One Person Company Registration Fees in India

Jan 10, 2025
Private Limited Company vs. Limited Liability Partnerships

For solo entrepreneurs looking to start their own venture, a One Person Company (OPC) is an ideal business structure that offers the benefits of limited liability and complete control over the business. Understanding OPC benefits and the costs associated with registration is essential before diving into the process.

From government fees to professional charges, registering an OPC in India involves several expenses. Planning your budget can help you navigate the process smoothly and avoid unexpected costs.

In this blog, we’ll explore the various costs associated with OPC registration online in India and provide a detailed breakdown.

Table of Contents

What Does the OPC Registration Fee Include?

The OPC registration fee breakdown generally comprises the following components:

  • Government Filing Fees: Charges for submitting incorporation forms and other mandatory filings.
  • Professional Service Charges: Fees for hiring professionals like Chartered Accountants or Company Secretaries assist with registration.
  • Miscellaneous Costs: Additional expenses such as document preparation, notarisation, and obtaining licenses, if required.

OPC Registration Fees Breakdown

The OPC registration cost can be divided into several components:

Government Fees

  • Cost for filing the SPICe+ form and other mandatory forms on the MCA portal.
  • Cost of obtaining DSC for the Director.
  • Fees for obtaining the DIN
  • Depends on the authorised capital of the company; higher authorised capital attracts higher fees.

Professional Service Charges

Fees for professional assistance in preparing documents, filing forms, and ensuring compliance. It varies based on the service provider and location.

Stamp Duty Fees

Stamp duty is state-specific and varies based on the LLP’s contribution amount and the location of its registered office. On average, stamp duty can range from ₹500 to ₹5,000.

Name Reservation Fees

Reserving a unique name for your LLP costs ₹200 per application. This step ensures your chosen name complies with MCA guidelines.

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Miscellaneous Expenses

Charges for notarisation and other incidental expenses.

How Much Does OPC Registration Cost?

The overall cost of OPC registration in India typically ranges between INR 5,000 and INR 20,000, depending on various factors like professional service fees, authorised capital, and location. Government fees generally constitute a significant portion of the total cost.

Factors Affecting OPC Registration Fees

There are several factors affecting the OPC fees. Some of the OPC registration cost factors include- 

  1. Authorised Capital: Higher authorised capital increases government fees and stamp duty charges.
  2. Location: Costs may vary depending on the state due to differences in stamp duty and professional service charges.
  3. Choice of Service Provider: The fees charged by professionals or agencies can differ significantly based on their expertise and service offerings.
  4. Additional Services: Costs for optional services, such as trademark registration or GST registration, add to the total expense.

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<H2> One Person Company Registration Process

The OPC registration process involves the following key steps:

  1. Name Approval:
    • Choose a unique name for your OPC and apply for approval through the Ministry of Corporate Affairs (MCA) portal.
  2. Obtaining DSC:
    • Obtain a Digital Signature Certificate (DSC) for the proposed director.
  3. Drafting Memorandum and Articles of Association:
    • Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) outlining the company's objectives and rules.
  4. Submitting Documents on the MCA Portal:
    • Upload the required documents, such as identity proof, address proof, and the nominee's consent, on the MCA portal along with Form SPICe+.
  5. Incorporation Certificate:
    • Once approved, the MCA issues a Certificate of Incorporation, marking the completion of the registration process.

Frequently Asked Questions

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

Who is eligible to act as a member of an OPC?

To be a member of a One Person Company (OPC), you must meet the following eligibility criteria:

  • Individual Membership: Only a natural person (not a company or organisation) can act as a member of an OPC.
  • Residency Requirement: The person must be a resident of India, meaning they have stayed there for at least 120 days during the financial year.

Citizenship: Only Indian citizens are eligible to form an OPC.

Is GST registration mandatory for an OPC?

GST registration is not mandatory for every OPC. The requirement depends on the nature of the business and its turnover:

  • Mandatory Registration: If the annual turnover exceeds ₹20 lakh (₹10 lakh for certain northeastern states) or if the business involves inter-state supply of goods or services.
  • Voluntary Registration: Even if the turnover is below the threshold, an OPC may opt for voluntary registration to claim input tax credit and expand its business operations.

