Company Registration

The most frequent sort of legal entity favored by millions of Indian entrepreneurs and popular startups is the private limited company. A private limited corporation may be formed online in less than 10 days for a very low cost.

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Company Registration Online in India

Choosing the correct business structure is as crucial as any other business-related task. The proper business structure will enable your company to run smoothly and fulfill its objectives. Every business in India is required to register as part of the legal requirements.

Establishing a private limited company, which provides its shareholders with limited liability while imposing some ownership limitations, is one of the most widely suggested options for beginning a business in India. The partners will handle it if it is an LLP. A private limited company registration, on the other hand, permits directors and stockholders to be independent entities.

Accubucks Solution, as your trusted legal counsel, provides a cost-effective solution for registering your company in India. We manage all legal processes and guarantee that the Ministry of Corporate Affairs (MCA) requirements are followed. We give you an Incorporation certificate (CoI), as well as PAN and TAN papers, upon successful completion of the Pvt Ltd business registration procedure. With them, you may quickly open a current bank account and begin your company activities.

Partnership Firm in India

What is Company Registration in India?

Company registration in India refers to the legal process of establishing a business entity that is recognized as a separate legal entity distinct from its owners or shareholders. In India, companies are primarily governed by the Companies Act, 2013, and the registration process is overseen by the Ministry of Corporate Affairs (MCA). There are different types of companies that a person can form. To establish your business, it needs to be registered with the MCA.

What types of business structures are available in India?

Let us attempt to comprehend the many forms of business structures offered in India. Here is a partial list of some of them:

OPC (One Person Company)

An OPC, which was launched in 2013, is the easiest approach to start a corporation if there is just one promoter or owner. It allows a solo proprietor to continue working while being part of the corporate framework.

LLP stands for (Limited Liability Partnership)

An LLP is a distinct legal entity in which partners' obligations are restricted to their agreed-upon contribution. An LLP is formed with the Registrar of Companies (ROC) under the Limited Liability Act of 2008.

PLC (Private Limited Company)

In the viewpoint of the law, a PLC is considered a different legal entity from its founders. It has shareholders (investors) and directors (corporate executives). Every individual is considered a corporation employee.

Public Limited Company

A Public Limited Company is a member-led voluntary organisation formed under company law. It has a separate legal existence, and its members' responsibility is restricted to the number of shares they own.

You can select the finest business structure for your needs and register your company accordingly.

Sole proprietorship, Hindu Undivided Family, and Partnership businesses are examples of other company formats. Please keep in mind that these arrangements are not subject to corporate law.

Why is it important to choose the proper business structure?

It is essential to carefully select your business structure since it will affect your income tax returns. When registering your firm, keep in mind that each business structure has distinct degrees of compliance that must be followed. A sole owner, for example, is simply required to file an income tax return. A firm, on the other hand, must file an income tax return as well as annual reports with the Registrar of Companies.

Every year, a company's books of accounts must be audited. Following these regulatory requirements necessitates the hiring of auditors, accountants, and tax filing specialists. As a result, while considering company formation, it is critical to adopt the appropriate corporate structure. An entrepreneur must be clear about the kind of legal compliances with which he or she is ready to deal.

While certain business forms are more appealing to investors than others, investors will always prefer a well-known and lawful business structure. An investor, for example, may be hesitant to provide money to a sole proprietor. Investors will feel more comfortable making an investment if a solid company idea is supported by a recognized legal framework (such as LLP, Company, etc.).

How can you choose a business structure when registering a company in India?

Let's look at some crucial questions that every entrepreneur should ask himself before deciding on a business structure:

How many owners/partners will be involved in your company?

A One individual Company is excellent if you are a single individual who owns the full initial investment necessary for the firm. If your company has two or more owners and is actively seeking investment from outside parties, a Limited Liability Partnership (LLP) or Private Limited Company is the ideal option.

Should your first investment determine your business structure?

If you want to spend less money at first, consider forming a Sole Proprietorship, HUF, or Partnership. However, if you are confident that you will be able to recoup your establishment and compliance fees, you might choose a business, LLP, or Private Limited Company.

Willingness to shoulder the full business's liabilities

The liability of business formations such as sole proprietorship, HUF, and partnership companies is infinite. This means that if a loan is defaulted on, the whole amount will be recovered from the members or partners in the profit-sharing ratio. In many circumstances, the risk to personal assets is substantial.

Companies and LLPs, on the other hand, have a limited liability provision. This implies that its members' responsibility is limited to the amount of their contribution or the value of the shares each member owns.

Income Tax Rates That Apply to Businesses

The income tax rates for a sole proprietorship and a HUF are the standard slab rates. In the case of a sole proprietorship, the business revenue is combined with the owner's other earnings. However, other entities such as partnership businesses and corporations are subject to a 30% tax rate.

