Choose your Business Structure


The business structure you choose will have legal and tax implications. A business enterprise can be owned and organized in several forms. Each form of organization has its own merits and demerits. The ultimate choice of the form of business depends upon the balancing of the advantages and disadvantages of the various forms of business. The right choice of the form of the business is very crucial because it determines the power, control, risk and responsibility of the entrepreneur as well as the division of profits and losses. Being a long term commitment, the choice of the form of business should be made after considerable thought and deliberation.

1. Sole Proprietorship

A sole proprietorship is the most basic type of business to establish. You alone own the company and are responsible for its assets and liabilities. Learn more about the sole proprietor structure.

2. Joint Hindu Family Business

In this form of business ownership, all members of a Hindu undivided family do business jointly under the control of the head of the family who is known as the 'Karta' and members of the family known as 'Co-parceners'. Thus, the Joint Hindu Family firm is a business owned by co-parceners of a Hindu undivided estate. Read on....

3. Private Limited Company

A limited liability company designed with full ownership of the entrepreneur as well as private shareholders, which has benefits of limited liability while keeping ownership restricted. Learn more about how Private LCs are structured.

4. Public Limited Company

A limited liability company is designed with a mix of ownership of the entrepreneur as well as public shareholders. Learn more about how Public LCs are structured.

5. Cooperative

People form cooperatives to meet a collective need or to provide a service that benefits all member-owners. Learn more about how cooperatives are structured.

6. Partnership

There are several different types of partnerships, which depend on the nature of the arrangement and partner responsibility for the business. Learn more about how these are structured.

Limited Liability partnership:A new corporate structure that combines the flexibility of a partnership and the advantages of limited liability of a company at a low compliance cost and is governed by the provisions of the Limited Liability Partnership Act 2008.