Business can be done as a sole proprietorship (one man doing business in his name ), a firm which can be partnership Firm or LLP (Registered as Limited Liability Partnership) or a Company (Private or Public. main difference between Partnership firm & Company is its legal set up & legal Liability.
Firm is governed by the Partnership Act & the liabilty of partners is unlimited. This means the personal assets of Partners can be used to meet Firm liabilities. However legal Compliances are less. Now another option is LLP Limited Liability Partnership where Liability is limited as limited company but it has to be registered with Government, Thus legal complainces are there.
Companies can be private or Public registered under the Companies Act, 1956. Private company can be formed by two person & with minumum capital of 1 lac. For Public Company minimum 7 persons are required and minimum capital required is 5 lac. Liability is limited in case of Company.
If u can tell what type of business u r planning...may be I will be able to tell u which legal mode shall be best suited to your case.