How to Register a Company in India?

If you aim to get your startup or a new business registered, then you must definitely be a little perplexed on the registration process of a company in India. The article tries to solve your queries through a brief discussion:

Types of Business:

In this age where not only big businesses like huge corporations, public and private limited companies thrive; startups are also withstanding the competition. Let’s try to understand the types of business structures that can be registered as a company:

• One Person Company: One person company is a new concept and is a type of business structure that was introduced in the Companies Act, 2013. Previously a company was deemed to be a private limited company only if it had more than one director. This system enables establishment of a company under a single proprietorship.
• Limited Liability Partnership: A limited liability partnership is one where the owners have limited personal liability for the financial obligations of the business. It is a company formed by two or more directors and is a form of business that allows the benefits of a limited liability for companies.
• Private Limited Company: A private limited company is a privately held small business entity. In this type of business, the liability of the owner/ owners, only remain confined to the share held by them and therefore this form of business offers limited liability.
• Public Limited Company: A public limited company is one whose shares are traded on the stock exchange like BSE and NSE and can be bought by the common investors. These companies are regulated using strict guidelines, mandated by law, to publish their financial position as the shareholders are the common investors.

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How to Register a Company in India?

The registration process of a company comprises of 4 main steps:

Digital Signature Certificate (DSC): A digital signature is a cryptographic process which is attached to electronically transmitted documents in order to protect them from alteration while in transit. A Digital signature is a way of safely submitting documents in the electronic format. The director of the company must obtain a digital signature. The digital signature certificates can be acquired from government agencies like MTNL, NIC, nCODE and the process is quick and takes 1-2 business days.

Director Identification Number (DIN): The director identification number is an 8-digit unique identification number provided to the director of a company. A person can have only one DIN even if he owns more than one company. DIN is valid for the entire lifetime of the proprietor and must be acquired within a stipulated time frame. If a company consists of many directors, each one of them must acquire a DIN. The DIN form-1 is used to apply for the DIN number. It is a code used to identify an individual and is associated with the role he plays in all the companies he owns.

Registration on the MCA Portal: Registration of a company can only be done through the MCA portal. The Ministry of Corporate Affairs or MCA is responsible for registering the new business ventures and provides online registration facility. The business entity must first register on the MCA portal and fill up the DIN form-1. The next step is the submission of the form and payment of fees.

Certificate of Incorporation: The certificate of incorporation is a license which must be obtained for the formation of a company. It is issued by the state government and serves as proof that the company is a government registered entity. A certificate of incorporation enlists the details of the company, the name of the directors, its structure and so on.

SEE ALSO: How To Get A Business Loan From A Bank?

Documents Required for Registering a Company:

For registering the company under the Companies Act 2013, the proprietor or partners must provide

• Identity proof: PAN card for Indian nationals and passport for foreign nationals.

• Proof of address:  Passport, DL, Voter ID Card, Aadhaar Card.
• Proof of residence: Bank statement, telecom bill, electricity bill.

Registered Office Proof:

• The registered document of the premises on which the office is located.
• NOC from owners of the office premises.
• Copy of lease or rental agreement for a rental property.
• Utility bills or gas bills from the business premises, in the name of the owner mentioned in the document.

Eligibility Criteria to Register a Company:

• A minimum of two promoters are required to start a private limited company.
• There is no lower limit on the minimum capital requirement. The capital requirement is based on the needs of the company.
• At least one director of the company must be a resident of India.
• The company must be registered under a unique name and must not incidentally or co-incidentally bear a similar name or trademark of any existing company.

SEE ALSO: Taking Business Loan from Private Banks

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