CS Executive · Setting Up of Business, Industrial and Labour Laws · Selection of Business Organization
Meera and Kabir plan a business in India and want a separate legal entity with perpetual succession, shares that can be freely held by many investors, and registration under the Companies Act, 2013. Which form fits best?
A company incorporated under the Companies Act, 2013 fits best because it is a separate legal entity with perpetual succession and share capital held by members. Partnership firms, proprietorships and HUF businesses do not have a legal personality distinct from their owners.
- AA registered partnership firm
- BA sole proprietorship
- CA company incorporated under the Companies Act, 2013Correct
- DA Hindu undivided family business
Explanation
A company registered under the Companies Act, 2013 is a separate legal person with perpetual succession and share capital. A partnership firm is not a separate legal entity from its partners, and proprietorship and HUF business also lack a separate personality.
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