What this covers
Deciding what form a business should take, and then setting it up. The realistic choices are a proprietorship, a partnership firm, a limited liability partnership, a private limited company, a one-person company and, for a not-for-profit, a section 8 company or a trust. The decision turns on liability, ownership, whether outside investment is expected, how profits will be taken out, the compliance the form carries and how hard it is to unwind. The work covers that comparison, the incorporation, and the first-year filings most likely to be missed.
Statutory basis
A proprietorship has no constituting statute — it is the individual, existing once the activity-based registrations are in place. A partnership firm is governed by the Indian Partnership Act, 1932; registration with the Registrar of Firms is optional, but section 69 bars an unregistered firm from suing to enforce a contractual right. A limited liability partnership is formed under the LLP Act, 2008 with the LLP Rules, 2009. A company is incorporated under the Companies Act, 2013 with the Companies (Incorporation) Rules, 2014, and section 149(3) requires at least one director resident in India. Goods and services tax registration follows sections 22 and 24 of the CGST Act, 2017, and Udyam registration the MSMED Act, 2006. Each form is taxed under the Income-tax Act, 2025, which replaced the Income-tax Act, 2025 on 1 April 2026; we run the comparison on your own numbers rather than quoting a rate.
Who it applies to
Anyone starting out and choosing a form for the first time. An existing proprietorship or firm outgrowing it — because a customer requires a company, because a lender wants limited liability separated from the promoter, or because a second owner is coming in. And a business that needs to convert, where the tax cost decides timing.
What we do
- 1Establish the facts that decide the answer — how many owners, whether outside investment or employee equity is expected, and whether profits will be reinvested or drawn — then compare the forms on liability, taxation of profit and of distribution together, the filing load, audit requirement, and the cost of closing.
- 2Reserve the name, checking it against existing company and limited liability partnership names and against registered trade marks, since a name the Registrar approves can still be challenged by the proprietor of a mark.
- 3File the incorporation forms with the digital signatures and identification numbers — the integrated form with the electronic memorandum and articles for a company, or the incorporation form followed by the LLP agreement within thirty days.
- 4Complete what incorporation does not deliver: permanent account number and tax deduction account number, bank account, goods and services tax registration where required, Udyam and shops and establishments registration, and provident fund and insurance registration once headcount triggers them.
- 5Do the first-year filings that are commonly missed: appointment of the first auditor by the board within thirty days under section 139(6), Form INC-20A within one hundred and eighty days, Form ADT-1, and director identification verification.
- 6Put the governance basics in place at the start — an agreement between the owners on deadlock, transfer and exit, registers, minutes and a resolution trail — because reconstructing three years of minutes before a due diligence costs more than keeping them.
What you receive
- Comparison note
- The forms considered on liability, tax, compliance and exit, with the reason for the recommendation.
- Entity formed
- Certificate of incorporation or registration, charter documents, and the numbers allotted.
- Registrations
- The registrations the business needs, and the ones it does not.
- First-year calendar
- Every filing the new entity attracts in its first year.
- Governance pack
- Registers, first minutes and resolutions, and the owners' agreement.
Documents and information required
Permanent account number, Aadhaar, photograph and address proof of each proposed owner, director or designated partner · proof of the registered office with the owner's no-objection and a recent utility bill · two or three proposed names · description of the proposed activity in enough detail to draft the objects · digital signature of the subscribers · notarised and apostilled documents for a foreign subscriber · for a conversion, the existing deed and last accounts.
Key dates
A limited liability partnership files its agreement in Form 3 within thirty days of incorporation. A company appoints its first auditor by board resolution within thirty days under section 139(6), and files Form INC-20A within one hundred and eighty days — until it does, it may neither commence business nor borrow. Goods and services tax registration is applied for within thirty days of becoming liable, and liability runs from the date it arose rather than the date of the certificate. Thereafter the annual cycle applies: for a company, financial statements and the annual return after the annual general meeting; for a limited liability partnership, Form 11 by 30 May and Form 8 by 30 October.