What is the cost of registering an OPC?

The OPC registration charges in India can vary based on professional fees, state-specific charges, and other factors.

What is the minimum capital for an OPC company?

There is no mandatory minimum capital requirement for registering an OPC in India. However, the capital structure must be defined at the time of incorporation, and it can be as low as ₹1. The recommended authorised capital typically starts at ₹1 lakh, but this is not a compulsory requirement and depends on the founder’s business plan.

What is the turnover limit for an OPC?

An OPC can operate as long as its annual turnover does not exceed ₹2 crore and its paid-up capital does not exceed ₹50 lakh. If the turnover crosses ₹2 crore, the OPC must convert into a private limited company or a public limited company within six months of exceeding the limit.

What are the tax implications of a One Person Company?

The applicable Tax rate to the OPC would be 30% plus cess and surcharge.

Can an OPC raise funds from the public?

No, an OPC cannot raise funds from the public. Since it is a privately held entity, it is restricted from:

  • Issuing shares to the public.
  • Listing on a stock exchange.

However, OPCs can raise funds through other methods, such as loans from banks or financial institutions or by adding a new shareholder when converting to a private limited company.

Related Posts

Power of Attorney (POA) in India: Meaning, Types & Process Explained

Power of Attorney (POA) in India: Meaning, Types & Process Explained

A Power of Attorney (POA) is a legally recognised tool in India that allows you to delegate authority to another individual. Whether it’s managing property transactions, overseeing business operations, or making urgent healthcare decisions, having someone you trust act on your behalf becomes essential.

It ensures your affairs continue smoothly and lawfully, even when you are unable to manage them directly. 

In this guide, we’ll cover the definition of a Power of Attorney, its importance, types, and structure and provide insights on drafting, revoking, and using it effectively.

Table of Contents

What is a Power of Attorney?

A Power of Attorney (POA) is a legal document in which one person, known as the Principal, authorises another person, called the Attorney-in-fact or Agent, to act on their behalf.

  • Purpose: To delegate decision-making powers for specific or broad tasks.
  • Scope: May cover financial, property, legal, or medical matters.
  • Duties of Attorney-in-Fact: The agent is expected to act in good faith, follow the instructions of the principal, and protect the principal's best interests.

In India, a POA is governed by the Indian Contract Act, 1872, and recognised under the Powers of Attorney Act, 1882.

Why is a Power of Attorney Important?

A Power of Attorney holds significance because:

  • Delegates responsibilities: Useful when you live abroad or are unavailable to handle tasks.
  • Ensures legal protection: Provides a valid legal framework, reducing the risk of fraud or disputes.
  • Offers flexibility: Can be broad or limited, depending on your needs.
  • Medical decision-making: Ensures someone you trust can make healthcare choices during emergencies.
  • Business continuity: Prevents disruption in financial and legal transactions.

Types of Power of Attorney Forms

In India, POAs can be categorised based on their scope and purpose:

  1. General Power of Attorney (GPA): Grants broad powers to the agent for financial, property, and legal affairs.

  2. Durable Power of Attorney: Remains valid even if the principal becomes mentally incapacitated.

  3. Special/Limited Power of Attorney (SPA): Authorises the agent to perform only specific tasks, such as selling a property.

  4. Medical Power of Attorney: Gives authority to make healthcare-related decisions if the principal cannot.

  5. Springing Power of Attorney: Becomes effective only upon a particular event, such as illness or absence.

Each type has its unique purpose, making it important to choose based on your specific requirement.

Structure of a Power of Attorney Document

A legally valid POA must include certain essential elements:

  • Identification of Parties: Full details of the Principal and Attorney.
  • Powers Granted: Clearly defined scope of authority.
  • Validity Duration: Period for which the POA remains effective.
  • Termination Conditions: Events that end the POA (e.g., completion of the task, revocation, or death).
  • Signatures and Witnesses: Both parties must sign, and witnesses should attest.
  • Notarisation/Registration: Depending on the type of POA, notarisation or registration with the sub-registrar may be required for enforceability.

