New Company Registration In India.
Why New Company Registration In India
Before launching any business, it is necessary to understand the process of company registration in Patna. Before establishing any business, you must first register it as a corporation with the appropriate authorities. A private limited company or a public limited company are both options for forming a corporation. If you wish to form a small business, a private limited company will suit your requirements. You will need first to determine how many directors you want to have in your business. If you want to run a company yourself, you can establish a one-person corporation in India, which is a good option.
The entire procedure of forming a corporation is completed online. You can register a company online by going to the Ministry of Corporate Affairs’ registration portal, operated by the Government of India. However, there are a few things you should be aware of before forming a corporation. If you are applying for a position with a company online, you will need to be quite cautious about meeting their standards. There are several different types of corporations that can be formed to meet your needs.
Benefits of Registering Your Business
- Legal entity– A registered company has it’s on rights, bears it’s own liability, as well as legal proceedings. A company can own property and sustain debts.
- Perpetual Succession – A company’s existence is not affected by an individual’s death. A company can last forever, until and unless it is dissolved legally. Otherwise the change in shareholders, members and workers doesn’t affects it’s existence.
- Equity Raising – Company is the only legal entity which is capable and help raise equity funding from investors, stock exchange and private equity firms.
- Dual Relationship–As the company can sign and agreement or contract with any individual, this an employee can also sign up as a shareholder, and still be an employee. Therefore, an employee can also be a shareholder, creditor, director and employee at the same time.
There are many other advantages for new company registration process in India, like the free and easy transfer of shares, and the ability to sue.
New Company Registration Process in India step-by-step.
Step 1: Deciding your Business Structure
Deciding your business structure is one of the most important and foundational steps for the registration of a company in India, and anywhere in the world as well.This decision defines the path of your company for its entire lifetime. So, it is extremely fundamental to decide the right structure according to your firm’s wants and needs. There are several types of business structures in India, and thus it can be a little confusing to make the best choice. Therefore, let’s take a brief look at all the business structures to help you choose the right one for your business.
The most common business structures in India are Limited liability partnerships, one person company, private limited company and public limited company. Except one person company which only requires one shareholder, the rest all require minimum of 2 shareholders.
Limited liability partnerships business structure is suitable for the businesses that needs low investment and business offering services. Such structure gets tax advantages only in terms of depreciation benefits.
One person company structure is best for the solo/individual owners who have the intention of restricting their liabilities. Start ups gets the benefit of exemption of tax for the first 3 years of operation.
Private limited company business structure is best for the businesses with high turnovers. Tax advantages here include tax holiday in the first year of operation in accordance with Start-up India higher benefits.
Public limited company business structure is most suitable for the high-risk, high-reward based high turnover businesses. This business structure had the lowest and reduced tax advantages as compared to the others.
There are other kinds of business structures as well in India, but they work outside the jurisdiction of the companies law and thus, doesn’t require a mandatory registration.
Choosing the right business structure can one of the important factors for the success of your business and thus you should do the necessary research before deciding on the structure.
Step 2: Obtaining a Digital Signature Certificate
To obtain a digital certificate, let’s first understand what is a digital signature. In simple speeds, it is the means to confirm the authenticity of a document. Most of the times the digital signature is the exact copy of the physical signature, but sometimes that’s not the case, and it could also be a stamp which verifies the said originality and thus, provides security against impersonation. Therefore, the digital signature certificate or DSC is simply the digital equivalent of the physical certificates. It is used to identify and verify the person to either sign some documents digitally or get services on the web.
Now comes the question of how can one obtain this Digital Signature Certificate? To make matters simple, the Ministry of Corporate Affairs has advised DSC Certifying Authorities (CAs), and you can obtain a DSC from there. This process will take 3-7 business days.
Step 3: File for Name Approval
One of the first things a person decides about their business is to name it. Choosing a name for the business is a crucial step as along with the business needs the name must also cater to the intellectual property laws in force. A clash in names might stall the smooth functioning of registration. In order to prevent this from happening the name must be searched online on the Ministry of Corporate Affairs (MCA) portal.
Now to file for name approval , the Reserve Unique Name (RUN) e-form is used and the proposed name can be reserved for a fees of Rs. 1000/-.. The SPICe (Simplified Performa for Incorporating Company Digitally) . form further helps with the process of name reservation and incorporation of a company. However in case of an LLP, the name approval must be done through the RUN-LLP Form.
Step 4: Obtaining Director Identification Number (DIN)
The Central Government issues the DIN which is a unique number generated for directors or persons with intent to be directors for an existing or a new company.
The various types of DIN forms are:
i) DIR-3 Form: This is issued to the director of an already existing company.
ii) SPICe Form: This is issued to the person intending to be director of a new company.
iii) DIR-6 Form: This form is used to notify any changes in the existing directors of a company.
