Gone are the days when you have to Visit government offices several times for registration of your new business.
now you can easily do this procedure online.
The Companies Act 2013 Now made the registration process online very easy.
Everything can be prepared and submitted online easily.
But do you know, what are the consequences of not registering a company in India?
You cannot file a suit legally, in any Civil Court against the third party for breaking a contract with you.
But at the same time, any third party can sue the company even if it is not registered
If there is no registration of the firm, any partner of the firm Cannot take legal action against another partner of the firm.
There is no relief to set of claims against the firm from the third parties if the value of the claim is more than rupees 100.
You will not get government benefits as other business structures have.
How to register business in India
In this post, we will see how to register your business in India.
this is a very important step you should follow, immediately after selecting your business idea.
in the post how to start a business in India, we have already gone through all important steps of starting a business in India.
A comprehensive guide of registering any kind of business in India.
In India, all companies operate under the Companies Act of 1956.
by using this act government of India regulates all dimensions of doing business in India.
The first thing you should think of to register a new business is the “business name”.
All companies in India are registered by the Indian government, registrar of Companies or ROC.
Follow below steps to find a suitable name for your business.
Don’t keep in mind only one or two names, instead make a list of potential names that are suitable for your business.
save your time in case other entities registered the same name as your thinking.
While selecting the name for business keep in mind that Name should reflect the object of the company clearly.
Your name such as a bank, capital insurance, needs regulatory compliance from SEBI, IRDA, RBI.
You may also want to avoid names that show a connection to government organizations.
The term state is used only in a government company, you cannot use for general purpose.
The name should not violet any trademark and you should check for the same.
The name cannot be changed within 3 years after the registry.
How to check name availability on the mca website.
Click here to open the MCA website.
Check Company name.
Check company name for trademark
Check the domain for your selected name.
After selecting the company name carefully, the next important step is actually incorporating the company.
that is your own business.
First thing is to decide the business structure of your company.
In India, there are various types of business structures with their technicalities and legal implications.
it is also very important to decide the type of your business structure.
You can choose from five business structure types that are mainly followed in India.
1. The first one is a sole proprietorship.
You must have heard about this type of business structure many times, as this is the easiest method of company formation in India.
the responsibility of business depends on one person, who forms sole proprietorship business.
and he has to manage everything related to it, this type of structure gives full control of the business.
This registration is very easy as there is no requirement for government registrations, no compliances to be fulfilled.
there is also no requirement of double taxation, and regulatory paperwork.
anything you earn from your business as profit belongs to only you, and you have to pay income tax returns only on this profit.
Registering a sole proprietorship business is also easy, you need adhar card, PAN card, registered office or business place, and bank account.
After preparing the above documents next procedure is easy, you only have to contact a charted account or any online site that can do this for you easily like this.
2.One person company
This business structure was introduced by the Indian government in 2013.
the main benefit of this type of business structure is availing certain tax benefits and also limiting liabilities simultaneous becoming the sole director of the company.
having a hundred percent control of everything.
before 2013 it is not possible to incorporate a company for a single person, he has to go for sole proprietorship business instead.
being an OPC company, it is easy to get loans from banks and it also has limited liability for directors.
This type of business also has less compliance then Private Limited business structure.
you get complete control of the company, it has legal recognition and it makes managing very easy.
For registration of the one-person company, required documents are:
Proof of registered office.
Memorandum of association.
Articles of association.
Affidavit of the director.
Consent of director.
A declaration that every compliance has been made.
To get one person company registration certificate
Obtain a digital signature certificate
Obtain director identification number
Apply for name approval
Make sure to file all forms with the Ministry of Corporate Affairs website.
You can get all the help and support from reputed online firms like myonlineCA click here to get your OPC company certificate with them.
As the name suggests this type of business has partners in the formation of a company.
To form this type of business structure, you need a partnership deed.
it is also an agreement between every partner of the firm and contains all the duties and obligations between each partner and also about Profit and it’s sharing.
The partnership deed is the main document and contains the name and address of all partners in the company.
It also contains:
Name and address of the partnership firm.
Date of starting firm.
Amount of capital invested by every partner.
Salaries to be paid to partners.
The profit-sharing ratio among all partners.
The rights partner will have.
Any other mutually agreed clauses.
If you decide to run your business as a partnership firm, you can contact HERE to register easily.
4.Limited liability(LLC) company.
This is a limited liability structure of a business.
In this structure, no one is liable for business debates.
LLC company members always have the safety of personal debates in case something wrong happens.
there is also flexible profit-sharing in the LLC company.
This type of company follows a definite business structure, in order to run the company successfully.
To register LLC, paperwork is much lesser as compared to other registrations it means that it is easy to form.
To form an LLC company, your first step should be to apply for DPIN (Designated Partner Identification Number) online.
after this, you should get your digital signature certificate and you should register it on the MCA portal.
Then you should get approval for your LLC company name by applying to the Ministry of Corporate Affairs.
The final thing you have to do is filling an online form of Incorporation to register your LLC and get the LLC agreement.
5.Private limited company
This type of business structure can have a minimum of two partners and a maximum of 200 members.
this is a Private Limited type business structure and there are no shares involved in it from the public.
paid-up capital is not required to form an Ltd company.
Benefits of LTD business
the percentage of tax is laser compared to other structures.