Format of Power of Attorney

A standard POA format in India typically includes:

  1. Title: “Power of Attorney”
  2. Details of Principal and Agent: Names, addresses, and identification.
  3. Recitals: Background and reasons for creating the POA.
  4. Grant of Powers: Specific rights and authority granted.
  5. Validity Clause: Duration or conditions of applicability.
  6. Signature and Date: Signed by principal and agent.
  7. Witness Signatures: At least two witnesses.
  8. Notarisation/Stamping: To comply with legal requirements.

General Power of Attorney vs Special Power of Attorney

Aspect General Power of Attorney Special Power of Attorney
Scope Broad- covers multiple financial, legal, and property-related matters Limited- specific task only
Purpose Suitable for ongoing management of affairs Ideal for one-time transactions (e.g., property sale)
Convenience Offers flexibility and continuity Restricts misuse due to limited scope
Termination Can be revoked anytime by the principal or by death/incapacity Terminates automatically upon task completion

Choosing between GPA and SPA depends on whether you need long-term authority or task-specific delegation.

Key Considerations for a Power of Attorney

When creating a POA, keep the following in mind:

  • Select a trustworthy agent: Ensure the person is reliable and capable.
  • Define scope clearly: Avoid vague language that may lead to misuse.
  • Seek legal advice: Especially for property-related or durable POAs.
  • Register where necessary: For property transactions, registration with the sub-registrar is mandatory.
  • Know revocation rights: Understand how to cancel or modify your POA if required.

How to Revoke a Power of Attorney

A Power of Attorney is not permanent; you can revoke it at any time as long as you are competent.

Steps to revoke a POA:

  1. Draft a revocation notice in writing, stating that the authority granted is withdrawn.
  2. Inform the attorney-in-fact directly about the revocation.
  3. Notify concerned parties (banks, registrars, institutions) to avoid unauthorised use.
  4. Register the revocation deed with the sub-registrar if the original POA was registered.
  5. Public announcements (in newspapers) are advisable to ensure wide awareness and prevent misuse.

Frequently Asked Questions (FAQs)

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Register your Business starting at just 1,499 + Govt. Fee

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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

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Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

Is a Power of Attorney created online legally valid in India?

Yes, a Power of Attorney (POA) drafted online is legally valid in India as long as it meets all legal requirements:

  • It must be appropriately drafted with precise details of the principal and agent.
  • It should be signed by the principal in the presence of at least two witnesses.
  • For certain transactions (like property matters), the POA must be notarised or registered with the Sub-Registrar to be enforceable.

When is a Power of Attorney required to be registered?

Registration of a POA is mandatory in specific cases, such as:

  • When the POA relates to the transfer of immovable property (sale, lease, mortgage, etc.).
  • If required under state laws (stamp duty and registration rules differ by state).
  • For durability and enforceability, registration is generally recommended even if not compulsory.

In other cases, notarisation alone may suffice.

What is the authentication process for Power of Attorney documents?

The authentication process includes:

  1. Drafting the POA clearly stating powers and scope.
  2. Stamping as per state laws (value varies across states).
  3. Execution (signing) by the principal in front of two witnesses.
  4. Notarisation before a notary public for legal credibility.
  5. Registration at the local Sub-Registrar’s office if it relates to property or long-term authority.

If the POA is executed abroad, it must be authenticated by the Indian Consulate/Embassy and then stamped/registered in India.

Is it safe to store my Power of Attorney document digitally?

Yes, it is safe if done carefully:

  • Store in secure cloud storage or encrypted drives.
  • Share only with trusted individuals (like your agent or lawyer).

A digital copy is helpful for reference, but the original stamped/notarised/registered document is usually required for official use.

Can I edit my Power of Attorney PDF after it has been created?

Technically, you can edit the text of a POA PDF using editing tools. However, once a POA has been executed (signed, stamped, or registered), you cannot legally alter it by editing the file.

Swagatika Mohapatra

Swagatika Mohapatra is a storyteller & content strategist. She currently leads content and community at Razorpay Rize, a founder-first initiative that supports early-stage & growth-stage startups in India across tech, D2C, and global export categories.

Over the last 4+ years, she’s built a stronghold in content strategy, UX writing, and startup storytelling. At Rize, she’s the mind behind everything from founder playbooks and company registration explainers to deep-dive blogs on brand-building, metrics, and product-market fit.