Step 5: Filing for Incorporation
The MCA has dedicated forms available for incorporation of companies. The SPICe form or Form INC-32 introduced by MCA assists incorporation with one application for name reservation, incorporation of new company as well as allotment of DIN.
It streamlines the procedures for:
i) Obtaining DIN
ii) Name Reservation
iv) Pan Application
v) TAN Number
In case of an LLP, the FiLLiP e-form has to be filled provided by the MCA.
Step 6: Filing Memorandum of Association (MoA) and Articles of Association (AoA) Online
The MoA and AoA provide legal certitude to the company formation.
Along with defining the legal extent of powers of the company, these documents provide various information about its activities and its relationship with the shareholders. The e-forms INC-33 for e-MoA and INC-34 e-AoA are provided by the MCA for smooth incorporation of the company.
Step 7: Application for PAN and TAN
The applicant must apply for a PAN and TAN number after completing all the previous documents.
Step 8: Certificate of Incorporation
After the successful review of application by MCA and ROC certificate of incorporation would be granted to the applicant. The certificate of incorporation is a legal document which provides some form of legal status to the company.
Generally, online company registration in India takes around 14 business days or around 2 weeks to get fully incorporated.
Documents Required New Company Registration In India
To get the company registered in India, the company should have a registered office.
The documents that are required for new company registration in India are:
i) Government issued ID proof such as Aadhaar Card or Voter identity card of directors.
ii) Copy of PAN Card or Passport of directors (Foreign Nationals &NRIs).
iii) 2 Passport size photographs of directors of the company.
iv) A copy of address proof rent agreement or property papers
v) Electricity or Water bill of company place
vi ) Landlord NOC in case of rented office
vii) If the property is a personal property then a copy of sale deed or property deed.
viii) A notarized copy of the passport (for foreign nationals) must be submitted mandatorily.
ix) Registered Office Proof
The residence proof documents like a bank statement or electricity bill must be less than two months old and it is necessary to have a company registration.
Company Registration for New Start Up
Since the Start up India program was launched, there has been seen an increase in the number of start up companies. Earlier start up companies didn’t have government to back them up and without this, the process was very hectic and thus not many people indulged into it. But now, as the government has started a whole program, people are starting to build their own start-ups as start up businesses have huge advantages over other business structures.
The major advantage of start up business is that it improves the employment in the country. This was one of the main reasons why government launched the start up program. As there is possibility of job opportunities, the government started to help these companies grow in the Indian market for the economy’s advantage.
But you have to keep in mind that not all the business or everyone can register for a start-up business. There is an eligibility criteria. Now let’s look at this criteria.
Eligibility Criteria For Start Up Company Registration In India
- The first criteria is for the company to have either a private limited or a limited liability partnership business structure.
- Your company can not a remain a start up forever and keep enjoying the advantages. A company remains a start-up for only the first 10 years since the date of registration. Earlier the number was 7 years but government changed this to give the companies the benefit of tax exemption for a little longer.
- The company stops being a start up if the turnover per year crosses the mark of Rs100 crore in any of the 10 years. If it doesn’t, then it still passes as a start up, but once it does, it no longer remains eligible to be called a start-up. This mark of Rs 100 crore has also been changed by the government from Rs 25 crore to again give the benefit to start ups.
- Your firm/company must have an approval from the Department of Industrial Policy and Promotion (DIPP).
- The start up should be funded by either of mentioned funds : Incubation fund, Angel Fund, or a Private Equity fund.
- Patron guarantee is a must from the office of Indian Patent and Trademark.
- Recommended letter is also a must be an incubation.
- Every single detail concerning the funding of the firm must be registered with SEBI (Securities and Exchange Board of India)
- The company/start-up should come up with innovative ideas and schemes for their business.
Procedure For Registration of Start Up Company In India
Step 1: First and the foremost step is to incorporate the business as either a private limited company, limited liability partnership, or a partnership firm.
Step 2: Now you need to register your firm under Startup India scheme by the government. All that you need to do is fill up the available form on the startup india website and upload all the documents needed.
Step 3: In this step, you need to mention if you need the tax exemption. As explained above, in India, start-ups need not pay the income tax for the first 10 years. But to avail these benefits, the start-up had to be certified under Inter-Ministerial Board.
Step 4 : Here the self certification is needed of the following conditions: are you a private limited company or LLP or a partnership firm? Is your business registered in India? Is your company’s yearly turnover less than Rs. 100 crore? And the other conditions that were included above in the eligibility criteria.
Step 5: Last step is to get your recognition number with immediate effect. This number will be available on the application of the registration.
You now have a complete guide, step-by-step to start your business and registering it. Remember, the most important step in the whole process is to choose your business structure wisely. For More Details Pls Contact us