It is easier to raise money from the public by issuing debentures
One can easily transfer shares in the private limited company to another person
This is a type of business structure where the liability of companies owner is only limited to his shares.
To register a Private limited company you should obtain a director identification number(DIN) by providing your pan card, bank statement, Aadhar card, electricity bill.
After this choose your company name carefully and apply for the same.
After filing registration you should prepare drought MOA and AOA.
MOA is the object of the company and AOA is the rules and regulations of the company.
Finally, get Pan and tan Applications by applying through the MCA website by using the SPICE-E form.
Deciding the right company structure for your business.
It is very important to study all company structures that you can form to start your business.
To choose the best business structure for your business, keep in mind below mentioned things:
The risk involved in doing business.
While starting and running a business, the risk is always involved, if for some unfortunate reason your business collapse, then your personal assets can be in danger.
If you want to avoid such a situation you can opt for an LLC type business structure where your personal assets are safe.
Control You want in your business.
This is as simple as this if you want full control over your business you can opt for a business structure like sole proprietorship or OPC.
But if you are involved with one or more partners in your business, you have to go for other types of business structures.
You should also get familiar with the legal structure and cost of each business type.
There are different reporting needs for different structures of the business.
the sole proprietor is required very less reporting that one can manage it, for other business structures it can be a time-consuming job.
The complexity of business structures.
each type of business has its own complexities. some need very few Record-Keeping and others need detail records of there operating. And last but not least taxation requirement.
A business could utilize a corporate structure by which it can take advantage of the Corporate tax rate, and should go with C corporation or S Corporation structure for the same.
The sole proprietor business owner can report the profit and losses of his business directly in his personal tax returns.
Also one needs to understand various tax returns that you need to pay by operating under a selected business structure.
The detailed procedure for registering your company in India.
1. Apply online for the DIN (director identification number) with the Ministry of Corporate Affairs.
DIN is a unique number assigned by the Ministry of Corporate Affairs.
this number identifies the intended or Current director of a company in India.
you have to apply for this number before you can register your company.
Apply for the DIN online:
find the forms DIR-3 and DSC, located at the website of the Ministry of Corporate Affairs.
the documents you should keep ready are your qualifications certificates, current occupation, passport, proof of address and passport size photographs.
2.Apply online to register for DSC (digital signature certificate)
if you want to assess services or information on the internet, or if you want to sign documents digitally online you need DSC.
This is a digital equivalent for physical or paper certificates.
DSC can be presented to prove your identity
DSC can be registered online with the Ministry of Corporate Affairs website.
It is the requirement of the Ministry of Corporate Affairs that every company should have a DSC because it will help to file all applications online.
to get a DSC certificate, you need the same documents as you need while applying for DIN.
After completing the above two pre-registration steps, you are now ready for registration of the company online.
up to now you should have selected your company name/names and check the same.
obtained DIN and DSC certificate, it’s now time to file your registration application online with ROC.
1. In the first step, you need to complete e-FORM 1A.
This form is related to the name of your company.
While filling this form, list a minimum of four names and a maximum of six in order of preference you want.
After this file e-form 1A online with ROC for approval of company name.
The company name is approved by ROC on the basis of availability and appropriateness.
This is usually done in 2 days by ROC and The fee of rupees 500 charged for this form.
After the approval of your company name, you have six months to follow the next procedures and file online for the registration of your company.
2.Draft of the memorandum of association(MOA) and articles of association(AOA).
Your legal counsel or you yourself can draft these and it contains information on the company’s business objectives and operations.
Memorandum of association contains companies’ business objectives, whereas articles of association contain details of the company’s daily operations and Management.
These two documents should be signed by at least two members of the company in presence of at least one witness in their own handwriting.
3.File online MOA and AOA to vet by the roc.
After completing a draft of the above two documents you should file them online for vetting with the RoC.
4.Printing of MOA and AOA.
After the approval of your MOA and AOA by the ROC, it’s time to print these two documents so that you can notarize them.
5.Notarized MOA and AOA.
To notarized these documents you should submit to the proper stamping authority in your region to register your company.
after notarizing your copy, scan these documents to file them online along with other completed applications.
6. Pay filing and registration fees online
In this step, you will pay fees to the Ministry of Corporate Affairs website before filing the application for registration with roc.
this fee depends on your company’s capital assets.
7.Filing your application
To file your application for registration of the company, find the corresponding ROC office depending on the Indian state in which you want to start a business.
To find the ROC office you may visit the MCA website and select the one you need.
To register your company with the ROC online, with the Ministry of Corporate Affairs website you should have all the documents explained in the above steps to upload online.
Your complete application should consist of (in Duplicate):
stamped MOA, AOA.
copy of a letter from ROC for the availability of the company name.
copy of any agreements referred to in the articles.
E form number 1 required for the incorporation of the company.
receipts of payment that you made for registration and filing fees.
You will now file your application online with the website of the Ministry of Corporate Affairs.
The website gives a prompt for you to upload all application materials like DIN and DSC, MOA and AOA, receipts of payment for registration fees.
After the above procedure, you can collect the certificate of Incorporation.
ROC will vet application and after that will issue a certificate of Incorporation, if all the documents are ok and satisfactory.
in a case, if ROC find your documents not- satisfactory, you will be informed about the same
You can always refile your application by making necessary corrections and giving missing information correctly.
if you are wondering how to register a business in India, finally you can now register and do your business legally in India.