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:

  1. Private Limited Company
  2. Proprietorship Firm
  3. Partnership Firm
  4. Limited Liability Partnership
  5. One Person Company
  6. 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 CompanyPublic Limited CompanyLimited Liability Partnership FirmOne Person CompanyPartnership FirmProprietorship Firm
Recommendation forStartup Venture wants to distribute shares and Stock option havingWanted to go to Public for fundingFor Professional Services like Consultancy and AdvocacyFor Single owner want to have Private Limited StatusFor Small Business Partners want to start in Unincorporated FormFor Small Household business or For Single owner want to start in Unincorporated Form
Integrity and CredibilityHaving more integrity and Credibility because of already verified statusHaving more integrity and Credibility because of already verified statusHaving more integrity and Credibility because of already verified statusHaving more integrity and Credibility because of already verified statusHaving less integrity and credibility in comparison to Private Limited StatusHaving less integrity and credibility in comparison to Private Limited Status
Tax Rates and Tax BenefitsFlat Tax @ 22% and Less Tax BenefitsFlat Tax @ 25% and Less Tax BenefitsFlat Tax @ 30% and Less Tax benefitFlat Tax @ 22% and Less Tax BenefitsFlat Tax @ 30% and Less Tax BenefitsTax Slab Rate  from 10%-30% and more efficient in Tax.
Limited Liability  BenefitYesYesYesYesNoNo
CompliancesHighHighLessHighMinimalMinimal
       

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

CA Lukesh Sethi

You can ask if any Query.

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