How to register a company in India introduction
Millions of Entrepreneurs and startups prefer setting up a private limited company in India. Private limited companies are highly recommended ways to enter in the business sector. This company registration process can be done completely online within some days. Private limited companies are governed by Section 2 (68) of the Companies Act 2013, the entrepreneur has to start from the Ministry of Corporate Affairs (MCA). If anyone is willing to register a company, the person has to record the company in Indian official records i.e. in MCA.
As everything is available online, registering a company can also be done on an online platform, so there is no need to visit the corporate office .Company registration can be done online while sitting at your home. Private limited company is a legally-recognized business entity that is privately held by private stakeholders. In order to start a company, it requires 2 Directors and 2 Shareholders. Go trough this entire article to know more about How to register a company in India.
Minimum Requirements for company registration
One need to include following things to register your company
- Directors: a company requires 2 directors with one must be the resident of India and an Indian national.
- Shareholders: company requires 2 shareholders, but directors can also be shareholders.
- Should have a registered office in India.
- Digital Signature Certificate(DSC).
- Director Identity Number(DIN).
- Filing an e-form
FDI or Foreign Direct Ownership is fully permitted in India and shareholders can also be foreign, private limited companies have no restriction on foreign shareholders. So this flexibility in private limited companies is the reason behind most of the foreign subsidiaries in India.
Objectives of Registering a Company
The main objectives of registering a company are mentioned below
- Briefing about the activities carried by the registering company.
- Highlighting the business activities that the registering company is going to cover in more generic terms.
- Related activities are also an objective of a registering company. Related activities help in the growing and diversifying of the business in near future.
- Another objective of registering a company is to include supporting activities. Supporting activities are very important for the main business activities.
List of documents required for company registration
Documents required for Indian Nationals
- Address proof (Passport, Election Card or Voter ID proof, Ration Card, Driving License, Electricity Bill, Telephone Bill, Aadhaar Card).
- Residential Proof (Bank Statement, Electricity, Telephone or Mobile Bill).
Documents required for Foreign Nationals
- Address proof (Driving License, Residence Card, Bank Statement, Government issued ID address).
- Residential Proof ( Bank Statement, Electricity, Telephone or Mobile Bill).
Requirements for Private Limited Company
A private limited company needs to meet specific requirements before the entity starts to operate. A company requires Directors, Digital Signature Certificate, Director Identification Number, Company name and much more.
Selecting Directors: A Business structure needs a board of directors, directors play an important role in building your business. Keep in view the following steps before selecting your dream team
- Inorder to move forward, the size of the board should be manageable.
- Experienced directors are very important for a company. So a company should find directors that can make the company financially secure.
- A great team management is the key behind every successful business. Directors with the same temperament can be very fruitful for a business. So one should always look for enthusiastic, skillful, or risk taking teams.
- Before selecting your directors, keep the compensation procedure in view.
- Keep in view the basic requirements during a meeting. Allowances like travelling, food, rooms and much more.
Digital Signature Certificate or DSC: The company’s directors, shareholders and other authorised signatories need to have Digital Signature Certificate or DSC. This Certificate is provided by an approved certification agency, Controller of Certification Agencies approve this agency. Only a valid DSC is needed for a Director Identification Number. DSC provides security and privacy for your online transactions and information exchange. DSC has many different benefits like Authentication, High Security, Cost and Time effective, Easy Verification and much more.
Director Identification Number or DIN: It’s an 8-digit unique identification number that is required for every director of the company. Central government of India provides this number to every director of the company and it has a lifetime validity. A director can get DIN by making an application through eForm Spices, address and identity proof need to be attached with the form.
Company Name: Before selecting a name for a company, a company owner must follow the company acts and rules. If the selected name of the company does not comply with company rules and acts, the application form will be rejected by the ROC.
In case the selected name will be rejected, the company has to file another application along with prescribed fees and a new name. ROC rejects the name of a company because of its resemblance or identical name with an already registered company. The rejection can also happen because of an undesirable opinion of the Central Government.
- Go for a simple catchy name, with easy pronunciation and remembering.
- Name that will represent your brand.
- Name clearing your business motive and clarify brand vision.
- Avoid using complex words, adjectives or abbreviations.
- Use MCA database to avoid identical brand names.
- Describe your name objective and brand vision while searching on MCA.
- Select a name that will later be applied with your trademark.
Company Registration Process
Name Approval: name approval process takes less than 5 days, normally MCA approves names that the company submits. Submit 1 or 2 names with business objectives, in case the names are rejected by the Ministry of Corporate Affairs, you can resubmit more names.
Digital Signature: only digital signatures of the directors are allowed by the Ministry of Corporate Affairs. Certification Authority in India issues Digital Signatures in India. Hence, it’s mandatory to have Digital Signatures of Directors.
For Digital Signature directors have to submit their identity proof and complete KYC process. In the case of foreign national, a foreign director needs to submit a passport and other documents.
Application Submission: application can be filed in Spices form with required attachments. MOA and AOA of the company need to be filed along with incorporation application. If the application is complete the MCA will accept it and it is granted with the PAN of the company. It will take less than 5 working days for MCA to accept the incorporation application.
Statutory compliance after registering a company
Requirements for Statutory compliance after registering a company are as under
Corporate Stationery: For company compliance matters the company has to purchase Corporate Stationery like Name Board, Company Seal, Letterhead, Share Certificates, and Statutory Register.
Company PAN: Applying for company PAN is the first requirement for Statutory compliance. Only after getting a PAN, can a company open a bank account, after using the PAN Income Tax Department can track all compliance and filings. It also helps in obtaining tax registration, file compliances and much more.
Company Bank opening: Opening of bank for the company is very important and main activity after registering a company. Opening a bank account for a company is a simple procedure and a bank account is the name of the company.
Appointment of Auditor: After registering a company, the Board of Directors of the Company is in charge to appoint the auditor within 30 days of incorporation.
Companies Amendment Act, 2015 clears that there is no requirement of Commencement of Business Certificate.
What should be kept in view before proposing names for a company?
There are some set of ROC rules and regulations in proposing names for a company.
What are the requirements that a company should keep in view before starting operating?
A company requires Directors, Digital Signature Certificate, Director Identification Number, Company name and much more
How can an Indian national and Foreign National get Digital Signature?
Digital Signature directors have to submit their identity proof and complete KYC process. In the case of foreign national, a foreign director needs to submit a passport and other documents.
How much time Application submission take?
It will take less than 5 working days for MCA to accept the incorporation application.
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