Choosing the right business model is crucial when you are planning to start a business. Different business structures have their own characteristics and are suitable for businesses of different sizes and needs. Following is an informative presentation of common business types and their nature in India:- www.deekpay.com

**Common types of business**

The form of business organisation you choose will determine how you operate. Here are some of the most common types of business entities:

**Self-employed**

Self-employed people are subject to personal income tax on business profits. Self-employment is the easiest way to set up or dissolve a business and is therefore favoured by self-employed people, self-employed contractors, freelancers and consultants. Self-employment is popular with small businesses as there is often no need to create a separate business entity.

Unlike a limited liability company, a company limited by shares or a limited partnership, a self-employed person does not have a separate legal entity. As a result, the self-employed person is fully liable for the acts of the business.

Any debts of a self-employed person are the responsibility of the owner, and similarly, profits from self-employment go to the business owner.

**Partnership**

A partnership is a formal agreement between two or more people to jointly manage a business and share the profits.

Partnerships can be formed in a variety of ways, and partners may have unlimited or limited liability, depending on the terms of the agreement. There is also a "silent partner" who is not involved in the day-to-day operations.

In a general partnership, each partner is responsible for his or her own legal and financial liabilities. The debts of the partnership are shared by each member, unless otherwise agreed. Profits are usually divided equally, and the details of that division may be specified in the partnership agreement.

**Limited Partnership (LLP)**

Accountants, lawyers and architects often choose to form limited partnerships (LLPs). Law and accounting firms will also use both equity and compensation partner classifications. Salary partners have no equity in the firm and usually receive additional compensation based on performance.

The formation of an LLP requires at least one general partner who is personally liable for the debts of the partnership. The liability of at least one partner is limited to the amount of his or her investment. Unlike active partners, anonymous partners are not involved in the day-to-day management of the firm.

**Limited Liability Company (LLC)**

An LLC protects its owners from personal liability for corporate debts and liabilities. Hybrid businesses and limited liability companies (LLCs) combine the characteristics of a corporation, a partnership, or self-employment.

**Company**

A group of people form a company in order to legally operate a commercial or industrial project. Depending on local company regulations, businesses can be structured in different ways to accommodate tax and financial responsibility considerations. A distinction can also be made between private and public corporations. These two types of corporations differ significantly in terms of ownership, rules and financial reporting.

Corporations are separate from their owners, managers and employees. Most corporations are run for profit, while some are run for charity. Corporations and corporate hierarchies vary from country to country, but there are many similarities.

**Documents required to open different types of businesses in India**

Self-employment does not require registration in India and hence no documents are required. However, for tax purposes, you may need a PAN number and TIN.

A partnership requires proof of business address, proof of identity, certificate of partnership registration, GST certificate, etc.

The following documents are required to form a company:

No Objection Certificate (NoC)

Corporate PAN card

Founder's Agreement

TIN

Non-disclosure agreements

GSTIN

Shareholders' Agreement

Certificate of Incorporation

**Registration of online businesses in India**

All unicorn companies in India had started from scratch. Firstly, you need to visit the official website of the Ministry of Corporate Affairs to start the process. Fill up the DIR3 and DSCl forms. Applying for DIN online is as easy as filling these forms.

When completing these forms, remember that you will need to attach specific documents, including proof of address, proof of employment, passport and education certificates. You will also need to provide a passport photo.

The next step is to apply for a Digital Signature Certificate (DSC). You cannot apply for registration online without a Digital Signature Certificate. Like the DIN, the DSC also requires documentation, including a valid photo ID and all of the above.

**Conclusion**

There are many top businesses to choose from in India. To grow your online business in India, you first need to register your business. But before all that, you need a solid business plan and to choose one of the suitable types of business structures mentioned above.

**Frequently Asked Questions**

Which type of business is more profitable? All types of businesses have the potential to be profitable, you need to choose the type that suits you best.

Why do different types of businesses exist? No two businesses are exactly the same. Different business structures are designed to fulfil different purposes and needs.

What are the different types of businesses in India? Some of the different types of businesses in India include 1. sole proprietorship 2. partnership 3. limited partnership 4. corporation

What types of businesses are most in demand? All types of businesses are currently in demand. The most common form of business in India is self-employment.

What are the five types of business organisations? The five most common types of business organisations are: 1. sole trader 2. partnership 3. limited partnership 4. corporation 5. limited liability company