A company is a public/privately owned business establishment managed and operated by an individual or group of individuals, also known as stakeholders, who independently hold the business; a privately held company offers limited liability to its partners along with some of the restrictions on the ownership.
As in the previous few years, we are towards our startup and sole proprietorship revolution. The demand for Company Registration in India has greatly increased compared to the previous decade. Nowadays, youth actively participate in this culture and people are slowly turning from job seekers to job providers.
At the time of doing a startup, there are a few notable legal norms that should be kept in mind to make the startup an established entity as demanded by the Government of India Act as per Companies Act 2013.
In today’s article, we will discuss simple ways to register a company in India and which type of company structure is needed to avail of the benefits.
Different types of companies and their business structures
According to the companies act 2013, companies in India are broadly divided into 4 categories.
|One person company
|Introduced in 2013, the best way to start a company is in the case of one promoter/owner.
It is best suited for sole owners looking to limit their liability.
No tax on dividend distribution.
|Limited liability partnership (LLP)
|This structure is much suggested to service provider businesses with low investment.
Liabilities are limited to the agreed contribution.
LLP companies are common in law, accounting, medical practices etc.
One may lose the assets in partnership but not the outside of it.
|Private limited company
|This structure best suits companies with high turnover.
The company is a different legal entity.
Private limited companies are separate entities from their directors, promoters, and other stakeholders.
Higher benefits on depreciation.
Multiple options for fundraising are available.
|Public limited company
|An annual prospect report is required.
Members cannot be more than 200.
Minimum 15 lacs as the paid-up capital.
Must be listed on the recognized stock exchange, and securities must be traded publicly.
Essential requirements to register a Company in India!
In order to start any particular thing, there are a few conditions required before initiating. A similar case applies when it comes to registering a company in India, which is stated below.
Title of the company
To qualify, the first and foremost step of the registration, the name clause, should be stated in accordance with making the company legitimate.
Registered office mark
Address of the place from where the company is going to carry out its operations and will be treated as the place where all the legal and technical whereabouts happen; an address should be filed at the registrar of the company.
Members and Directors of the company
As per the norms and mandates of the Companies Act 2013, to get a private company legally sound, there must be a minimum of at least 2 active members and a maximum of 200 members. Every director should be allotted a Director Identification Number ( DIN ) approved by the Ministry of corporate affairs (MCA). At Least one of the directors should be a resident of India, which simply means that one should have stayed in India for more than or atleast 182 days in India as per the existing calendar.
How to Register for a Company in India?
After the completion of all the essential requirements and official documents, you can finally register for the company of your dreams; starting with
Application of a Digital Signature Certificate ( DSC ),
You can easily apply online for DSC. IT Act 2000 has separate provisions regarding the usage of Digital Signatures in an electronic form this is considered as the secure way to file.
(Warning – You can only use certificates issued to you in your legal name; also, it is illegitimate/ illegal to use another person’s DSC.)
Issuing of Director Identification Number ( DIN )
The notion of a Director Identification Number was first introduced in the year 2006 after the amendment of the 2006 companies acts when two new sections, i.e. 266A and 266G, were introduced that say it is mandatory to have DIN.
Applying for Name Availability,
This is considered a significant step to check the availability of company names. The name of the company that you are looking for must be available and should not be registered earlier.
Registration on the MCA portal
In order to apply for company registration, fill out the SPICe+ form and submit it on the MCA portal. The director of the company has to register on the MCA portal, after registration, log on to obtain services offered like e-forms and viewing of documents. Fill in Part-A, and after submitting the name in Part-A, it is reserved for 20 days, and the company must file Part B of the SPICe+ form.
(Note: Company and director details along with documents attached and DSC should be submitted)
Filling of EMOA and EAOA
It is required to use E-MOA (INC-33) and E-AOA (INC-34) when subscribers are upto 7 in the following scenarios.
- Individual subscribers are Indian
- Subscribers are foreigners
- Non Individual subscribers based in India
Applying for PA N and TAN of the entity
The permanent account number is mandatory for registration and a Tax deduction, and the collection number is a mandatory 10-digit number responsible for TDS.
Issuance of Certificate of Incorporation by ROC along with PAN and TAN
After the full and final approval of SPICe forms, the income tax of India will directly issue the certificate of incorporation along with PAN and TAN.
With all these steps, you can start your Private Ltd company. It is advised to make an eminent choice for further growth and success.
Official Documents Required for Registration
After informing about the process, there is little documentation required in the registration process that one must carry.
- Identification proof – PAN card or Passport
- Address proof – Aadhar card, Ration card, Driving license or Voter ID card
- Residential Proof – Electricity Bill or Bank account statement
- Rent agreement with Notarized stamp
- No objection certificate from the property owner
- Copy of Sale Deed / Property Deed
- DIN and DSC of all the directors
- Memorandum of Association (MOA) which contains the objective of the company along with the liabilities of the members of the company.
- Article of Association (AOA) laws and regulations that will govern the company.
Registration of the company and choosing the right structure for your business are both equally important. Registering your company at the MCA portal will open new doors of opportunities like legal recognition, tax benefits, and easy loans.
In the article above, we have thoroughly discussed “How to register a company in India” along with all the documents and necessary requirements. We have also discussed 4 different categories of companies and what suits an entrepreneur best depending on the goals. We have analysed “ The Corporation Company type” offers the best protection to its entrepreneurs from personal liability.
Suggested Read: Different Types of Company, meaning & Classification
Q.1 What is the cost to register a company in India?
Registration costs of the company will vary from INR 6,000 to INR 30,000.
Q.2 Is audit compulsory for Pvt ltd company?
Every private company must get the documents audited annually.
Q.3 What are the benefits of a private Ltd company?
- Limited liability
- Easy access to funds
- More borrowing capacity
- Multiple opportunities
- Easy exit
Q.4 What is the number of directors required in private companies?
- Minimum – 2 directors
- Maximum – 15 directors