Business License Service In Chandigarh

What is incorporation of entity?

Incorporation of an entity is legal process of forming an entity as a separate legal person, distinct from its owners or proprietors. Once it is incorporated, it has its own rights, responsibilities and it can sue or be sued independently of its owners

Different types of entities:

There are various types of entities but it can be broadly classified into :

Further classification of these two :

1. Profit Oriented Entities:
2. Sole Proprietorship: Owned and run by single person with no distinction between company and owner with unlimited liability.
3. Partnership: Owned by two or more partners who formally come together to run and manage the organization. It can be General Partnership (Unlimited Liability) or Limited Partnership (Limited Liability).
4. Limited Liability Partnership (LLP): Combination of partnership and company , distinct from owners and limited liability of partners.
5. Private limited Company: 2 and Max. 200 shareholders owns this with limited liability restricted to their shares.
6. One Person Company: Owned by single person with limited liability and it is distinct from owner.
7. Joint Venture: Two or more parties come together for specific project or business.
8. Non- profit Organizations :

According to Section 12A of Income Tax Act, 1961, the income of charitable trust,NGOs and section 8 Co. is exempt from tax,allowing donor to claim deduction U/S 80G.

NOTE: To claim the deduction or exemption below mentioned entities have to be registered U/S 12A & U/S 80G.

1. Trusts: Trust made by simple deed for benefit of public at large. It can be charitable, religious or both.
2. Charitable Society: Minimum 7 persons are required who come together towards common purpose.
3. Section 8 Company : The co. must obtain license from central government. The profits are directed to promote their objective.

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