Before knowing how to register a business in India, first of all, you need to understand what are the types of company you can register in India?
There are 5 types of companies in India; all are different from one another in different aspects.
- Private limited company
- Limited Liability Partnership (LLP)
- One Person Company (OPC)
- Sole proprietorship
- General partnership
Procedure to register a company in India:
To make it simple for registering a business in India, Ministry of Corporate Affairs (MCA) had introduced INC-29 form.
With the form of INC-29, company registration has been merged few processes like obtaining business name approval, Director’s Identification Number (DIN) and incorporation application into one single process.
This process has made the process of company incorporation very easy. It just takes maximum seven days for company incorporation nowadays.
Here is the process for registering a company in India:
Obtain Digital Signature Certificate (DSC) from MCA:
The very first step is to apply for the digital signature of the directors also called as DSC; it is an e-signature to help you complete the new company registration process online. Hardly, it takes around 2 days to obtain DSC after submitting the documents.
The Information Technology Act, 2000 has a provision for use of digital signatures on the documents which have been submitted in electronic form in order to ensure the security and authenticity of the documents that are filed electronically.
This is actually the secure and an authentic way to submit a document electronically. All the filings will be done by the companies/LLP under MCA-21 e-governance programme are required to be filed using digital signatures by a person who is authorized to sign the documents.
Director Identification Number (DIN number), Name approval, Memorandum and Articles of Association (MoA & AoA), registered office verification, appointment letters and declaration.
Filing of INC-29:
When all the documents are ready, we need to file the forms for company formation after which we will get the certificate of incorporation.
Issuing of incorporation certificate:
Once you got your certificate of incorporation, we can get the pan number and we can open the bank account along with it.
Documents which are required to register a company in India:
Following documents has to be submitted for company registration in India. They are as follows:
- Pan card copy
- Passport sized photograph
- Notarised rental agreement in English
- NOC (No objection certificate) from the property owner.
- Voter’s ID/Passport
- Bank statement/Mobile bill or telephone bill/Electricity or gas bill.
- Utility bill for the registered address.
Here are the few tips when you are new to the business world:
- If you are a start-up, you might have doubts about which type of company to choose, the better option is to go with a private limited company because you can receive more external funding in your startup and also can issue stock options to your employee.
- When you plan to register a private limited company, then you must have at least two directors and shareholders and also should have a maximum of 15 directors and 50 shareholders.
- If you start and wish to raise funds or offer Employee Stock
Ownership Plan (ESOP), then a private limited company is a must. But if you’d like to start a small business which will not attract external funding in near future, then you can move with LLP.
- In the other side, LLP is a bit cheaper to form and very low cost to maintain the accounts. But, once you decide to register an LLP, you will get several licenses and approvals in its name (Professional tax or shops and establishment registration, for example). If at any point, you want to switch from LLP to a private limited company, considerable effort will be required.
- Without any hassle, you can register your company when you choose the professional experts who can do your process with higher business efficacy.
- Many have doubts that whether they can register the company on home address, yes, you can register with your home address, but you will have to provide the utility bill for it and if your place is a rented one, need to provide rental agreement and NOC.
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