In India, registering a business is most often referred to as incorporation or founding of a business. Your business becomes a distinct entity and has legal status when you register it. The Ministry of Corporate Affairs is responsible for the business registration procedure in India. There are already close to 7 lakh registered firms in India, and new applications are being submitted daily, according to data. This post provides a step-by-step breakdown of the business registration procedure in India so that you are fully aware of the registration process.
Select your company structure
For your company structure, you have a lot of choices. The most typical ones consist of
- Sole proprietorship – The default business structure for one person in business is a sole proprietorship (personal and business assets and liabilities are not segregated).
- Partnership – When there are two or more co-founders, a partnership is formed (various types of partnerships exist, like Limited Liability Partnerships and Limited Partnerships).
- C corporations – These entities provide the firm with its legal identity for tax and liability purposes by separating the assets and revenue of the owners and shareholders from the business.
- Limited liability company – Prevents commercial obligations from affecting an owner's assets.
- Request a director ID number (DIN)
Getting the unique identification number is the first stage in the business registration procedure in India. The Companies Amendment Act of 2006 mandates that all directors of a business, both current and prospective, get their Director Identification Number (DIN). The Companies Act section 153 authorizes the issuance of the 8-digit, distinctive DIN number. DIN requires a full name, father's name, DOB, identification proof, address and evidence, a copy of the PAN card, and two pictures of each prospective director.
Request a certificate of digital signature (DSC)
Only by receiving a legitimate digital signature on all of the papers submitted in the e-filing procedure can the legitimacy of the documents and information supplied in the DIN-1 Form be guaranteed. Every firm must get a Digital Signature Certificate (DSC) as part of the company registration procedure in India to provide a safe method of submitting documents online. The prospective directors' complete name, father's name, DOB, address with evidence, a copy of their PAN card, proof of identification, and a picture are requirements for applying for a digital signature. Businesses should only get DSC from entities that have been authorized by the Controller of Certification Agencies, nevertheless (CCA).
Making new user registration request
Registration on the MCA site is crucial. To submit an eForm, perform other activities, and pay the required fees, you must first establish a user account. Registration with the Ministry of Corporate Affairs is free.
Requesting charter papers
The creation of charter papers such as the Memorandum of Association (MOA) and Articles of Association
is a requirement throughout the business registration procedure (AOA).
Request for a company name
The suggested business name should be original and describe the goods and services the firm provides. It enables them to distinguish themselves from their competitors in the same sector. Recently, the Ministry of Corporate Affairs (MCA) launched an online tool called RUN
(Reserve Unique Name) for the incorporation of businesses.
Enter additional information
The next step in India's company registration process is the filing of the notice for the appointment of directors, secretaries, and managers. To incorporate the business name on the MCA website, form-1 must be meticulously filled out and filed. You must provide at least four different names for your business. Additionally, the proposed business name must adhere to all the rules of the Companies Act of 1950. Then, you must choose one of them before completing Forms -18 and 32, which are used to provide the location of the business and the names of the directors, secretary, and manager, respectively.
Getting your company's PAN (Permanent Account Number) is the last stage in the registration procedure for companies in India. To get a PAN, only authorized agencies recognized by the Union Trust of India (UTI) Investors Services Ltd. or the National Securities Depository Ltd. (NSDL) are allowed. You must obtain your business's TAN (Tax Account Number) and a PAN. You may get it from any Assessing Officer at your state's Income Tax Department.
So, this is a rundown of what must be done to get started since doing it correctly the first time may save many of your problems later.