Selecting the business vehicle

Selecting the type of business vehicle is equally important like selecting the type of business sector.
Type of business vehicle you want can be decided upon various factors like:-

1. Type of business.
2. Ownership & Control.
3. Flexibility.
4. Growth Conditions.
5. Perpetual Succession.
6. Sustainability.
7. Investor protection.
8. Wealth maximization.
9. Income distribution.

There are different types of business vehicles to serve the purpose of entrepreneurs and among them the following are the most common types.

1. Company.
2. Partnership.
3. Trust.
4. Society.
5. Sole proprietaryship.

1. Companies

Companies are the most organized form of business and the popular types of Companies are
(1) Public Limited Companies.
(2) Private Limited Companies.

Companies may also be classified as:
(a) Associations not for profit having license under Section 25 of the Act;
(b) Government Companies;
(c) Foreign Companies;
(d) Holding and Subsidiary Companies;
(e) Investment Companies; and
(f) Producer Companies

Incorporating a Company in India.

Incorporation of Companies in India are governed by office of the Registrar of Companies. There are 20 ROC Offices across the Country and each office have control over the companies in its jurisdiction. The registrations of the Companies are done at the ROC offices, on submitting of all relevant documents and filing of necessary forms. This Company Secretaries are expert in the field of Corporate Governance and can provide assistance in this regard. Setting up of a Limited Liability Company will take 10-15 days, which includes the time of obtaining the Director Identification number, Digital Signature Certificate and Name for the proposed Company. For a Public Limited Company, Certificate of Commencement of Business also have to be obtained within 6 months from the date of incorporation.

2. Partnership.

In this form of organisation, few like-minded persons pool up their resources to form a partnership firm. To get a more precise view of the term ‘partnership' one should analyse Section 4 of the Partnership Act, 1932, which defines partnership as ‘The relation between persons who have agreed to share profits of a business carried on by all or any of them acting for all".

The main features of partnership are:

a) Contractual Relationship-
Since partnership arises out of agreement between persons, only those persons who are competent to contract can be partners.

b) Existence of business
There can be no partnership without business. The persons who have agreed to become partners must carry out some business activity

c) Sharing of profits
The agreement to carry on business must be entered into, with the object of making a profit and sharing it among all the partners.

d) Mutual agency
The business must be carried on by all the partners or by any one or more of them acting for all the partners.
Thus each partner is both an agent and a principal for all other partners.Partnership is an ideal form of organisation for medium scale business operations which require greater amount of capital and risks than sole proprietorship or Hindu Undivided

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