How to Register a Company in India?

Starting a company in India can be one of the most exciting and wise decisions for any entrepreneur. India’s growing economy, supportive government policies, access to global markets make it an attractive destination for start-ups and businesses. However, by registering a company involves several legal and procedural steps that must be followed carefully to ensure compliance with the law.

In this article, we will walk you through everything you need to know about registering a company in India, including the types of companies you can form, the documents required, and the step-by-step registration process.

Why Should You Register Your Company?

Registering your company offers several advantages:

• Legal Recognition: A registered company has a distinct legal identity separate from its owners.
• Limited Liability: It protects the personal assets or property of shareholders in case of losses.
• Fundraising Opportunities: Easier to attract investors and raise funds.
• Credibility: Increases the trust and confidence among clients, partners, vendors and other business personnel.
• Tax Benefits: Access to various tax exemptions and government schemes.

Types of Companies Can be Registered in India

Before going to start the registration process, it’s very important to decide which type of company structure best suits your business needs. Here are the main types:

1. Private Limited Company (Pvt. Ltd.)

• Suitable for small to medium businesses.
• Requires minimum two directors and two shareholders.
• Restricts the transfer of shares.

2. Public Limited Company (Ltd.)

• It can raise capital from the public through shares.
• It requires a minimum number of three directors and seven shareholders.

3. One Person Company (OPC)

• Designed for solo entrepreneurs.
• Single shareholder and director.

4. Limited Liability Partnership (LLP)

• Combines benefits of a partnership and a company.
• Minimum two partners required.

5. Sole Proprietorship

• A simple and unregistered business entity.
• Owned and managed by a single individual.

6. Partnership Firm

• Formed by two or more individuals.
• Regulated under the Partnership Act, 1932.

For the purpose of this guide, we will focus mainly on Private Limited Company Registration, which is the most common and preferred structure among startups and small businesses.

Prerequisites for Company Registration

Before beginning the registration process, ensure you have:

• Minimum two directors (for Private Limited Company).
• Minimum two shareholders (can be the same as directors).
• One Indian resident director (i.e., who has stayed in India for at least 182 days in the previous year).
• A registered office address in India.

Documents Required for Pvt Ltd Company Registration

You’ll need to prepare several documents for both the directors/shareholders and the company itself:

For Directors and Shareholders:

• PAN Card (Mandatory for Indian nationals)
• Passport (for foreign nationals)
• Address Proof (Aadhar Card, Voter ID, Passport, Driving License)
• Utility Bills (not older than 2 months)
• Passport-size photographs
• Digital Signature Certificate (DSC)

For Registered Office:

• Proof of Address (Electricity bill, water bill, property tax receipt)
• Rent Agreement (if the property is rented)
• No Objection Certificate (NOC) from the owner

Step-by-Step Company Registration Process

Here’s a detailed breakdown of how to register your company:

Step 1: Obtain Digital Signature Certificate (DSC)

The very first step is to obtain the Digital Signature Certificates (DSC) for all proposed directors. Since the company registration process is online, the digital signature is mandatory for signing electronic documents.

Authorities issuing DSCs include e-Mudhra, Sify, and N-Code Solutions.

Documents Required for DSC:

• PAN Card
• Address Proof
• Passport-sized photograph
• Email ID and mobile number

Step 2: Get Director Identification Number (DIN)

Next, you need to apply for a most essential element which is Director Identification Number (DIN) for the proposed directors.

• DIN can be obtained by filing Form DIR-3.
• For new company incorporations, DIN can be directly applied through the SPICe+ form (discussed below).

Step 3: Name Reservation

Choosing a unique and appropriate name for your company is crucial.

• File the RUN (Reserve Unique Name) form on the MCA portal to reserve your company name.
• You can propose two names in one application.
• Ensure that the name is unique, not identical or similar to an existing company/trademark, and follows the naming guidelines issued by MCA.

It’s wise to search for existing trademarks at the Intellectual Property India portal before finalizing your company name.

Step 4: Drafting the MOA and AOA

Memorandum of Association (MOA) and the Articles of Association (AOA) are important documents:

• MOA defines the company’s objectives and scope of activities.
• AOA contains the rules and regulations for company management.