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Parent Company: Meaning, Types, & Examples

Parent Company: Meaning, Types, & Examples

In today’s global economy, many of the world’s most successful businesses don’t operate as standalone entities. Instead, they function as parent companies, overseeing a network of subsidiaries that contribute to growth, stability, and strategic expansion.

A parent company plays an important role in controlling, supporting, and directing its subsidiary companies, whether for financial, operational, or strategic purposes.

In this blog, we’ll define a parent company, explore different types, compare it with holding companies, and examine its benefits and real-world examples, such as Alphabet, Tata Group, etc.

Table of Contents

What is a Parent Company?

A parent company is a business entity that owns and controls one or more subsidiary companies. This control is usually achieved by holding a majority share (over 50%) in the subsidiary’s stock. While the parent company exercises influence over key decisions, strategy, and financial management, the subsidiaries often continue to operate independently with their own management teams.

The relationship enables the parent company to consolidate resources, reduce risks, and gain access to new markets while maintaining a diversified business structure.

Parent Company vs Holding Company

Though often used interchangeably, parent companies and holding companies serve different purposes and levels of operational involvement.

Aspect Parent Company Holding Company
Operational role Actively manages and supports subsidiaries Primarily owns shares, with minimal direct involvement
Subsidiary control Often involved in daily operations Rarely involved in daily operations
Examples Tata Group Tata Sons

Examples of Parent Companies

Here are a few notable examples of parent companies and the subsidiaries they control:

  • Alphabet Inc.
    • Subsidiaries: Google, YouTube, Waymo, DeepMind
    • Overview: Acts as the parent for Google's core businesses and experimental ventures.
  • Unilever
    • Subsidiaries: Dove, Axe, Lipton, Ben & Jerry’s
      Overview: Owns and manages a diverse portfolio of consumer goods brands globally

  • Tata Group (India)
    • Subsidiaries: Google, YouTube, Waymo, DeepMind
    • Overview: Acts as the parent for Google's core businesses and experimental ventures.

Register your company hassle-free with Razorpay Rize and get expert guidance every step of the way.

Types of Parent Company

Parent companies generally fall into two primary categories:

1. Holding Company

Key features of a holding company:

  • Owns majority shares in other companies.
  • Doesn’t directly engage in operations or sales.
  • Has control over its subsidiaries' major decisions.
  • Used for risk management, asset protection, and tax benefits.

Example: Tata Sons is the holding company of the Tata Group, which doesn't directly run these businesses but controls strategy and owns majority stakes.

2. Conglomerate

A conglomerate is a large business entity that owns and operates multiple companies across unrelated industries. Unlike a typical company that focuses on a single sector, a conglomerate diversifies its operations to spread risk, tap into different markets, and create multiple revenue streams.

Key Features of a Conglomerate:

  • Operates in diverse, unrelated sectors
  • Has a parent company that controls all subsidiaries
  • Subsidiaries often run independently, with strategic guidance from the parent company
  • Focuses on diversification, financial strength, and cross-industry synergies

Example: Tata Group operates in sectors from IT to steel to hospitality.

Benefits of the Parent Company

Establishing a parent company offers numerous strategic advantages:

  • Risk Diversification: Losses in one subsidiary don’t affect the entire business.
  • Financial Stability: Enables capital allocation and access to larger funding pools.
  • Tax Efficiency: Offers scope for tax optimisation across group entities.
  • Centralised Strategy: Unified direction and resource sharing improve efficiency.
  • Legal Protection: Limits liability and isolates financial risks.

These benefits make the parent-subsidiary model ideal for scaling operations across markets and industries.

How Do Parent Companies Work?

Parent companies function through a mix of ownership control and strategic management:

  • Ownership: Typically hold a majority stake in subsidiaries.
  • Oversight: Involved in major decisions, budgeting, reporting, and governance.
  • Independence: Subsidiaries retain autonomy for day-to-day operations.
  • Shared Services: Often provide HR, legal, and financial support to subsidiaries.

This model allows a parent company to guide subsidiaries while giving them room to innovate and grow.

