2 Most Important but Cheap Legal Entity in India

Introduction

If you want to open a startup then you should consider the cheap legal entity so it will help you in your cost-cutting during incorporation of your business Entity. There are many types of Legal Entity available, it is your choice you can choose whatever you want. If you are a single owner of your company then you can register with One Person Company, there is the online person required for incorporation of business and if you are two or more than two people then you can incorporate your business with Limited Liability Partnership. If we compare to these with other legal entity then their registration is cheap as compared to the private limited company. If we compare to these with Partnership Firm then Partnership Firm is cheap to incorporate but it has limited benefits whereas One Person Company and Limited Liability Partnership has more benefits. This Article talks about the One Person Company and Limited Liability Partnership.

One Person Company

One Person Company Registration (OPC) can incorporate by single owner it does not require two or more person. OPC is governed by the Companies laws and its function regulated by the Ministry of Corporate Affairs. All Compliance should be done with the Registrar of Companies. If we compare to Private Limited Company then it requires fewer compliances. It is like Sole Proprietorship but in an organized way. It is a separate legal entity which can sue or can be sued from other. There is a limited liability on its promoter. It requires only 1 director for running One Person Company. It requires minimum capital of 1 lakh rupees which is very less as compared to Private Limited Company. One Person Company has many benefits as you can see that main benefit is it can incorporate by only one person and it has perpetual succession. Owner of the One Person Company can nominate a nominee so in the case of death or disablement of owner nominee will become an owner of the company. It is very suitable for small business, who wants to become a legal entity it is perfect for the small business.

If you want to incorporate your one person company then you have to follow the procedure of Ministry of Corporate affairs for its incorporation. As you know it can be incorporate by one person and you have to register with MCA. First, you have to get your Digital Signature of Certificate for the proposed director which can obtain by the filing online application. After obtaining DSC you have to get DIN (Directors Identification number) then you can file your incorporation form, during filing of incorporation form you have to mention each and every required detail and have to attach required documents. You have to also make you MoA and AoA which has to be filed with ROC. After Registration, you will get many benefits and you will also get benefits from the government.

Limited Liability Partnership

Limited Liability Partnership Registration (LLP) is can be incorporated by two or more person, it cannot be incorporated by one person. LLP is governed by the Limited Liability Partnership Act and its compliance should be done with the Registrar of companies. It is like Partnership firm but it is more secure because in LLP there is a limited liability on partners and it is a separate legal entity which can sue or be sued from others. It has many benefits like its incorporation fee is less than a private limited company and it requires less compliance as compare to the private limited company, an LLP is required to submit their annual statement to the ROC. Decision making is efficient in an LLP because partners share their experiences.

If you want to register your LLP then you have to follow a procedure of MCA, you have to first get your Digital Signature Certificate of Proposed Director, and then you have to reserve your LLP name which should be unique and not copied from others. You can reserve your name through LLP-RUN web service. Then you have to file your incorporation form. Incorporation form, you have to mention all details of partners and your LLP. After the filing of incorporation form you will get your registration number. After successful registration, you have to submit your LLP Agreement to the ROC.

Conclusion

If you are thinking of a startup then you should consider the above-given things. If you are a single owner then you can incorporate your business as One Person Company and there are two or more than two partners in your business then you can register your business as an LLP.