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Thursday, January 20, 2022

Top Business Entities Available In India

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India is referred to as an emerging market that comes out with many different opportunities for Indian and foreign investors. The government of India does come out with many friendly policies to boost entrepreneurship in India. It makes growth quite easier for budding entrepreneurs.

Before investing in any business, it is highly important to have the blueprint of the whole plan. IT will help as a tool for long term planning. It is basically referred to a formal document that specifies the entire vision and strategy.

A Business Plan Should Have The Following Things

  1. Cover page
  2. Content Table
  3. Summary
  4. Resource Requirement
  5. Development and Production
  6. Format
  7. Writing and Editing
  8. Summary

Different Forms of Business Entities Available in India

  • Private Ltd Company
  • Joint Hindu Family business
  • Unlimited Company
  • Public Ltd Company
  • Sole proprietorship
  • Limited Liability Partnership (LLP)
  • Partnership
  • Cooperatives
  • Liaison Office

Private Ltd Company

A private company carries the following features:

  • It limited the rights of shareholders to transfer shares
  • It can have minimum 2 or a maximum of 50 members
  • It doesn’t allow the public to subscribe to share capital
  • It must carry a minimum paid-up capital of around Rs 1 lakh or a higher amount

Public Ltd Company

A public Ltd company has the following Features:

  • It allows the investors to transfer the shares
  • It may have a minimum of 7 members, and there is no limit for maximum
  • it invites the general public to subscribe to its shares
  • Requires a minimum capital of Rs 5 lakh or such a higher amount

Unlimited Company

An unlimited company is basically a form of business under which the liability is unlimited for its members. Under the same, all the personal assets of the person can be used to clear the debts. It can

Get re-register anytime as a limited company under section 32 of the Companies Act.

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Sole Proprietorship

The sole proprietorship is referred to as a form of business entity under which a single individual handles the entire organization. He/she will be the sole recipient of all profits and bearer of loses as well. There is no specific law that will govern sole proprietorship.

Joint Hindu Family

Joint Hindu Family is the form of business wherein the responsibility of owning the business is limited to family members only. It is governed by Hindu Law.


A partnership is basically “the relation between persons who agreed to share the profits, loss, and everything associated with the business”. It is governed by the Indian Partnership Act 1932.


Co-operatives referred to a form of voluntary organization, under which the people work promotion of the interests of its members.  Cooperative Societies Act 1912 governs the same. There is no restriction related to the entry or exit of any member.

Limited Liability Partnership

LLP (Limited Liability Partnership) offers unlimited liability to one person whereas rest the rest of the members would have limited liability. Such a partnership does not get terminated in case of death or insolvency of the limited partners.

Liaison Office

Liaison Office is a kind of representative office which is set up to understand the business and investment environment. It is barred from taking up any commercial/industrial/trading activity and its role is limited to aggregation of information and promotion of exports/imports. It has to maintain itself out of inward remittances received from the parent company.

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