{{company-reg-cta}}

How to Become a Parent Company

Becoming a parent company typically involves gaining control over one or more other companies. This can be achieved through various methods, each offering different advantages and challenges. The most common routes include acquisitions, creating subsidiaries, or forming joint ventures.

  1. Acquiring a Company: One of the fastest ways to become a parent company is by acquiring an existing business.
  2. Creating a Subsidiary: Another way is by setting up a subsidiary company—a separate legal entity that is wholly owned and controlled by the parent. This allows the parent company to:
    • Enter new markets
    • Launch new products
    • Manage specific risks or intellectual property independently
  3. Forming a Joint Venture: A joint venture involves two or more companies collaborating to create a new business entity, sharing ownership, control, and profits.

Conclusion

By holding majority stakes in subsidiaries, a parent company can effectively manage risk, diversify its investments, and expand its reach across different industries or regions. This structure allows parent companies to leverage resources, streamline operations, and enter new markets without starting from scratch.

From acquisitions and mergers to joint ventures and subsidiary creation, becoming a parent company opens doors to new growth opportunities and market dominance.

Frequently Asked Questions

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Register your Business starting at just 1,499 + Govt. Fee

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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

Register your business

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What is meant by the parent company?

A parent company is a business entity that owns and controls one or more subsidiary companies. It holds a majority stake in the subsidiary and has significant influence over the subsidiary's operations, decisions, and financial matters.

The parent company may also provide strategic direction, resources, and guidance, while the subsidiaries remain legally separate entities, often operating independently in their own markets or sectors.

How do I register a parent company?

To register a parent company, you’ll generally follow the same process as registering any company, with the added step of acquiring majority ownership in other companies or forming subsidiaries. Here’s a simplified process:

  • Choose the Business Structure: Decide if you want to set up a private limited company, a public limited company, or any other structure.
  • Obtain Necessary Approvals: If you plan on acquiring subsidiaries, ensure compliance with regulatory bodies (such as SEBI or RBI for foreign investments).
  • Register the Company: File the relevant documents with the Registrar of Companies and get the company incorporated.
  • Acquire Subsidiaries: Once your parent company is established, you can acquire controlling shares in other companies, making them your subsidiaries.

Depending on your business strategy, you may also establish a parent company by forming a joint venture, merger, or acquisition.

What qualifies as a parent company?

A parent company qualifies when it owns a majority stake (more than 50%) in one or more subsidiary companies. It must have the authority to control the operations and strategic decisions of the subsidiaries. The key characteristics of a parent company include:

  • Majority Ownership: Owns more than 50% of the voting shares in the subsidiary.
  • Control: Has the power to influence or direct the management and policies of the subsidiary.
  • Separate Legal Entity: While the parent company controls the subsidiary, both entities remain legally separate.

Is the parent company an owner?

Yes, a parent company is the owner of its subsidiaries. It owns a majority shareholding in the subsidiary companies, which gives it the authority to control its operations, direct its strategic goals, and influence its financial decisions.

While the subsidiaries operate as separate entities, the parent company effectively governs their overall direction, acting as the main stakeholder.

Nipun Jain

Nipun Jain is a seasoned startup leader with 13+ years of experience across zero-to-one journeys, leading enterprise sales, partnerships, and strategy at high-growth startups. He currently heads Razorpay Rize, where he's building India's most loved startup enablement program and launched Rize Incorporation to simplify company registration for founders.

Previously, he founded Natty Niños and scaled it before exiting in 2021, then led enterprise growth at Pickrr Technologies, contributing to its $200M acquisition by Shiprocket. A builder at heart, Nipun loves numbers, stories and simplifying complex processes.

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Different Types of Companies in India - Complete Guide

Different Types of Companies in India - Complete Guide

Starting a business in India is an exciting and transformative journey, filled with opportunities to bring your ideas to life and create something impactful. However, one of the most crucial decisions you’ll face early on is choosing the proper business structure. Think of it as laying the foundation for your venture—get it right, and it supports your growth; get it wrong, and it could lead to unnecessary challenges down the line.

Each business type has its own advantages, legal responsibilities and operational requirements, making it essential to align your choice with your goals, resources and long-term vision.

In this blog, we’ll simplify the complexities, walking you through the different types of companies in India, their features, benefits and the documents required to get started.

