Corporate services

Corporate Services:

1)Types of Business Entities in India

Private Limited Company (Pvt Ltd):

Features: Minimum 2 and maximum 200 members; Limited liability; Restricted transferability of shares.
Documents Needed: PAN cards of directors, Identity proofs (Aadhar, Passport, etc.), Address proof of directors, Registered office address proof (rent agreement/utility bill), Memorandum of Association (MOA) and Articles of Association (AOA)
Penalties: Non-compliance may lead to penalties under the Companies Act, 2013, ranging from ₹50,000 to ₹5 lakh depending on the violation.

Public Limited Company:

Features: Minimum 7 members with no maximum limit; Shares can be freely transferred; Can raise capital from the public.
Documents Needed: PAN cards of directors, Identity proofs (Aadhar, Passport, etc.)Address proof of directors, Registered office address proof (rent agreement/utility bill), MOA and AOA.
Penalties: Non-compliance can lead to severe penalties, including fines up to ₹25 lakh or more, depending on the nature of the offense.

Section 8 Company (Non-Profit Organization):

Features: Formed for promoting commerce, arts, science, sports, education, research, social welfare, religion, charity, etc.; No minimum capital required.
Documents Needed: PAN cards of directors, Identity proofs (Aadhar, Passport, etc.)Address proof of directors, Registered office address proof (rent agreement/utility bill), MOA and AOA, Declaration from each director regarding compliance.
Penalties: Fines for non-compliance can range from ₹10,000 to ₹1 lakh. Cancellation of license if activities are not aligned with the objectives mentioned in MOA.

Limited Liability Partnership (LLP):

Features: Combination of partnership and company; Limited liability; Minimum 2 partners, no maximum limit.
Documents Needed: PAN cards of partners, Identity proofs (Aadhar, Passport, etc.), Address proof of partners, Registered office address proof (rent agreement/utility bill), LLP Agreement.
Penalties: Non-compliance can lead to penalties up to ₹5 lakh, depending on the nature and extent of the violation.

2. General Incorporation Process

Name Reservation: Check name availability and reserve it through the MCA portal. For LLPs, use the RUN (Reserve Unique Name) service.
Director Identification Number (DIN) & Digital Signature Certificate (DSC):Apply for DIN and DSC for proposed directors/partners.
MOA and AOA/LLP Agreement: Draft and submit the Memorandum of Association and Articles of Association for companies or the LLP Agreement for LLPs.
Filing with MCA: File incorporation forms (e.g., SPICe+ form for companies) on the MCA portal. Attach necessary documents like ID proofs, address proofs, MOA, AOA, etc.
Certificate of Incorporation: Upon approval, the MCA issues the Certificate of Incorporation, which includes the company’s/LLP’s unique Corporate Identification Number (CIN).

3. Penalties and Compliance

Annual Compliance: Filing of annual returns, financial statements, and other statutory documents with MCA.
Non-Compliance: Heavy fines and potential disqualification of directors/partners for continuous non-compliance. Penalties vary by the type of entity and the nature of non-compliance.

4. Advantages of Incorporation

Separate Legal Entity: Distinct from its members, offering limited liability protection.
Perpetual Succession: The entity continues regardless of changes in membership.
Tax Benefits: Potential tax advantages depending on the type of entity.
Credibility: Incorporated entities are generally seen as more credible and trustworthy.