India is a developing country. And Being one of fastest growing country in world India is in top list of Investors for investment in Innovation in Pharmaceuticals, FMCG, Information Technologies, Infrastructure and many other various sectors.
Recently mostly new companies has invested in country and setup their Business offices, Marketing offices and even setup their plants & factories for manufacturing in India like Samsung, MG Motors, KIA Automobiles, Amazon and many more has invested in India number of crores amount.
In India many new research and development has lead to new innovation startups in technology, bio chemicals, pharmaceuticals. So For multi million dollars has been invested in Indian Startup Companies like Swiggy, Paytm, Zomato, Grofers etc.
So Here we will discuss about how to setup your startup in India and get benefits of new technologies and improving economic situations.
For setup business in India, we can start business in various forms as below:
- Private Limited Company
- Proprietorship Firm
- Partnership Firm
- Limited Liability Partnership
- One Person Company
- Public Limited Company
So If you personally ask me which one is better for startup business and why ?
I will suggest to go for Private Limited Company and there are various reasons because of that I am recommending Private Limited Company for startup business. I will share that and In which kind of business and in which situation other forms of business will benefit, that we also discuss here.
In India, If you are doing Job and thinking of starting some business and having any idea of some new technology and some manufacturing innovation, you can get also funding and support from Indian Government also under Startup India Scheme & Make in India Scheme. We will also discuss here about these scheme and How to get benefit of these schemes.
Here I have made a comparison of all options
| Private Limited Company | Public Limited Company | Limited Liability Partnership Firm | One Person Company | Partnership Firm | Proprietorship Firm | |
| Recommendation for | Startup Venture wants to distribute shares and Stock option having | Wanted to go to Public for funding | For Professional Services like Consultancy and Advocacy | For Single owner want to have Private Limited Status | For Small Business Partners want to start in Unincorporated Form | For Small Household business or For Single owner want to start in Unincorporated Form |
| Integrity and Credibility | Having more integrity and Credibility because of already verified status | Having more integrity and Credibility because of already verified status | Having more integrity and Credibility because of already verified status | Having more integrity and Credibility because of already verified status | Having less integrity and credibility in comparison to Private Limited Status | Having less integrity and credibility in comparison to Private Limited Status |
| Tax Rates and Tax Benefits | Flat Tax @ 22% and Less Tax Benefits | Flat Tax @ 25% and Less Tax Benefits | Flat Tax @ 30% and Less Tax benefit | Flat Tax @ 22% and Less Tax Benefits | Flat Tax @ 30% and Less Tax Benefits | Tax Slab Rate from 10%-30% and more efficient in Tax. |
| Limited Liability Benefit | Yes | Yes | Yes | Yes | No | No |
| Compliances | High | High | Less | High | Minimal | Minimal |
After comparison of all above all options, I recommend all options of business depending on their business requirement. But if you are starting a new venture and looking for investment with share capital distribution of equity shares in future I must recommend to go for Private LImited Company Registration.
In Next article, we will discuss how to incorporate a private limited company registration in India and other forms of options of business.
Thanks
Author : CA Lukesh Sethi
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