Common types of companies in India and their classification

Table of Contents

What Are the Types of Business Entities?

India’s vibrant economy is home to diverse industries and entrepreneurial ambitions, necessitating a range of business entity options. From solo ventures to large-scale collaborations, the choice of business structure directly impacts a company's growth, legal compliance, tax obligations and operational efficiency.

There are different types of companies in India, ranging from individual ownership models to multi-member organisations, catering to various needs and scales. These include:

Types of Business Structures in India

India offers a variety of business structures to suit different entrepreneurial needs, scales and industries. Each structure has unique features, benefits and drawbacks, making it crucial to choose the right one based on your business goals. Let’s dive deeper into different types of businesses in India:

  1. Sole ProprietorshipA sole proprietorship is the simplest and most commonly adopted business structure in India, especially for small businesses or individual entrepreneurs. It is an unincorporated business owned and managed by a single person.
    Features:
    • No separate legal entity; the business is considered the same as the owner.
    • Unlimited liability: The owner's personal assets are at risk in case of debts.
    • Minimal compliance: Easy to set up and operate with fewer regulations.
  2. PartnershipA partnership is a business structure where two or more individuals share ownership, profits and responsibilities. It is governed by the Indian Partnership Act of 1932 and is ideal for businesses requiring diverse skill sets.
    Features:
    • Joint ownership and decision-making.
    • Unlimited liability for all partners unless specified otherwise in the partnership agreement.
    • No perpetual succession; the partnership dissolves upon a partner's death or withdrawal.
  3. Limited Liability Partnerships (LLP)An LLP blends the advantages of a partnership with the benefits of limited liability. Introduced under the LLP Act of 2008, it is ideal for professionals or small businesses looking for a flexible yet secure structure.
    Features:
    • Combines the flexibility of partnerships with limited liability protection.
    • A separate legal entity from its partners.
    • Requires at least two designated partners.
  4. Private Limited Companies (Pvt Ltd)A Private Limited Company is a favoured structure among startups and small-to-medium enterprises with several advantages. It is governed by the Companies Act of 2013 and allows for limited liability while offering scalability.
    Features:
    • Separate legal identity from its owners.
    • Limited liability for shareholders.
    • Eligibility to issue shares for raising funds.
  5. Public Limited CompaniesA Public Limited Company is suitable for businesses aiming to scale operations and raise public funds through shares. A company whose shares are publicly traded, with ownership open to the general public.
    Features:
    • Requires a minimum of seven shareholders and three directors.
    • No upper limit on the number of shareholders.
    • Vulnerable to market fluctuations.
  6. One Person Companies (OPC)Introduced under the Companies Act of 2013, an OPC caters to solo entrepreneurs seeking limited liability benefits. Simply put, a single individual owns the company while enjoying limited liability protection.
    Features:
    • Mandatory to appoint a nominee.
    • Limited liability for the owner.
    • Not eligible for equity funding.
  7. Section 8 Companies (NGOs)Section 8 Companies are nonprofit organisations formed under the Companies Act of 2013 to promote social welfare activities. These companies focus on charitable objectives like education, healthcare or environmental protection.
    Features:
    • Profits cannot be distributed as dividends.
    • Tax exemptions are available under specific conditions.
  8. Joint-Venture CompaniesA Joint- Venture (JV) combines two or more entities to collaborate on a specific project or goal. Partners share resources, expertise and profits while retaining their individual entities.
    Features:
    • Operates under a joint agreement for a specific purpose.
    • Temporary or long-term collaboration.
    • Shared financial risks.
  9. Non-Government Organisations (NGOs)NGOs are entities dedicated to social welfare causes, operating independently of the government. NGOs can be structured as trusts, societies or Section 8 Companies, focusing on various charitable activities.
    Features:
    • Operates without a profit motive.
    • May qualify for tax exemptions.
    • Drives social change and community development.

Types of Companies Based on Size

In India, companies can be categorized based on their size, typically determined by factors such as turnover, capital investment, and employee count. Here are the main types of companies in India based on size:

Here are the main types of companies based on members:

1. Micro Enterprises

Micro-enterprises are the smallest category of companies, characterized by low investment in plant and machinery or equipment. In India, micro-enterprises are defined as those with an investment of up to Rs. 1 crore in manufacturing and an annual turnover of Rs. 5 crore.