Plans to raise funds from investors

As previously said, it is difficult to obtain capital if your business structure is unregistered. When it comes to investing, entities such as LLP and Private Limited Company are trusted. Make sure you pick the suitable structure and get the advice of an expert before registering.

How to Register a Company in India?

Registering a company in India is now a simple 4-step process:

Step 1: Digital Signature Certificate (DSC)

As the registration process of the company is completely online, Digital signatures are required to file the forms on the MCA portal. DSC is mandatory for all the proposed directors and the subscribers of the Memorandum of Association (MoA) and Articles of Association (AoA).

DSC can be obtained from government recognised certifying authorities. The list of such certified authorities can be accessed here. DSC can also be obtained online in just two days from here. Class 3 category of DSC must be obtained by the directors and subscribers of MoA and AoA.

Step 2: Director Identification Number (DIN)

The Director Identification Number (DIN) is an identification number for a director and it has to be obtained by anyone who wants to be a director in a company. The DIN of all the proposed directors of the company along with the name and the address proof are to be provided in the company registration form. DIN can be obtained while filing the SPICe+ form, i.e. company registration form.

SPICe+ is a web-based company registration form, through which DIN can be obtained for a maximum of three directors. If there are more directors in the company and they do not have a DIN, the company can be incorporated with three directors and it has to appoint new directors later on after incorporation. The appointed directors can obtain DIN by filing the DIR-3 form since only the proposed directors of an existing company can apply for DIN in the SPICe+ form.

Step 3: Registration on the MCA Portal

The SPICe+ form must be completed and uploaded on the MCA site to apply for company registration. To fill out the SPICe+ form and submit documentation, the company's director must first register on the MCA portal. After registering, the director will be able to log in and have access to MCA portal features such as filling e-forms and accessing public records.

In addition, the corporation must reserve its name by submitting two proposed names in Part-A of the SPICe+ form. The reservation of the name is required since the SPICe+ form will be refused if the business name is identical to the name of an existing/registered company, LLP, trademark, or contains phrases forbidden by the Companies (Incorporation Rules) 2014.

If the SPICe+ form is refused owing to non-approval of the company name, the applicant must re-file another SPICe+ form and pay the necessary cost to reserve a new name. However, once the name entered in Part-A of the SPICe+ form is approved, it will be reserved for a period of 20 days during which the firm must complete out Part-B of the SPICe+ form and submit it online. The applicant must fill out Part-B of the SPICe+ form with firm and director information, attach papers, attach DSC, verify the form, and submit it.

Step 4: Certificate of Incorporation

Once, the registration application is filled and submitted along with the required documents, the Registrar of Companies will examine the application. Upon verification of the application, he will issue the Certificate of Incorporation of the Company.

The Certificate of Incorporation is issued with PAN and TAN as allotted by the Income Tax Department. An electronic mail with a Certificate of Incorporation as an attachment along with PAN and TAN will also be sent to the applicant.

We have now covered the fundamentals of how to form a corporation.

Requirements for Creating a Company:

A certain set of requirements must be met before forming a corporation in India. These are some examples of such conditions:

Members and Directors:

A lawful Private Limited Company Registration in India requires at least two directors and no more than 200 members. According to the Companies Act of 2013, this is a legal necessity. The following requirements must be met by the Directors:

Each director must have a DIN issued by the MCA.
One of the directors must be an Indian resident, which implies they spent at least 182 days in the preceding calendar year.

The Company's Name:

When choosing a name for a private limited corporation, two criteria must be considered:

Private Limited Company
Name of the Principal activity

The registered office's address:

Following the conclusion of the company registration procedure, the firm should provide the company registrar with the permanent address of the business's registered office. The registered office is the principal location for conducting business and storing all company documents.

Obtaining Extra Documents:

Every firm must get a DSC to authenticate the validity of electronically transmitted papers. Furthermore, the company requires credentials from experts such as secretaries, chartered accountants, and cost accountants for various processes.

The Value of a Company Registration Certificate:

A Company Registration Certificate is an important document for several reasons:

Legal Proof of Identity and Existence: The certificate establishes the company's identity and legal existence. It comprises a one-of-a-kind Corporate Identification Number (CIN) issued by the Ministry of Corporate Affairs (MCA) that serves as the company's distinguishing identity.
Authorization to Begin Activities: The certificate shows that the business has successfully registered with the Registrar of Companies (RoC), allowing it to begin activities in line with the terms of the Memorandum of Association (MOA).
It allows the corporation to create a specific business bank account for financial activities.
The certificate authorizes the corporation to issue and distribute shares to investors or shareholders.
Business Loan: The certificate is required by lenders in order to receive a loan for a business.
Business Sale: When selling a firm to a third party, the certificate is required to ensure a seamless and legal transfer of ownership.