Both documents must be signed electronically by the subscribers to the memorandum.

Step 5: Filing the SPICe+ Form (INC-32)

The next step is to file the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form on the MCA portal.

SPICe+ is a two-part application:

• Part A: Name Reservation
• Part B: Incorporation, DIN allotment, PAN, TAN, EPFO, ESIC, GST registration, and bank account opening.

Upload the necessary documents, including:

• Identity and address proofs of directors
• Proof of office address
• MOA and AOA
• Declaration by the directors (Form INC-9)

After filing SPICe+, you must pay the applicable government fees and stamp duty online.

Step 6: Issuance of Incorporation Certificate

If everything is in order, then the Registrar of Companies (RoC) after verification will issue the Certificate of Incorporation (COI).

The Certificate of Incorporation includes:

• CIN (Corporate Identity Number)
• Company Name
• Date of Incorporation
• PAN and TAN (automatically generated)

Once you have the COI, your company is legally recognized!

Post-Incorporation Compliances

Once your company is registered, there are several compliance requirements you must follow:

1. Opening a Bank Account

Use the Certificate of Incorporation, PAN, and various other documents to open a current account in the company’s name.

2. Appointment of Auditor

The auditor must be appointed within 30 days of incorporation.

3. GST Registration

If your turnover is expected to exceed the limit of threshold (currently ₹40 lakhs for goods and ₹20 lakhs for services), register for GST.

4. Commencement of Business

File INC-20A (Declaration for Commencement of Business) within 180 days from the date of incorporation.

5. Statutory Registers and Records

Maintain statutory registers for shares, members, directors, etc.

6. Annual Compliance

File annual returns with the RoC and conduct board meetings as per the Companies Act, 2013.

Timeline for Company Registration

Typically, if all documents are in order, the company registration process in India takes around 7 to 15 working days:

• DSC: 1-2 days
• Name Approval: 2-3 days
• Filing SPICe+ and Approval: 4-7 days
• COI Issuance: 1 day after approval

However, delays may occur if there are discrepancies in the application or if the RoC requires additional information.

Cost of Company Registration in India

The cost of registering a Private Limited Company can vary based on several factors:

Approximate Total: ₹8,000 to ₹25,000

Tips for Smooth Company Registration

• Choose the right type of entity according to your business model and goals.
• Prepare all documents properly to avoid rejection or resubmission.
• Consult a professional like a Chartered Accountant (CA) or Company Secretary (CS) for guidance.
• Ensure your office address is valid and proof documents are clear and up to date.
• Select a unique company name to avoid delays in name approval.

Conclusion

To get register a company in India is now a highly smooth and easily process which is largely based on digital process, thanks to government reforms and initiatives like the MCA21 portal. While the procedure involves several technicalities, careful planning, and expert guidance can ensure a smooth and successful registration.

A properly registered company not only uplift your business’s credibility but also opens the door to new opportunities, funding and business growth. With the right and well-planned approach, your entrepreneurial journey can soon become a legal reality.

If you’re ready to start your business journey, make sure to understand the procedures thoroughly or seek expert assistance to take the wise decision as per the requirement of your business which helps to simplify the process!

Frequently Asked Questions (FAQs)

1. How long does it take to register a company in India?

Generally, it took around 7 to 15 working days to complete the company registration process, provided all documents are correctly submitted and there are no objections from the Registrar of Companies (RoC).

2. Can a single person register a company?

Yes, a single individual can register a One Person Company (OPC) in India, which provides the benefits of limited liability while allowing sole ownership.

3. What is the requirement for minimum capital to start a company?

There is no minimum capital requirement prescribed Private Limited Companies under the Companies Act, 2013. You can start your company with any amount of capital.

4. Can NRIs or Foreign Nationals register a company in India?

Yes, NRIs and foreign nationals can register a Private Limited Company or LLP in India. However, at least one director must be a resident of India.

5. Is GST registration mandatory after company incorporation?

GST registration is mandatory only if your company’s annual turnover exceeds the limit of threshold or if you are involved in interstate supply of goods and services.