How to Register a Company in India: Checklist 2024
How to Register a Company in India: Checklist 2024
Registering a company in India in 2024 involves understanding essential legal requirements set by the Companies Act of 2013 and deciding on the proper business structure for your needs, such as an LLP, OPC, or PLC. Each type has its own set of rules, tax benefits, and compliances to follow. This guide breaks down the process into simple steps, from getting a digital signature and choosing a company name to submitting essential documents like the MOA and AOA. It’s designed to help you navigate the registration process smoothly, ensuring you have all the required documents ready and understand what’s needed after registration to get your business up and running successfully.
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Legal Basis for Register Company in India
The Companies Act of 2013, along with its amendments, sets the legal groundwork for registering companies. This Act oversees the entire process from initial registration to governance after registration and even the dissolution of companies. Section 3 of the Act emphasizes that company registration is compulsory for maintaining legal compliance, market transparency, and accountability.
Different Business Structures in India
Understanding the type of business structure suitable for your venture is a fundamental step before register company in india. Here’s a brief overview of various business entities in India:
Limited Liability Partnership (LLP)
An LLP operates as an independent legal entity where the partners’ liabilities are confined to their investment in the business. This structure blends the benefits of a partnership’s flexibility with the limited liability features of a corporation.
Private Limited Company (PLC)
A PLC is recognized as a distinct legal entity, separating its identity from its founders, directors, and shareholders. In this setup, all involved parties are considered company employees, providing a structured governance framework for businesses that fit this category.
One-Person Company (OPC)
Introduced to simplify the process for individual entrepreneurs, an OPC allows a single promoter to operate a corporate entity while enjoying the benefits of limited liability and less stringent compliance requirements.
Public Limited Company (PLC)
A PLC, characterized by its ability to offer shares to the general public, operates with limited liability, meaning the shareholders’ financial responsibility is limited to the value of their shares. This structure is suited for businesses looking to expand their capital through public investment without imposing excess liability on the shareholders.
Here’s a tabular format summarizing the ideal structure for different types of companies, along with their legal compliance requirements and tax advantages:
| Structure of the Company | Ideal Structure for | Legal Compliances | Tax Advantages |
| Limited Liability Partnership (LLP) | Businesses are prioritizing services or with minimal investment needs. | Filing of business prioritizes urns. | Benes on depreciation. |
| One Person Company (OPC) | Individual proprietors are looking to reduce legal liability. | Filing of business returns with limited ROC compliance. | As per Startup India, tax exemption for the first three years, increased depreciation benefits, and no dividend distribution tax. |
| Private limited Company (PLC) | Businesses with higher revenue expectations. | Mandatory filing of business tax returns, ROC returns, and audits. | There will be a tax holiday for the first three years under Startup India, as there are enhanced depreciation benefits under Startup India. |
| Public Limited | Businesses generating substantial revenue. | Mandatory filing of business tax returns and audits. | Tax exemptions. |
Checklist for Company Registration
Registering a company under the Companies Act requires careful compliance with certain foundational requirements. Below is a detailed look at the critical specifics to keep in mind during the registration process:
Shareholders
To set up a private limited company, at least two shareholders are needed, whereas a public limited company requires a minimum of seven. Just one shareholder is sufficient for an individual personal company (OPC).
Shareholder Eligibility
Shareholders can be individuals or other companies, and there are no restrictions on their nationality or residency for private or public limited companies. However, the sole shareholder of an OPC must be an Indian citizen.
Share Subscription
Each shareholder must agree to buy a specified number of shares, marking their financial stake in the company, to commit to the company’s Memorandum of Association (MoA).
Directors
Directors play a pivotal role in a company’s governance and legal establishment. The requirements for directors vary based on the type of company being registered:
- Private Limited Company: Requires at least two directors to be appointed.
- Public Limited Company: A minimum of three directors is necessary.
- One-Person Company (OPC): Can be established with just one director.
Directors must be at least 18 years old, with no specific conditions on their residency or nationality. However, every director must secure a Director Identification Number (DIN) issued by the Ministry of Corporate Affairs (MCA), which serves as a unique identifier. Additionally, at least one director in the company must meet the residency requirement, having stayed in India for at least 182 days in the preceding calendar year, ensuring a local presence in the company’s management.
Company Name
Choosing the right name for your company is a critical step in the registration process, governed by specific guidelines under the Companies Act. The chosen name must be distinct and not resemble existing company names or trademarks, ensuring it stands out and avoids disputes.
- Additionally, it should not infringe upon the Emblems and Names (Prevention of Improper Use) Act, 1950, safeguarding against the misuse of national symbols and emblems.
- The name should aptly represent the nature of the business, clearly indicating what the company does.
- Depending on the company’s registered type, the name should conclude with “Private Limited” or “Limited” for public companies, signifying the company’s legal structure.
Also read, MCA Restricted Words for Company Names in India
Registered Office
Every company must designate a registered office within India to facilitate its incorporation. Initially, if a permanent location isn’t available, the company may use a temporary postal address for the incorporation process, stipulating that a permanent address must be declared within 30 days post-incorporation. This registered office is central to all formal communications and legal notices.
