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Investor Entity Options

by orbinside
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Career and Investment Planning

Entrepreneur Journey

While starting entrepreneur journey, we come across lot of things like Business Model, Investor Entities, Business Entities, Business Entity Structure, Business Industry or Sector and so-on. Among them, everything has its own priorities as everything is important. We need to plan for every aspect so that we can lay the foundation of evolving and sustainable business considering the best options and opportunities available to us and whenever we need to pivot, we are flexible enough to be ready for it. 

Since we will be talking about Investor Entity options available to us, we are glad to acknowledge that we can be investor as following entities falling under investor categories in India as explained below: 

  1. Individual or Individual Group Investor Entity Category: 
    1. Individual 
      1. Individuals 
      2. Angel Investors or HNI – High net worth Individuals 
    2. Private Family Trust 
    3. HUF – Hindu Undivided Family 
  2. Business Investor Entity Category: 
    1. Partnership firm or Limited Liability Partnership
    2. Private Limited Company 
    3. Public Limited Company 

Individuals are any individuals ready to invest in a Business Entity as promoters or investors etc. They are investing through following scenarios: 

  • through friends’ reference or be part of any business investor group as Seed Investors.
  • Invest in entities using Stock Exchanges by purchasing Entity shares publicly. 

Angel Investors or HNI – High net worth Individuals

Angel Investors or HNI – High net worth Individuals are investing through following channels: 

  • Through Investment Funding Platform. 
  • By participating in Investment Funding Rounds. 
  • using Stock Exchanges by purchasing Entity shares publicly.

Private Family Trusts

Private Family Trusts are being formed to accumulate family income and assets and investment by non-Hindus persons whereas there is no religion-based restriction over forming Private Family Trusts. Investment channels remain the same, but Private Family Trust provides an extra layer of protection as investment will be performed under the name of trust and managed by trustees for the benefit of beneficiaries. Further, the concept of private family trust will be detailed in a separate article.  

HUF – Hindu Undivided Family

HUF are being formed to accumulate Joint-family income and assets and investment by Hindu persons It has religion-based restriction over forming HUF as it covers only Hindu, Sikh, and Jain religion. Investment channels remain the same, but HUF provides an extra layer of protection and benefit as It acts as a separate entity with benefits of Individual and investment will be performed under the name of HUF and managed by its Karta for the benefit of family. Further, the concept of HUF will be detailed in a separate article. 

We have explained Investor entity options as an entrepreneur in this article. we have covered only Individual or Individual group investor entity category in this article, but remaining investor entity as mentioned under business investor entity category will be discussed and explained in upcoming articles of Career and Investment Planning Series are they are also types of business entities which anyone may pursue to start its own business by registering as the same. 

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