Types of Organisations
Katyal & Associates Chartered Accountants
The simplest business form under which one can operate a business. The sole Proprietorship is not a separate legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.
A sole proprietorship can operate under the name of its owner or any other fictitious name.
A partnership firm is an organization which is formed with two or more persons to run a business with a view to earn profit. A partnership firm can be registered or unregistered.
However, as far as the liabilities of the firm are concerned the partners are personally responsible for its debts.
A partnership firm can operate under a specific the name and not in the name of its owner.
Limited Liability Partnership (“LLP”)
A Limited Liability partnership (“LLP”) is a kind of partnership firm which is also formed with two or more persons to run a business with a view to earn profit.
However, the difference between partnership firm and a LLP is that the liability of partners in LLP is restricted to the amount of initial investment done by the partner.
LLP is required to get registered through Registrar of Companies.
A Trust is a legal arrangement in which a person holds property for the sake of some other person.
A Society is an association of person, who come together to fulfill any particular purpose.
A Trust require minimum 3 members to start however in society we require at-least 7 members.
A Company is a body corporate or an incorporated business organization registered under the Companies Act. A Company can be a one person company (OPC), a private limited Company or a public limited Company
OPC is a company having only 1 director and 1 shareholder
Private limited company is a closely held company with minimum 2 shareholders.
Public Limited Company is a Company with minimum 7 shareholders.