Different Types of Business Registration:

Different Types of Business Registration

The very first step if anyone wants to start his own business is the registration of business. Most newbie entrepreneurs commit mistakes when their business gets registered. It also sometimes depends upon which kind of business you want to start or what is the nature of your business. Whether you are going to offer services or going to sell some physical or digital products in the market.

For the time being, whatever product or services you have decided to promote, you should take the first step ie. registration of business carefully.

Hence in this guide we are going to explain what are the different options available and which one will be appropriate for your business so that you wouldn’t face any legal or financial issues in future.

There are basically five options available when it comes to the registration of business/ firms or companies.

  1. Proprietorship Firms
  2. Partnership Firms
  3. Limited Liability Partnership Firms
  4. Private Limited Company
  5. One Person Company

Let us understand one by one, in what circumstances we should register our firm as above mentioned options.

Proprietorship Firms:

If you want to start your business individually, you can choose this option. One can easily register and operate his business as a sole trader or himself. You can pay your taxes individually and also can hire the employees under you. You don’t require any other registration for running your business.

However, the sole proprietorship has unlimited liability by means of which all the debt, loans or due payment over firm will be borne by you only if your business fails. In this case, the creditors like the bank or other parties can claim on your personal assets for the recovery of their money.

Partnership Firms:

The partnership firms will be suitable for those who want to start their business in partnership with two or more persons. In this type of business registration, you can allocate the shares in the company accordingly.

But it has also an unlimited liability like sole proprietorship firms. That means all the liability of the business will be applicable to partners of the company irrespective of whatever shares they hold in.

Limited Liability Partnership (LLP):

This type of registration is the same as the partnership firms but the only difference between LLP and partnership firms is that the LLP has limited liability which ensures that the personal assets of directors/ partners will be safe in case of bankruptcy.

Private Limited Company:

This is the most popular form of registration of the businesses and are registered under the Registrars of Companies (ROC) in the respective states. The private limited companies have also limited liabilities. The companies could be limited by shares, limited by guarantee or unlimited liability.

The name of companies can also be registered as public limited companies but you require at least 7 directors to get registered, however, in case of private limited companies you need only two board of directors. There are some key differences between private limited and public limited companies, according to which you can decide whether you should go for Pvt limited or public limited company.

However, the private limited companies are the best option for registering the name of the company. Such companies carry the term Pvt Ltd at the end of the name.

One Person Company:

One Person Company

The One Person company is the combination of sole proprietorship and private limited companies which is registered under The Company Act, 2013 at ROC. If you want to run your business alone along with backup of limited liability, the One Person Companies (OPC) can be more suitable to you.

The entrepreneurs who are capable to manage and operate the businesses individually, OPC provide legal as well as limited liability protection for them.


In a nutshell, you can go with sole proprietorship if you are a self employed like doctors, shopkeeper or traders and otherwise you should go with OPC. Further, if you want to start your business with your friends/ relatives, you should go with Private limited companies or LLP. Hope this guide would have solved all your queries regarding registration of the company/ firms.

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