Plain-English guides to registering, running and staying compliant as a business in India.
A partnership firm does not stop being a partnership because it was never registered. The partners can trade, sign contracts and earn profits together. What they lose is the ability to go to court to enforce those contracts. Section 69 of the Indian Partnership Act, 1932 closes the court door to an unregistered firm and
A limited liability partnership (LLP) suits many small businesses: limited liability, flexible profit sharing and lighter compliance than a company. It starts to pinch when the business wants outside equity. Investors expect shares. Employee stock options need shares. Many funds and lenders are set up to deal with companies, not LLPs. At that point partners
An LLP agreement is the contract between the partners, and between the partners and the LLP, that sets out who contributes what, how profits are shared, who manages, and how people join and leave. Section 23 of the Limited Liability Partnership Act, 2008 makes it the governing document for those relationships, and it must be
Authorised capital is the ceiling: the maximum share capital your company may issue, as written in its memorandum. Paid-up capital is what shareholders have actually paid for the shares the company has issued. A company registered with ₹10 lakh authorised capital and ₹1 lakh paid-up has issued shares worth ₹1 lakh and has room to
Udyam registration is the government’s record that your business is a micro, small or medium enterprise (MSME). It is done online on the Udyam portal using the owner’s Aadhaar and the business’s PAN, with investment and turnover figures drawn from income tax and GST records. There is no government fee, and the registration does not
DPIIT recognition is the government’s confirmation that your business counts as a “startup” for the Startup India programme. Since February 2026 the test has been set by notification G.S.R. 108(E), which replaced the 2019 definition. The short version: an Indian private limited company, LLP, registered partnership firm or cooperative society that is under ten years
Starting a business in India comes down to three layers, done in order. First, choose a legal structure. Second, register that structure, if it needs registering. Third, take the registrations your activity triggers: tax, labour, state and sector. Most of the delays people complain about come from doing these out of order, for example signing
If you run a small business alone or with one or two others, the real choice is usually between three forms: a sole proprietorship, a partnership firm and a limited liability partnership (LLP). The first two are cheap and quick to start but leave your personal savings exposed to the business’s debts. The LLP costs
For most first-time founders the choice comes down to how much structure you want in return for how much credibility. A public charitable trust is the quickest to set up and is run by a small group of trustees. A society is a membership body with an elected governing body. A Section 8 company is
A company’s registered office can be almost any real address where the company can actually receive letters and notices: a rented office, a shop, a factory, your own home, or a desk in a coworking space. What the MCA cares about is not the type of premises but the paperwork behind it and whether official
