for each director.
Documents of the Company/LLP
Proof of registered office:
Registered office address proof of the company. The following documents must be produced as evidence of the company's address.
Rental contract:
Between the owner and the company or LLP, there is a lease or rental arrangement.
A letter of No objection:
A letter of no complaint stating that the owner has given permission for the LLP or corporation to utilize the space as its registered office.
Sale Agreement:
Agreement for selling an LLP's or a company's office space.
Memorandum of Association (MOA):
The obligation of the partners and the purposes for which the company will be combined are both included in the memorandum of association.
AOA:
The by-laws on which the business will operate are outlined in the Articles of Association.
