Registering a business with the relevant authorities is of great importance. Any new business needs to operate within the boundaries of legal compliance. Navigating the detailed process of company registration in India can be a challenge for the average business owner. Yet, there are specific steps that can be followed to get a hassle-free experience. You can simply turn to us at MPVD & Associates for fast and reliable company registration services. We offer both domestic and company registrations for Indians as well as foreign entrepreneurs at competitive rates. Our online services also ensure fast and convenient accreditations to add to your convenience.
To give you some perspective, we have created a handy guide detailing all the essential steps for company registration. Go through it if you want to gain some information about what needs to be done.
But first, let us shed some light on why registering your business is essential. Read below for some insight.
Reasons to Go for Company Registration in India
Registering your company as a valid and legal entity comes with distinct advantages. These include –
– Enhanced credibility – A registered business is more trustworthy in the eyes of its customers, and financial institutions. Making things official is also necessary to be taken seriously by any potential investors. Many businesses are now seeking online company registration in India for faster processing.
– Legally valid – According to Indian law, any registered company is a legal entity and has its rights. As a result, the owners of the company are not directly held responsible for any liabilities during the business’s operations.
– Better for raising capital – A registered company is well-positioned to gain capital from financial bodies and investors. Most credible angel investors and venture capitalists prefer funding companies with valid registrations.
– Convenient for continuity – A registered company can carry on with its operations even if there is a change in ownership. As a result, continuity is maintained and there are no sudden impacts on operational integrity.
-Tax perks – Registered business entities are entitled to receiving significant tax exemptions and deductions. Moreover, the Indian government provides some incentives for MSMEs and startups to curb tax-related liabilities.
As evident from the points above, there is a collection of tangible benefits of company registration in India. But, before you proceed to the actual registration steps, read below for the classification of different company structure types.
The Main Company Registration Types in India
Picking the appropriate business structure is quite essential before registration. Your business type should match up to the type of entity it gets classified as. The main registration types in India are –
1.Public Limited Company (Ltd) – Companies that intend to get funded by the public, usually big businesses, can be classified as public limited companies. These must have at least seven shareholders and three different directors.
2. Private Limited Company (Pvt Ltd) – Most startups and small businesses with limited liability requirements are suitable for Pvt Ltd classification. These companies can have as many as 200 shareholders.
3. One-Person Company (OPC) – An OPC classification, as the name suggests, is designated for single entrepreneurs. It is apt for those who want their company to be a corporate entity with limited liability.
4. Partnership Company – A partnership firm registration is most well-suited for a small business run by multiple partners. This company type has unlimited liability.
5. Limited Liability Partnership (LLP) – LLP registrations are the best fit for small businesses and service firms. It has fewer compliance requirements and offers limited liability.
6. Sole Proprietorship – Individual businesses that do not have legal entity status are classified as sole proprietorship registrations. Here the owner has to be liable for the entity.
Now that you have an idea about how registered businesses can be classified based on certain criteria, explore how the registration process works below. If you have decided on the company type, contact us for swift and hassle-free online company registration in India.
The Stepwise Method for Company Registration in India
The fundamental steps of company registration are shared below. These entail –
Step 1 – Get a Digital Signature Certificate (DSC)
The very 1st step for company registration is getting a Digital Signature Certificate (DSC) made. This document is necessary for processing the digital signage of documents which are submitted to the Ministry of Corporate Affairs (MCA). The purpose of the DSC is to ascertain that submitted documents are secure and genuine.
How To Get a DSC
- A DSC can be applied for online through designated platforms like NSDL and eMudhra.
- A business owner has to submit their identity proof, passport-size photograph and address proof.
- Biometric verification is carried out before the issuance of DSC.
- DSC received with a validity range of 1 to 2 years
- Note that a Class 3 DSC is the best choice for businesses
Step 2 – Get your Director Identifier Number (DIN)
A business’s Director Identification Number or DIN is exclusively for a company’s directors to get. The MCA issues it to monitor which companies a director is affiliated with.
How to Get a DIN
- The DIN has to be applied for at the registration time via the company registration form SPICe+.
- Directors must provide their address proof and identity proof.
- DIN application is approved by MCA which issues it to the applicant directors.
- The DIN number has a lifetime validity.
Step 3 – Select the Company Name and Get it Approved
Business owners need to create a unique company name that is compliant with the MCA naming guidelines for company registration in India. The more specific and uncommon your company name is, the less likely it is to get into legal hurdles with already existing companies.
How To Get Company Name Approved
- Visit the MCA portal and launch the RUN (Request Unique Name) service.
- Include a few other options along with business goals.
- The MCA will either approve the application or ask for modifications.
- Checking name availability beforehand is a better option for best outcomes.
Businesses can also apply for company name approval through the SPICe+ form for Indian registration.
Step 4 – MoA and AoA Drafting
The Memorandum of Association (MoA) and Articles of Association (AoA) are two documents that list the goals of a company and its regulations. They have a direct influence on the functioning and structure of a company.
- Memorandum of Association (MoA) – The MoA highlights the company’s key goals, its fundamental functions, and scope of work.
- Articles of Association (AoA) – AoA contains guidelines for the company’s operations. It also has information on shareholder rights, roles of directors, and decision-making criteria.
Step 5 – SPICe+ Form Submission
SPICe+ stands for Simplified Proforma for Incorporating a Company Electronically, and its form is issued by the MCA.
How to File SPICe+
- Enter the director and company details and information on its capital model.
- Attach documents obtained in earlier steps i.e. MoA, AoA and DSC.
- Apply for the company’s PAN and TAN documents.
- Submit the SPICe+ form.
A Certificate of Incorporation is then issued by the MCA, confirming the existence of the company in legal terms. This certificate is crucial for all of the company’s dealings as it proves the validity of its being a registered entity.
Step 6 – Get PAN and TAN
PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number) are documents required for processing taxes. These are prerequisites for filing taxes and initiating TDS deductions.
- Both PAN and TAN applications are found in the SPICe+ form.
- PAN and TAN numbers are issued by the Income Tax Department after their approval process.
Step 7 – GST registration (if required)
GST registration is a must for businesses with turnovers of more than 40 lakh rupees. The slab is 20 lakh if the company is designated as a service provider.
GST Registration Process
- Visit the GST website (gst.gov.in)
- Add relevant business details
- Submit address and identity proof
- You will get the GSTIN number once approval is done.
- Having a GST number makes sure you are being transparent in your dealings.
Step 8 – Business Bank Account Opening
Any company needs a business bank account to process and handle its transactions. It has to exist so that business and personal transactions stay separate.
Bank Account Opening Documents
- Certificate of Incorporation
- PAN and GST registration
- Directors’ KYC documents
- MoA & AoA
Step 9 – Additional Compliance Requirements
The newly incorporated company has certain compliance and legal requirements. These include –
- Auditor appointment – An auditor has to be appointed within 30 days of company incorporation.
- Business commencement – The company has to file Form INC-20A within 180 days.
- Annual filings – The company needs to file its annual returns and financial statements with the MCA.
- Income tax filing – The corporate tax has to be filed annually on time to prevent penalties.
Rely on Us for Fast Online Company Registrations
Are you a budding entrepreneur looking to register your own company anytime soon? We can help you out with our company formation and registration services. Our precise and hassle-free services for online company registration in India ensure fast turnaround times of just 7 to 10 days. That’s all the time you will need to have your own registered entity, ready to do some business. We take all the physical effort out of the equation. Our experts will provide all the guidance you need throughout the process.