All will be interested to convert their ideas into the business. Business is basically a blueprint that will convert your ideas from the startup phase to establishment and that will eventually grow your business. For startup it doesn’t required much required money and does not need more investment. Startup always face a dilemma while choosing a type of business structure.
The first and foremost step is to select the type of business structure. There are five types of business structure that a startup can choose yourself to grow your business.
The first one is the Sole Proprietorship the second one is One Person Company the third one is the general Partnership and fourth one is the LLP which can be called as Limited Liability Partnership and the 5th one is the Private Limited Company.
Here i can help you to select the type of business structure,
Lets discuss the first one that is Sole Proprietorship. In the Sole proprietorship the individual and proprietor are same one here you can use your own capital to form the type of business structure were the liability is unlimited and the risk is with proprietor only. and the setup cost is very low and has very fewer compliances. It is appropriate for startup to choose this type business structure as a quick start.
The next type of business structure is the One Person Company. The one person itself defined with the word is a one man army. It is basically just an extension of sole proprietorship. One person company incorporate and ends with the word Private limited word, it has very fewer compliances and the startup cost is very low and it has a market recognition if we compare it with sole proprietorship. The person gets an opportunity to convert its OPC one person company into private company once its threshold limit of the share capital exceeds 50 lakhs and turnover exceed 2 crore rupees.
Now lets come to the third type of business structure that is the general Partnership. General Partnership is governed by Indian Partnership Act 1932, here the minimum requirement of the partners to start the partnership is two. it has fewer compliances and it will be very suitable for small to medium scale operators to start with the general partnership. It has not much market recognition if we compare with other type of business structure. Though it is also quick to start for Startups with less documentation.
The another type of business structure is Limited Liability Partnership we often called it in a market as LLP. It is basically a hybrid between the company and the partnership. The liability of the partners is limited to the extent of capital that they have contributed. It has market recognition as compare to the other business structures, it has very fewer compliances and the startup cost is very low and it is obviously appropriate for the small scale business operators.
Last but not the least the fifth type of business structure is the Private Limited Company. To incorporate the Private Limited Company, minimum two directors are required. There is no minimum number of capital required for this although it is advisable to invest atleast with one lakh to start the incorporation of a Private Limited Company. The golden features of the Private Limited Company is separate legal entity, it explain the ownership and management are different. As a startup if you are planning to raise your fund through investors it is most appropriate and recognised in the market. Investors always prefer to invest their money in the Private Limited Company.
These are the popular type of business structure that you can choose as per your requirements.
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