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Business Registration
Business registration in India can be done in 4 simple steps –
1. Digital Signature Certificate
2. Director Identification Number
3. Registration on the MCA portal
4. Certificate of Incorporation.
Steps to do Business Registration in India
1. Digital Signature Certificate (DSC) – The registration process is completely online and hence digital signatures are needed to file the forms on the MCA portal. Digital Signature Certificate is mandatory for all proposed directors and members of the Memorandum of Association (MoA) and Articles of Association (AoA).
Digital Signature Certificate can be obtained from government-recognized certifying authorities. You can see the list of certifying authorities by clicking here. You can also obtain DSC in just two days. Click here to know. The directors and subscribers of MoA and AoA must obtain the Class 3 category of DSC.
2. Director Identification Number (DIN) - The Director Identification Number (DIN) is a unique identification number for a director and it is required by anyone who wants to be a director in a company. The DIN of all the proposed directors of the company along with the address proof and the name is to be provided in the company registration form. DIN can be obtained while filing the company registration form i.e., the SPICe+ form.
SPICe+ is a web-based company registration form. Through the SPICe+ form, DIN can be obtained but for a maximum of three directors only. If there are more than three directors and they do not have a Director Identification Number, they can be appointed as new directors after the incorporation of the company.
The appointed directors can obtain DIN by filing the DIR-3 form. The SPICe+ form can be used only by the proposed directors of an existing company to apply for the DIN.
3. Registration on the MCA portal
Firstly, the director of the company should register on the MCA portal. After the registration is done, the director will be able to log in and obtain access to the MCA portal services. This will include viewing public documents and filing e-forms. The director can now apply for company registration. For this, the SPICe+ form is to be filled out and submitted on the MCA portal.One of the important steps for company registration is also to reserve a company name by submitting two names in the Part-A of the SPICe+ form. Reserving the name is important because if the names suggested are similar to any of the existing/registered companies, trademark, LLP, or it has words that are prohibited under the Companies (Incorporation Rules) 2014, the SPICe+ form will get rejected.
In case the SPICe+ form gets rejected because of the non-approval of the company name; a new form has to be filled out along with a new name. There will be a prescribed fee for it. The approved name will be reserved for a period of 20 days within which the company needs to Part B of the SPICe+ form and submit the form online. The applicant needs to provide the details of the company and directors in the Part-B of the SPICe+ form, attach DSC, attach documents, check the form and submit it.
4. Certificate of Incorporation
After the registration application is duly filled and submitted with the required documents, it is examined by the Registrar of Companies. Once the verification of the application is done, the Certificate of Registration will be issued by him.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.
Here we complete the four steps involved in the registration of a business.
Different Types of Business Structures in India
Company type | Ideal for | Tax advantages | Legal compliances |
|---|---|---|---|
One Person Company | Sole owners looking to limit their liability | 1) Tax holiday for first 3 years under Startup India 2) Higher benefits on depreciation No tax on dividend distribution | 1) Business returns to be filed 2) Limited ROC compliance |
Limited Liability Partnership | 1) Service-oriented businesses or businesses 2) low investment needs | Benefit on depreciation | 1) Business tax returns to be filed 2) ROC returns to be filed |
Private Limited Company | Businesses that have a high turnover | 1) Tax holiday for first 3 years under Start-up India 2) Higher benefits on depreciation | 1) Business tax returns to be filed 2) ROC returns to be filed 3) An audit is mandatory |
Public Limited Company | Businesses with a high turnover | Tax exemptions under | 1) Business tax returns to be filed. 2) Mandatory Audits |
Documents required for Business Registration
The common documents that are to be submitted for registration of LLP (limited liability partnership), One Person Company, Private Limited, and Public Limited Company are as follows:
Documents of the Shareholders and Directors of the company/ Partners of the LLP
1. Proof of identification of all the company’s directors and shareholders (partners in case of LLP). Below is the list of documents that can be provided as proof of identification:
1. Pan card
2. Driving license
3. Aadhar card
4. Passport
2. Proof of address of all the directors and shareholders (partners in case of LLP). Any one of the below documents can be submitted as address proof:
1. Latest telephone bill (not older than 2 months)
2. Latest electricity bill (not older than 2 months)
3. Bank account statement having current address
3. DIN (DPIN in case of LLP) and DSC of all the directors (partners in case of LLP)
Documents of the Company/LLP
Proof of registered office of the company. The below documents must be submitted as address proof of the company:1. Tenancy/rental agreement between the landlord and company/LLP
2. Letter or NOC from the landlord of his/her permission to use the office/premises as the LLP’s/company’s registered office.
3. Sale deed of the company/LLP office premises in the name of the company/LLP
4. The Memorandum of Association (MoA) contains the objects of the company for which the company is going to be incorporated and the liability of the members of the company.
5. The Articles of the Association (AoA) lays down the by-laws on which the company will operate.