Establishing a formal company registration in India is the first step to a successful commercial career. The convenience of registering a corporation in India and legal compliance has both significantly increased over time. The Indian government has been working nonstop to make sure that the procedure is uniform and easy to use. Now, it’s simple for anybody to discover the precise intricacies of registering a corporation in India!
Registering a company in India has undergone a significant transformation, transitioning into a seamless online process. Recent updates to the system and standards might leave aspiring business owners feeling overwhelmed as they navigate the various stages of company registration. To alleviate any confusion, this blog will highlight and present a comprehensive, step-by-step tutorial on the intricacies of registering a business in India.
What Are the Different Business Structures in India?
Before beginning the company registration procedure, the first and most important thing a business owner should know is what category their firm operates under.
- Limited Liability Partnership (LLP)
Within the framework of a Limited Liability Partnership (LLP), the enterprise stands as a distinct legal entity. Nevertheless, the liabilities of partners are constrained, extending only to the extent of their individual contributions.
- Private Limited Company
A pivotal characteristic of a Private Limited Company (PLC) lies in its status as a separate legal entity in the eyes of the law. This signifies a clear demarcation between the company and its founders, directors, and stakeholders (i.e., shareholders). Each individual associated with the company is thus acknowledged as an employee. If your enterprise falls into this category, delve into the comprehensive guide on company registration outlined in the article below.
- One Person Company (OPC)
This was implemented by the government in 2013 to facilitate one-person launching a business. If your firm has only one promoter or owner, that individual may continue operating within the corporate structure as a single proprietor.
- Public Limited Company (PLC)
A Public Limited Company (PLC) is an enterprise that has extended shares of its stock to the public. The liability of the general public is restricted to the extent of the shares they possess. Consequently, in the event of business losses, the public is exempt from accountability beyond the value of their shares.
Importance of Choosing the Suitable Business Structures
The best business structure must be selected by the directors and the company owner.
Choosing the optimal business structure requires careful consideration from both directors and the company owner. The impact on the company’s and individuals’ finances can be significant, given that each business structure entails a unique set of compliance obligations. Hence, the selection process is crucial for financial well-being.
- 1. Audit: Opting for legal company registration initiates a thorough audit of the company’s financial records. Company stakeholders are obligated to engage auditors and remunerate various accountants to ensure adherence to regulations. Consequently, selecting an inappropriate business structure may lead to increased expenses, potentially diminishing the company’s income.
2. Income Tax: The firm, as well as its stakeholders, pay varying taxes on the money they make, as shown by the above-mentioned structures. A corporation must submit both its income tax return and its individual income tax with the registrar of companies, while a lone owner just has to file their individual income tax.
3. Business Expansion: Because various company kinds have regulations affecting business development, it is imperative that you choose the appropriate business structure. Certain businesses may draw in more investment because they are more investor-friendly than others.
How to Register a Company in India?
Streamlining the process of registering a corporation in India has made it more accessible than ever. Whether you’re seeking guidance on forming a private limited company or any other business structure, understanding the four fundamental components is essential. With the shift to online business registration, the procedure is now more efficient and user-friendly.
Which Documents are Necessary for Company Registration in India?
The government has introduced the Simplified Proforma for Incorporating a Company Electronically (SPICe), a unified application facilitating the fulfillment of business registration requirements. Through this platform, tasks such as registering a company name, allocating a DIN number to directors, business incorporation, and providing the new entity with a Tax Collection and Deduction Account Number (TAN) and Permanent Account Number (PAN) can be seamlessly completed. The documentation required for registering a business in India includes the following.
Documents Required for Company Registration from Shareholders and Directors
- A. Identity Proof Documents
- Driving License/Voter Identity Card/Passport/Aadhaar Card (at least one from the list)
- Permanent Account Number
- B. Address Proof Documents
- Copy of the Bank Passbook with Bank Statement or the latest transaction entry (not more than two months old)
- Water Bill / Electricity Bill
- Mobile Bill / Telephone Bill
C. Photographs, Passport size (3 each)
Important note: It is essential that all the aforementioned papers be self-attested by the relevant parties. It is recommended to provide the most recent documentation, including the telephone bill while ensuring that the power bill is no more than two months old.
Benefits of Company Registration in India
In India, registering a company has several benefits for businesses and business stakeholders. These benefits are crucial for the long-term success of the company and the owner, and they go beyond cash gains. Among the advantages that are mentioned are:
Separate Legal Entity: A registered business has its own legal existence and is considered a distinct legal entity from its directors and stockholders under the Companies Act of 2013. Since an incorporated business has its own assets, records, and legal actions, its debtors and creditors are its only source of liability for individual members.
Perpetual Succession: As the name implies, once a corporation is registered, its existence is unchangeable, regardless of changes to its directors, members, or shareholders. The incorporation will be active as long as the firm complies with the Companies Act.
Transferability of Shares: Shares of the firm may be readily transferred among various promoters and business partners, as well as the public, in the event of a publicly listed company after they have been registered. A private limited business has minimal limitations, yet shares cannot ever be completely prohibited.
Steps to Register a Private Limited Company in India
The process of registering a Private Limited Company in India involves the following steps:
- Apply for the Digital Signature Certificate by submitting the necessary application
- Apply for the DIN (Director Identification Number)
- Verify the availability of the name and submit an application.
- To register the private limited corporation, submit the EAOA and EMoa.
- Application for the company’s TAN and PAN
- Open an active bank account under the business’s name.
- Obtain the Certificate of Incorporation from the Registrar of Companies and TAN and PAN.
How to Register a Proprietorship Company in India
The proprietorship is the easiest type of business to set up in India compared to other types. In India, the person who wants to create a business company needs to have the following things ready– PAN card, Aadhar card, Registered Office Proof, and Bank Account.
- IEC Code (Import-Export) FSSAI/Trademark
- MSME Registration/Udyam/Udyog/SSI Registration.
- Shop Act License
- GST Registration (depends on the type of business)
- Open a current account at any bank under the company’s name.
Registration Process for a Start-up Company in India
You must do the following actions in order to register your new business in India.
- PAN Number
- Patent and trademark details (Optional)
- Get DPIIT Recognition
- Register Your Start-up with Start-up India
- Proof of concept in the form of a pitch deck, website link, or video (in case a start-up is in the validation, early traction, or scaling stage).
- Details of the Directors
- Get your startup’s registration/incorporation certificate.
Guide for Registering a Construction Company in India
- Registration of Private Limited Company by the Registrar of Companies
- Submission of incorporation application for registration of a Private Limited Company
- Open a bank account for a company
- Following documents are required for registration of a construction
- Objects of the Company should have Construction and Infrastructure Activities
- Decide the name of the company
The following documents are required for registration
- NOC from owner
- Rent agreement office address if office address is on rent
- Electricity bill office address
- Mobile no, email ID
- Photographs
- Bank Statement with current address
- PAN card, Aadhar card
Selecting the ideal office space is the next step after completing the business registration procedure! This is where NoBroker comes into play; you may pick from a variety of commercial properties offered by NoBroker, including stores, warehouses, plug-and-play offices, and completely equipped offices! To begin your search and save on brokerage, click the link below.
If you’re wondering how to establish a business in India, contact GFLO Consultancy. We can help you with the company formation process and have extensive knowledge of the country.