2. Small Enterprises

Small enterprises are slightly larger than micro-enterprises but still fall within the small-scale sector. In India, small enterprises are defined as those with an investment of not more than Rs. 10 crore and an annual turnover of not more than Rs. 50 crore.

3. Medium Enterprises

Medium enterprises are larger than small enterprises but smaller than large corporations. In India, medium enterprises are defined as those with an investment of more than Rs. 50 crore in manufacturing and an annual turnover of not more than Rs. 250 crore.

4. Large Enterprises

Large enterprises are the largest category of companies, characterized by substantial investment, high turnover, and a large workforce. In India, large enterprises have investments exceeding Rs. 50 crore in manufacturing or Rs. 250 crore in services. They often have hundreds or even thousands of employees and operate nationally or multinational.

These categories are defined by the Ministry of Micro, Small, and Medium Enterprises (MSME) in India to provide various benefits and incentives to small and medium-sized enterprises (SMEs), such as priority lending, subsidies, tax exemptions, and easier access to government schemes and programs.

Types of Companies Based on Liabilities

Companies can be categorized based on the extent of liability their members or owners have. Some major types of companies based on liabilities are-

1. Company Limited by Shares

A Company Limited by Shares is a type of company where the liability of its members is limited to the amount unpaid on their shares. This means that shareholders are not personally liable for the company's debts beyond the amount they have agreed to contribute towards the shares they hold.

Companies Limited by Shares can be further classified into private limited companies and public limited companies based on the number of shareholders and other criteria.

2. Company Limited by Guarantee

In a Company Limited by Guarantee, the liability of its members is limited to the amount they agree to contribute to the company's assets in the event of its winding up. This type of company is commonly used for non-profit organizations, clubs, societies, and associations.

3. Unlimited Liability Company

In an Unlimited Liability Company, the members or owners have unlimited personal liability for the company's debts and obligations. This means that their personal assets are at risk to satisfy the company's liabilities, and creditors can pursue the members' personal assets to settle debts owed by the company.

Types of Companies Based on Listing Status

Companies can also be classified based on their listing status, which refers to whether their shares are listed on a stock exchange for public trading.

1. Listed Companies

Listed companies are those whose shares are listed and traded on a recognized stock exchange, such as the Bombay Stock Exchange (BSE) or the National Stock Exchange (NSE) in India.

These companies are subject to stringent regulatory requirements and disclosure norms mandated by the Securities and Exchange Board of India (SEBI). Listing provides liquidity to shareholders and enables the company to raise capital by issuing additional shares to the public.

2. Unlisted Companies

Unlisted companies are those whose shares are not traded on any stock exchange. These companies may be privately held, meaning that their shares are owned by a small group of shareholders or closely held by promoters and investors.

Unlisted companies are not subject to the same level of regulatory scrutiny as listed companies but may still be required to comply with certain statutory requirements under the Companies Act.

Types of Companies Based on Holding

Companies can be categorized based on their holding structure, which refers to the relationship between parent companies and their subsidiaries.

1. Parent Company

A parent company is a corporation that owns a controlling interest in one or more subsidiary companies. It typically holds more than 50% of the voting rights in the subsidiary companies and has the power to make decisions affecting their operations and strategic direction.

2. Subsidiary Company

A subsidiary company is a company that is controlled by another company, known as the parent company. Subsidiary companies can be wholly or partially owned by the parent company, depending on the percentage of shares held.

Subsidiary companies operate independently but are subject to the control and influence of the parent company.

3. Holdings Company

A holdings company is a company whose primary purpose is to hold investments in other companies rather than engage in operational activities. Holdings companies typically own shares in subsidiary companies and may provide their subsidiaries with strategic direction and financial support.

Unlike a parent company, a holding company does not engage in business operations of its own.

4. Affiliate Company

An affiliate company is a company that is related to another company through common ownership or control. Affiliate companies may be part of the same corporate group or have a strategic partnership with each other.

