Before starting a Business many decisions are to be taken and finalized. A Business Organization may be:
Sole Proprietorship form of Business
A Sole Proprietorship form of business can be established by a single person with minimum amount of capital. In this form of business complete control of the business, profit/loss and complete business risk will be with the sole proprietor only. This type of entity is useful for small businesses. In this form of business the individual and his firm are considered as single entity for taxation purpose.
Partnership for of Business
A Partnership form of business can be established by two or more persons by creating partnership deed.
Registration of Partnership Deed
In India, it is not compulsory to Register a Partnership deed. But an un registered partnership have some disadvantages in the eye of law. So it is better to register the deed with the Registrar. The Registrar of Partnership will issue a certificate of Registration to the applicant. Any modification in the partnership deed, whether it is retirement of partner, appointment of partner, death or any amendment should be informed to the Registrar of Partnership.
A Registered partnership firm has all the right to sue in a court of law in India. But in other countries there may be differences in rule.
Limited Liability Partnership (LLP)
LLP is a corporate business form that enables professional expertise and entrepreneurial initiative to combine and operate in flexible, innovative and efficient manner, providing benefits of limited liability while allowing its members the flexibility for organizing their internal structure as a partnership.
An LLP can be registered with the Registrar of Companies.
Registration Procedure
Designated Partner Identification Number (DPIN)
The persons interested to form a Limited Liability Partnership should apply for Designated Partner Identification Number (DPIN) from the Registrar of Companies. The DPIN application can be processed with the help of a Practicing Practicing Company Secretary or A Chartered Accountant.
Application for Allotment of Name
After approval of Designated Partner Identification (DPIN) by the Registrar of Companies, the application for availability of name can be filed. If the name choice is available the Registrar of Companies will give approval for the name.
Registration of Limited Liability Partnership
After approval of name by the Registrar, the application for Registration of Company can be filed with copy of Partnership Deed and other required forms and information. All these documents can be filed online with requisite fee.
If found satisfied the Registrar of Companies will give Certificate of Registration.