Regulatory Affairs For Startups
SUBMITTED BY: GROUP 1
KAMINI KUMARI - 2110120011
MANSI SRIVASTAVA - 2110120014
PRATYAKSHA SINGH - 2110120018
RIDHIMA JAIN - 2110120020
SAMAR PRATAP - 2110120036
SHUBHAM GUPTA - 2110120026
SIVA S. RAM - 2110120028
Types of Legal Formats :
1. Sole Proprietorship
• A sole proprietorship is a business that can be owned and controlled by an individual, a
company or a limited liability partnership.
• Pros:
• Simplified business ownership
• Easier processes and fewer requirements for business taxes
• Easily dissolvable
• Cons:
• Lack of Resources
• Unlimited Liability
• Dependence on owner
2. Partnership
A partnerships
is a formal
arrangement
by two or more
parties to
manage and
operate a
business and
share its
profits.
Pros:
Cons:
Division of
work
No limited
liability
Easier
formation
Lack of public
trust
Risk sharing
Difficulty in
decision
making
3. Corporation
A corporation is a distinct legal entity formed and existing under state law. It is subject to the
business corporation laws set forth by the states in which they are incorporated.
Pros:
• Suitable legal structure for raising capital
• Simple
• Corporations may attract investors with their ability to issue stock
Cons:
• Formation process
• Formalities in formation and management must be adhered
• Competitive market pressures
4. Limited Liability Company
A limited liability company is a form of business structure which incorporates elements of
both a corporation and a partnership
• Pros:
• Limited liability
• Flexibility
• Reduced corporate formalities
• Cons:
• Complexity
• Equity compensation issues
• Fundraising limitations
Legal Provisions Under Corporate
Independent corporate existence
Limited liability
Perpetual succession
Transferable shares
Separate property
Access to money market
Legal Provisions Under cooperative and trusts (NGOs).
An NGO -Trust, A Society Or A Section 25 Company
Contract Between Two Parties
Private Trusts- Indian Trust Act Of 1882
Public Charitable Trust -Public Trust Act State And Indian
Trusts Act, 1882
Public Trust - Income Tax Exempt
If you were to start an enterprise,
what legal format will you choose,
and why ?
If I would have to start an
enterprise, I would have a
limited liability company.
• it restricts the responsibility of all
shareholders.
• solely liable for its own
obligations and responsibilities.
• Transferability of Shares
• Perpetual Existence
B corp.
•
A B corp. — also known as a public benefit
corporation — is a type of for-profit
corporation that also must have a goal to
benefit the community and/or the
environment.
•
This reduces the liability & increased
investment opportunities.
•
The rules for qualifying as a B corp. can
vary from state to state, but, in general,
include two main requirements:
a. A goal to produce a public benefit.
b. Creation and publication of a benefit
report.
C Corp.
• A C Corporation legally separated owners' or
shareholders' assets and income from that of
the corporation.
• C corporations limit the liability of investors
and firm owners since the most that they can
lose in the business's failure is the amount
they have invested in it.
• C corporations are mandated to hold annual
meetings and have a board of directors that is
voted on by shareholders.
S Corp
An S corporation, also known as an S subchapter, refers to a type of legal business entity.
Requirements give a corporation with 100 shareholders or less the benefit of incorporation
while being taxed as a partnership.
Corporate taxes filed under Subchapter S may pass business income, losses, deductions, and
credits to shareholders.
Shareholders report income and losses on individual tax returns and pay taxes at ordinary tax
rates.
LLC
The limited-liability company (LLC) is a relatively new type of entity
designed to afford the same benefits as does the S corporation.
The LLC is similar to an S corporation in that it enjoys the tax advantages
of a partnership and the liability protections of a corporation.
Owners are neither proprietors, partners, nor shareholders; instead, they
are members.
Legal Provisions like 501(c)
501(c) is a section of the federal regulations which list the type of companies that
can be exempt from paying taxes according to the Internal Revenue Service (IRS).
• Section 501(c) of the Internal Revenue Code designates certain types of organizations as tax-exempt—
they pay no federal income tax.
• Common tax-exempt organizations include charities, government entities, advocacy groups,
educational and artistic groups, and religious entities.
• The 501(c)(3) organization is probably the most familiar entity.
• Donations to certain qualified tax-exempt organizations may be deductible from a taxpayer's income.
Types of 501(c) are:
501(c)(1): Any corporation that is organized under an act of Congress that is exempt from federal income tax
501(c)(2): Corporations that hold a title of property for exempt organizations
501(c)(3): Corporations, funds, or foundations that operate for religious, charitable, scientific, literary, or
educational purposes
501(c)(4): Nonprofit organizations that promote social welfare
501(c)(5): Labor, agricultural, or horticultural associations
501(c)(6): Business leagues, chambers of commerce, etc., that are not organized for profit
501(c)(7): Recreational organizations
Producer Company
• Basic agricultural commodities
• Manipulation of primary produce
• Business of machinery, equipment
• Eligible for financial assistance
• Bonus shares in proportion to equity shares
One Person Company
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• Micro businesses and entrepreneurship
• Limited liability
• Proprietorship conversion
• Cannot be converted into a company under Sec 8
• No NBFI activities
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YOU