5. Associate Company

An associate company is one in which another company holds a significant but not controlling interest, usually between 20% to 50% of the voting rights. While the investing company has influence over the associate company's operations and management, it does not exercise full control.

Documents Required to Open Different Types of Business in India

Here’s a list of documents required to open a company in India:

  • Identity Proof: PAN card, Aadhaar card
  • Address Proof: Utility bill, rent agreement, or property papers
  • Business Registration Forms: Forms based on the business type (SPICe+, FiLLiP, etc.)
  • Digital Signature Certificate (DSC): For online submissions
  • Proof of registered office address: NOC or Rental Agreement

Additional documents may be required based on the business type, such as MOA and AOA for companies, LLP Agreements for LLPs or trust deeds for NGOs.

Conclusion

In India, the variety of business entities ensures there’s a fit for every kind of entrepreneur—whether you're a solo dreamer with a big vision, a small team building something impactful, or an organisation driven by social change.

Each type of entity offers unique features, advantages and challenges. From the simplicity of a sole proprietorship to the robust framework of private limited companies or the flexibility of LLPs, picking the right one can make your journey smoother, protect your personal assets and set you up for growth.

Think about your business goals:

  • Do you want to stay small and agile or scale into a large organisation?
  • Do you need investors or want to keep it self-funded?
  • Are compliance and taxes manageable?

Your answers to these questions will guide you toward the perfect fit. If you’re unsure where to start, don’t worry—many successful entrepreneurs were in the same place when they started. The key is to take it one step at a time.

Frequently Asked Questions

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Frequently Asked Questions

What Type of Business Is More Profitable?

The profitability of a business depends on various factors, including the industry, business model and operational efficiency. For instance:

  • Technology startups have high profit potential due to scalability.
  • Service businesses, like consulting or digital marketing, often have low initial costs and high margins.
  • E-commerce can be highly profitable if inventory and logistics are managed efficiently.
  • Real estate and manufacturing tend to yield long-term gains but require significant capital.

Ultimately, the most profitable business aligns with the entrepreneur’s expertise and market demand.

Why Do Different Types of Businesses Exist?

Different types of businesses exist to cater to the diverse needs of entrepreneurs, industries and regulatory requirements.

  • Legal and financial considerations: Some businesses need limited liability, while others prioritise simplicity.
  • Operational scope: A sole proprietor might work well for small-scale operations, while large organisations need a corporate structure.
  • Growth potential: Some structures, like private limited companies, attract investors, while others, like partnerships, foster collaboration.

What Types of Businesses Are in Demand?

Currently, high-demand businesses include:

  • Technology and SaaS: Cloud computing, AI and software solutions.
  • E-commerce: Online retail continues to grow post-pandemic.
  • Health and wellness: Telemedicine, fitness and organic products are booming.
  • Sustainable businesses: Eco-friendly products and renewable energy.
  • Digital services: Marketing, content creation, and app development.

These industries reflect shifting consumer priorities and technological advancements.

What Are the Five Types of Business Organisations?

The five major types of business organisations are:

  • Sole Proprietorship: Owned and managed by one person; simple and cost-effective.
  • Partnership: Owned by two or more individuals sharing responsibilities and profits.
  • Limited Liability Partnership (LLP): A hybrid structure with limited liability and partnership benefits.
  • Private Limited: A separate legal entity that can raise capital by issuing shares.
  • Public Limited: Allows a company to offer shares to the general public, either on the stock market or privately.

What Is the Director Identification Number (DIN)?

The Director Identification Number (DIN) is a unique identification number assigned by the Ministry of Corporate Affairs (MCA) in India to individuals intending to serve as company directors. It is mandatory under the Companies Act of 2013.

Nipun Jain

Nipun Jain is a seasoned startup leader with 13+ years of experience across zero-to-one journeys, leading enterprise sales, partnerships, and strategy at high-growth startups. He currently heads Razorpay Rize, where he's building India's most loved startup enablement program and launched Rize Incorporation to simplify company registration for founders.

Previously, he founded Natty Niños and scaled it before exiting in 2021, then led enterprise growth at Pickrr Technologies, contributing to its $200M acquisition by Shiprocket. A builder at heart, Nipun loves numbers, stories and simplifying complex processes.

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