In India, it is integral for every business to be compliant with the government’s rules and regulations. One such rule is registering the business as a part of legal compliance. Thankfully, over the years, registering a company has become more accessible, shifting online. Thanks to the government’s efforts, a unified and seamless process for registering a company in India exists. However, due to the dynamic nature of rules and compliances, it can be challenging for business owners to know the required steps to register a company. In this blog post, we at The StartupLabs are here to highlight the steps necessary to register your company with ease. 

Types of Business Structures In India

It is vital to understand your company’s business structure and in which category it falls before heading for its registration. Let’s explore the different business structures in India.

Private Limited Company 

A PLC’s defining trait is that it is a private, separate legal entity for the law; this relates to the fact that the company’s legal entity differs from its founders, stakeholders, and directors. In a PLC, every individual is considered an employee of the company, and the shareholders can invest in it to become part owners. PLCs are registered under the Companies Act,2013,  with the Registrar of Companies. 

Proprietorship Firm

This is a business structure that can be established by only a single person. One person runs the business, and it is suited for small businesses with low investments. The proprietorship firm allows for all the control of the business to be on the sole proprietor, who enjoys all the profits but also bears all the losses. 

Public Limited Company

A public limited company is a type of business offering shares of its stock to the public. It is established by seven or more members under the Companies Act 2013. When a company goes public, it can raise capital from the public, but the general public’s liability is limited to the number of shares they hold. Due to this, in case of loss suffered by the business, the public cannot be held responsible, and the directors are responsible for the affairs of the company. 

Partnership Firm

A partnership firm can be formed when two or more people enter into a partnership. The partners of this firm share equally all the profits gained by the business and bear the losses equally. The partnership firm is regulated under the Partnership Act of 1932. It is an ideal business structure for two persons with strong business ideas. 

Limited Liability Partnership (LLP)

In a Limited Liability Partnership firm, partners’ liabilities are limited to their agreed-upon contribution. This is a separate legal entity established under the Limited Liability Act, 2008. It is ideal for businesses that want to be deemed liable for a limited amount. 

Why Is It Important To Choose The Right Business Structures?

Choosing your company’s business structure carefully is vital as your Income Tax Returns depend on it. Each business has a different level of compliance that needs to be met, and failure to do so may cause losses. Let’s discuss why choosing suitable business structures is essential when registering a company. 

Income Tax

Tax is a matter that needs to be shown respect and taken seriously. It is one of the main reasons why it is essential to identify your business structure correctly. Learning your business structure is vital because different structures have different tax demands. For example, a sole proprietor has only to file individual income tax, but a company business structure has to file income tax with the ROC.

Auditing

An accurate business audit is required to register a company. This requires a thorough audit of the business’s accounts and ledger. Professional auditors and accountants are hired to ensure this process’s authenticity. Choosing the right business structure is vital for conducting accurate auditing.

Business Expansion

It is essential to choose the proper business structure for your company to have real opportunities for growth and expansion. Some business structures are more alluring to investors than others; if your company has a recognized legal structure, an investor might be inclined to invest. 

Documents Required To Register A Company 

There are a few essential documents that are required at several steps of the company registration procedure for all business structures.

Here is a list of them:

Documents of Directors of A Company

In the company registration, general documents of directors (Existing or Intended) of a company are required. 

Proof Of Identification

You may use the following as proof of identification.

• PAN
• Driving License
• Aadhar Card
• Passport

Proof Of Address

A proof of address is also essential, you may use the following documents:

• Recent Telephone Bill
• Recent Electricity Bill
• Recent Bank Account Statement with address mentioned
• DIN
• DSC

Documents of The Company

In the company registration process, documents relating to the company are also required. 

They are as follows:

Residential Proof

For company registration, the director is required to submit an address with residence proof. This would aid in validating their current address. The residential proof must have the same address as the one on the PAN.

