ENTITY

An entity is not a person; it is either a Company or a Corporate. Any entity which is registered in India is known as Indian Entity. There are various types of Indian Entity specified under the various statutes. The Indian entity is also entitled to right and responsibilities which have been conferred by the constitution as well as the act. Different types of Indian entities are as follows:

PRIVATE LIMITED COMPANY

Section 2(68) of the Companies Act defines Private Limited Company, private companies are those companies whose article of association restricts the transfer of shares and also restraints the public at large to subscribe their shares.

The Private Limited Companies are those companies where the number of members is more than 2 but not more than 200. There is no minimum capital is required for the establishment of a private company.

PUBLIC COMPANY

According to the Companies Act, Public Limited Company can be formed with a minimum of 7 members. There is no restriction with regard to the transfer of shares. A public limited company is liable for public disclosures and various compliances other authorities like SEBI and RBI.

ONE PERSON COMPANY

This entity has been introduced under the provision of Companies Act, 2013. This is basically a company formed by a single person, with a corporate framework, in this the sole investor can establish a company with limited liability and the mitigation of risk of the company is solely attached to the liability of shares of that individual person.

PARTNERSHIP

The Partnership is another type of entity which was formed under Section 4 of the Indian Partnership Act. The persons in the individual capacity are called partners wherein the collective unit of their partnership is called a partnership firm. A partnership firm is established by two or more persons by entering into a partnership agreement. The party, herein, agrees to equally share the loss and profit being accrued in that partnership firm. Every Partner will be individually and severally liable for the acts of the Partnership Firm.

LIMITED LIABILITY PARTNERSHIP (LLP)

Limited Liability Partnership is being governed by the Limited Liability Partnership Act. The LLP is the combination of the Company and Partnership firm. Unlike Partnership firm, the liability of partners is limited to their individual act, i.e., a partner will not be liable for an act done by other partners.  The LLP cannot raise capital from the public by issue of an IPO.

CONCLUSION

Apart from the aforesaid liability which has been defined under the statutes, apart from the statutory rights and liabilities, the entities are also conferred with other legal rights and liabilities. Entities have the right to sue any individual or other entities and the entities can also be sued by any individual or by any other entity.

During the legal proceeding, these entities can be represented by their authorized representative before the courts and other competent authorities. The authorized representative is appointed either by a board of resolution, authorization letter or by Power of Attorney. Although presenting a legal entity does not make the Authorized Representative liable for actions of the entities.

However, in accordance with law prescribed in statues, there are the circumstances, wherein the partner or director of the entity becomes liable for the actions of the entity.