Legal – India


Types of business entities and their incorporation – India

India is now in the crux of global industrialization phenomena. The growing opportunities, expanding foreign relations, penetration of the World Wide Web to smaller cities, increasing widespread awareness about learning and increase in the number of “young population” in the country has given India the spotlight as one of the attractive centers for global investments.  Off late, the practice of starting one’s own business in India has been given a big thumbs-up as opposed to the situation a decade earlier. Startup India (“Startup India, Stand up India” campaign) is a flagship initiative of the Government of India, intended to build a strong ecosystem for nurturing innovation and Startups in the country. Startup India campaign is based on an action plan aimed at promoting bank financing for start-up ventures to boost entrepreneurship and encourage start ups with jobs creation.  It is aimed at driving sustainable economic growth and generating large scale employment opportunities. The Government, through this initiative, further, seeks to empower Startups to grow through innovation and design.

There are various kinds of business structures/entities prevailing in India. Choosing a business structure is one of the most important decisions taken by entrepreneurs. For the success of a business, it is not just necessary to have a great idea and investment. Rather, a successful business also depends on the type of structure they are using (and the business entity so established). In India, the following types of business entities can be established:

  1. Private Limited Company
  2. Public Limited Company
  3. One Person Company
  4. Unlimited Company
  5. Limited Liability Partnership (LLP)
  6. Partnership
  7. Sole Proprietorship
  8. Joint Hindu Family Business
  9. Liaison Office/Representative Office
  10. Project Office
  11. Branch Office
  12. Joint Venture Company
  13. Subsidiary Company

The Indian promoters and the foreign promoters have the option to form the Private Limited Company, Public Limited Company, Limited Liability Partnership, Unlimited Company, Partnership and Sole Proprietorship. Further, the foreign companies also have the options of forming the following type of business entities: Liaison Office/Representative Office, Project Office, Branch Office, and Joint Venture Company to carry on their business in India.

Private Limited Company Unlimited Company Sole Proprietorship Project Office
Public Limited CompanyLimited Liability Partnership (LLP)Joint Hindu Family Business Branch Office
One Person Company PartnershipLiaison Office / Representative Office Joint Venture Company
Subsidiary Company