Documents Required for Company Registration Services:

Documents of the company's directors and shareholders/LLP partners :
- Proof of identification for all directors and shareholders (partners in the case of an LLP). Any one of the documents can be submitted as proof of identification: Pan card, Aadhar card, Driving license or Passport
- Proof of address for all directors and shareholders (partners in the case of an LLP). Address evidence can be shown by any of the following documents: Latest telephone bill (not older than 2 months), Latest electricity bill (not older than 2 months, Bank account statement having address
- DIN (DPIN in the case of an LLP) and DSC of all directors (partners in the case of an LLP).

Company/LLP documentation:
Proof of the company's registered office. The following papers must be supplied as verification of the company's address:
- Lease agreement between the landlord and the company/LLP
- Letter or NOC from the landlord granting authorization to use the office/premises as the registered office of the LLP/company.
- Company/LLP office premises sale document in the name of the company/LLP
The Memorandum of Association (MoA) outlines the purposes of the firm for which the company will be established as well as the liabilities of the company's members.
The Articles of Association (AoA) are the rules by which the firm will run.

Benefits of Company Registration in India:

A company registration brings several benefits. A licensed corporation adds authenticity and legitimacy to the business.

Protects against personal obligations and other dangers and losses.
Increases client attractiveness while also fostering goodwill.
Provides dependable investors with bank credits and remaining investment opportunities with simplicity.
Covers the duty of protecting the company's assets.
Greater dedication to prosperity and stability
Enhances the capacity to develop and grow huge

The Company's Name and Capital:

Choosing a Company Name:

The firm name should be submitted in the Form SPICe+ 32 application. In the Form SPICe+ 32 application, only one preferred name and the significance of preserving that name can be provided.

The kind of entity and one proposed name for the company must be submitted in order to reserve the firm's name. The suggested name should not be identical to the name of any existing business, LLP, or trademark. If the name is refused, another name can be offered by submitting a new Form SPICe+ 32 application and paying the applicable costs.

A company called "XYC (OPC) Private Limited" should be the name of an OPC. Similarly, a private corporation should be named "XYZ Pvt. Ltd." while a public firm should be named "XYZ Limited."

The company's capital:

There is no minimum paid-up capital required to establish a private limited company or a one-person firm. The public limited company, on the other hand, must have a minimum paid-up capital of Rs.5 lakh.

The paid-up capital of a corporation is the amount of money received from shareholders in return for company shares. It is formed when a firm sells its stock directly to investors in the market, typically through an Initial Public Offering (IPO).

Any company's authorized capital must be Rs.1 lakh. The approved capital is the maximum amount of share capital that the business is permitted to issue to its shareholders under its Memorandum of Association. The authorized capital must be specified in the Memorandum of Agreement.

Checklist of Company Registration:

The following are the minimum number of directors/partners:
- OPC requires at least one director.
- PLC requires a minimum of two directors.
- A minimum of three is required for a Public Limited Company.
- A minimum of two partners is required for an LLP.

A corporation must have at least the following number of members:
- OPC requires a minimum of one member.
- PLC requires a minimum of two members.
- A minimum of seven members are required for a Public Limited Company.

All designated directors/partners receive DSC.
DIN for all company directors/DPIN for all LLP-authorized partners.
Name of the firm/LLP that is not comparable to any other company, LLP, or trademark.
In the case of an OPC, PLC, or Private Limited Company, authorized capital.
In the case of an LLP, capital contribution by the partners.
In the case of an OPC, PLC, or Private Limited Company, the MoA and AoA.
In the case of LLP, the agreement between the partners.
Proof of the company's/LLP's registered office.

FAQs on Company Registration Services

Question: Where can I register my business?
Answer: If you want to start a new business in India, you must apply to the Ministry of Corporate Affairs (MCA). You can also apply remotely using the MCA site. A Digital Signature Certificate (DSC) and a Director Identity Number (DIN), among other things, are required for registration.

Question: How long does it take to register a business?

Answer: The MCA's latest modifications have made it simple to register any type of company with the government. If you have all of your documentation in order, it might take anywhere from 10 to 15 days to legally register your company.

Question: Is a person's physical presence required for business registration?

Answer: The entire procedure is conducted online, so you do not need to be present at any specific location to register. A scanned copy of the documents must be mailed in. The MCA delivers the firm incorporation certificate to the business address.

Question: Is an audit of a company's books required?

Answer: Yes. Every organization, whether private, public, or one person, is required to undertake statutory audits of its records. Every year, the firm's books must be audited by the company's auditor, and the audit report must be delivered to the Board before the company AGM.

Question: What are the requirements after a corporation is registered?

Answer: Once a corporation is registered, it must fulfill a number of obligations. These include things like filing taxes, producing yearly reports, keeping accurate financial records, and adhering to both employment and safety requirements.

Question: Can I form my own firm in India?

Answer: Yes, you may form a corporation in India on your own by following the procedures and criteria outlined by the Ministry of Corporate Affairs (MCA). However, the business registration procedure may be difficult and time-consuming, therefore seeking expert advice or consulting a Chartered Accountant is suggested to ensure proper and efficient registration. 'Speak with Our CA' today.