Memorandum of Association

MOA is a legal document that serves as the cornerstone upon which the company was built. It’s an important document for business registration as it explains why the company was founded, its authority, and the terms under which it functions. It includes details about the company’s name, objectives, registered office address, and liabilities of its members.

Articles Of Association

AOA can be referred to as the “Rule Book” of a company, as it contains the specific rules and regulations agreed upon by the directors and shareholders of the company. It is an essential document for registration, including company name, purpose, share capital, legal organizations, and shareholder meetings.   

Proof Of Registered Office Address

An important requirement for firm registration is a valid proof of registered office addresses. Valid proof could be lease deeds, rental agreements, or any type of utility bill that confirms the address. It needs to be accessible at a physical address, as this is where all the official correspondence and notices are sent. 

All of these documents are essential for a seamless and hassle-free company registration process. 

How to Register a Company in India?

Today, there are four steps to be followed to register a company. 

Let’s go through each step one by one:

Step 1: Digital Signature Certificate (DSC)

As the business registration process is online, you will require digital signatures (DSC) to file various forms on the MCA portal. These signatures are compulsory for all the directors and members of the company’s Articles of Association (AoA) and Memorandum of Association (MoA). 

Step 2: Director Identification Number

The Director Identification Number (DIN) is a unique eight-digit identification number for anyone who wants to be a director in a company. DIN is important for registering a company, and the DIN of the directors, along with their names and address proof, is required in the company registration form. DIN can be obtained when a company fills out the SPICe+ form for up to three directors. 

Step 3: Registration On The MCA Portal 

The third step is registration on the MCA portal. To do so, the SPICEe+ form must be filled out properly, and all the required documents must be submitted to register a company. The process is seamless if all the prerequisites are taken care of and the existing director has registered on the MCA portal. Doing so, will allow the director to gain access to the MCA portal services which allows him or her to view public documents and fill the e-forms. 

Step 4: Certificate of Incorporation

The fourth and final step in registering a company is getting the certificate of incorporation. Once the previous steps are carried out, the registration form is filled out, and all required documents are submitted, the Registrar of Companies will examine your application and review all documents. Once verified and successful, the ROC will issue a certificate of incorporation to your company. 

Conclusion

If you want to register a company in India, you have to be involved in a lot of processes. Aside from the four main steps, the company must also follow the prerequisite steps of identifying its correct business structure. After the director or the employees intending to be the directors are finalized, the company needs to obtain important details such as DIN and DSC to go forward with company registration on the MCA portal. Only after the form is filed and documents are submitted does the ROC review the details, issue the COI, and bring the company into existence as a legal entity.  

At The StartupLabs, we take care of all compliance-related challenges you may face; our team of experienced professionals provides hassle-free compliance aid to our clients. So don’t wait to get rid of your compliance-related headache, and contact us to take care of it so you can put your mind to where it should be for your company’s growth. 

FAQ on Register a Company in India

Q. What portal should I use to register a company?

Ans. If you want to register a new company, you should use the Ministry of Corporate Affairs portal. 

Q. How many days does it take to register a company?

Ans. If you have followed all instructions and have all the documents, a company can be registered anywhere between ten to fifteen days. 

Q. What does registering a company do?

Ans. Registering a company gives it an existence as a legal entity. 

Q.  Can a foreign individual be a director of a company in India?

Ans. Yes, a foreign national can be a director of a company as per Indian law. Given that all the criteria are fulfilled in the Act, he or she must be allotted a DIN. 

Q. Is it necessary to be physically present for any step of the company registration process?

Ans. No, as the process is entirely online, there is no need to present at a location for any step of the company registration process. 

Q. Can I check the progress of company registration?

Ans. If you want to check whether your company is registered, you can check its status on the MCA website. 

Q. How does choosing a business structure help a company?

Ans. Choosing the correct business structure is helpful and downright necessary for companies to file taxes correctly, have proper auditions, and have worthwhile business expansion.

Q. What is a DIN?

Ans. DIN, short for Director Identification Number, is a unique eight-digit number allotted to a company director during company registration.