Incorporating a business means turning up proprietorship or partnership into a company which is recognized by the state of incorporation of a business. With incorporation, a company becomes its own legal business apart from the individuals who founded the business. Incorporation allows the company’s owner/s to create a separate legal entity for transacting. New business entity transforms the current business which ensures more credibility, potential customers, vendors and employees.

Importance of Incorporating a Business

  • •  Primarily, the benefit of  business incorporation is limited liability. When a small business is owned, a lot of money is invested into getting it launched and also keeping it running smoothly. 
  • •  The owner himself is responsible for any debts and losses the business may accumulate entirely. 
  • •  When a business is incorporated, the owner is only responsible for the amount of money he personally invest. Personal assets cannot be used to overcome the debts and liabilities of your business.


The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. Every asset of the business is owned by the proprietor and all debts of the business are the proprietor’s.

In Partnership two or more individuals start business and pool their money, skills, other resources, also share profit and loss. It may be registered or not registered.

LLP exhibits elements of partnerships and corporations. LLP is preferred by Professionals, Micro and Small businesses that are run by closely held members or by family members.

One person company gives the young businessman all benefits of a private limited company. OPC provides a whole new bucket of opportunities for entrepreneurs who want to start their own ventures.

Private Limited Company is the most popular legal structure for businesses, should be chosen who wants to scale business in future. Private Limited Company limits the liabilities of its shareholders.

A company registered under this section shall amalgamate only with another Company registered under this section and having similar objects. It intends to apply its profits,  or other income in promoting its objects.

In Indian Subsidiary of foreign company shareholding and investment is from any individual/entity which is Non-resident. Main criteria is a minimum of one Indian Director who is a Indian Resident is required for incorporation along with an address in India.

Producer Company indicates that only certain categories of persons who are known as primary producer, can become shareholders in the Producer Company.