Not much information is available to entrepreneur about the company Registration Process, specially in India they usually rely on an Agent or a Lawyer to get it done. But its very important for each and every individual to know what he/she is getting into. The form of Business Entity you choose, can have more far implications than you think. Depending on your Business entity investor will choose whether to invest in your company or not, exit strategy depends on it, liability to the owners and the potential growth benefits too depend on the entity you choose.
Options for Registering your Company
You can choose your Business Entity from the following types available in India
1. Sole Proprietorship
If a Single individual owns a business without any specific formalities or Business registration, still that business will be by default a Sole Proprietorship. A Proprietor(owner) is personally responsible for the debts and obligations of the Business as well as the actions of employees.
Complete stuff here http://www.startupfreak.com/sole-proprietorship-procedure-business-licenses/
2. General Partnership
When you Share the profits and losses of a business with one or more other individual (or entities), unless you have formally created a statutory entity, the business is by default a General Partnership. Each partner is liable for the acts of other partners whether it is loss or profit or debts which in partnership. This means that each partner could be held liable for the entire amount of partnership and all their personal assets are at risk.
A Corporation is a legal entity which is registered with laws of state or national jurisdiction. It is manage by board of directors, which is headed by Chairman. Owners of the Corporation are referred to as share holders and are liable only to the extent of their contribution to the business. That means if your business goes in loss you lose only your stocks/share and your personal assets are safe.
4. Limited Partnership(LP)
Limited Partnership is a legal entity which is registered with laws of state or national jurisdiction. It has both General Partner who manages the company and Limited partners who are passive investors. So General Partners will be more liable than the limited partners.
5. Limited Liability Company(LLC)
Limited Liability Company is a legal entity which is registered with laws of state or nation jurisdiction. Like a corporation it provides limited liability to its members. Owners are referred to a members and one or more members can run the company. and ownership is usually in terms of percentage.
Detailed explanation here http://www.startupfreak.com/how-to-register-llp-in-india/
6. Private Limited Company
Private Limited Company is a type of corporation where you May have 2–50 shareholders; shares are held privately and can not be offered to public. A private limited company’s disclosure requirements are lighter, but for this reason its shares may not be offered to the general public and therefore cannot be traded on a public stock exchange.
Awesome explanation on how to Register your startup as Private limited company in India here http://www.startupfreak.com/4-step-registering-your-startup-in-india/
7. Public Limited Company
Public Limited Company is a limited liability company whose shares are freely sold and traded to the public, with a minimum share capital. This is the major distinguishing feature between a private limited company and a public limited company. Most companies, particularly small companies, are private.
8. Public Sector Unit(PSU)
Public Sector Unit may be a public limited company listed on stock exchanges with major ownership by a state government or a central government of India.
9. Family Business
As the name indicates Business is managed by the family members and is passed on to the next generation. This entity come under the Hindu Undivided Family Act.