This office must be equipped to receive and acknowledge such communications effectively. Moreover, it’s the primary location where the company’s official records and accounts are kept, necessitating the premises being secure and lockable. During the registration process, the company must submit proof negotiation’s location, typically in the form of a recent utility bill issued in its name, to validate its occupancy and operational readiness.
Capital Requirement
The Companies Act does not impose a specific minimum capital requirement for companies. However, shareholders must define several capital-related aspects before proceeding with company registration. This includes setting the authorized capital, the maximum capital the company can raise through share issuance.
Additionally, shareholders need to determine the subscribed share capital, which reflects the actual capital they invested by purchasing company shares they deposit. The paid-up capital, representing the capital deposited by shareholders, must be arranged. These steps ensure the company has a solid financial foundation to support its business activities immediately.
Documents Required for Company Registration
To streamline the company registration process in India, the government offers the SPICe (Simplified Proforma for Incorporating a Company Electronically) facility, a comprehensive platform for fulfilling the legal requirements for company incorporation. This system facilitates tasks like registering the company name, assigning Director Identification Numbers (DIN) for directors, and issuing the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) for the newly established company. The following is a list of essential documents that need to be provided by shareholders and directors during the registration process:
Required Documents from Shareholders and Directors:
- Proof of Identity:
- Permanent Account Number (PAN) Card
- Additional options include an Aadhaar Card, Passport, Driving License, or Voter Identity Card (submit at least one).
- Proof of Address:
- Recent Telephone or Mobile Bill
- Recent Electricity or Water Bill
- Latest entry in the Bank Passbook or a Bank Statement (should be within the past 2 months)
- Passport-Sized Photographs: Each stakeholder must provide 3 photographs.
Note: All documents must be self-attested by the individuals submitting them. Ensure that the documents, especially utility bills like telephone or electricity, are current and not older than 2 months to ensure validity and compliance with regulatory requirements.
Procedure for Company Registration in India
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- Purpose: A DSC is essential for electronically signing documents submitted to the Ministry of Corporate Affairs (MCA).
- Process: Apply for a DSC through authorized DSC issuing authorities listed under the Controller of Certification Agencies (CCA).
- Indian Nationals must have passport-sized photographs, a PAN card, an Aadhaar Card for address verification, a valid phone number, and an email address.
- Requirements for Foreign Nationals: Passport-sized photographs, notarized and apostilled copies of the passport for identity proof, and proof of address. Additional notarization or apostille of documents may be required depending on the country.
- Step 2: Reserve Company Name (SPICe+ Part A)
- Objective: To ensure the proposed company name is unique and not similar to any existing companies or trademarks.
- Process: Fill out the SPICe+ Part A form on the MCA portal, providing details about the company type, class, category, sub-category, and a brief description of the business activities.
Naming Guidelines: Submit two proposed names in order of preference, ensuring they comply with the naming conventions and do not infringe on existing trademarks.
- Step 3: Submission of Company Details (SPICe+ Part B)
- Information Required: Details about the company’s authorized capital, the address of the registered office, information about subscribers and directors, applicable stamp duty, and applications for PAN and TAN.
- Compliance Declaration: A declaration affirming compliance with the provisions of the Companies Act 2013 must be digitally signed by a Chartered Accountant, Company Secretary, Cost Accountant, or a Lawyer who assists in the incorporation process.
- Step 4: Drafting and Filing MOA and AOA (SPICe+ MOA and AOA)
- A Memorandum of Association (MOA) outlines the company’s objectives, activities, and scope of operations. It defines the relationship between the company and the external world.
- The Articles of Association (AOA) detail the rules for the company’s internal management, including the roles and responsibilities of directors and the rights of shareholders.
- MOA and AOA must be drafted carefully and filed with digital signatures from subscribers (shareholders) and witnesses.
- Step 5: AGILE-PRO-S Form Submission
- Purpose: This is for registrations related to Goods and Services Tax (GST), Employees’ Provident Fund Organization (EPFO), Employee State Insurance Corporation (ESIC), opening a bank account, and obtaining a shop and establishment license (depending on the state).
- Process: Filed alongside the SPICe+ form, this form consolidates multiple applications, simplifying the post-incorporation setup.
- Step 6: Issuance of Certificate of Incorporation
- Upon verifying all submitted documents and forms, the MCA issues the Certificate of Incorporation (COI), including the Company Identification Number (CIN), and assigns the company’s PAN and TAN.
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Register Now!Limited Liability Partnership (LLP) Registration
The procedure for Limited Liability Partnership (LLP) Registration is explained here:
- Obtain Digital Signature Certificates (DSCs): Required for the designated partners for electronic filings.
- Acquire Designated Partner Identification Numbers (DPINs): Like DINs for company directors, each designated partner needs a DPIN.
- Name Reservation: File an application for the LLP’s name through the LLP-RUN (Reserve Unique Name) service.
- File Incorporation Documents: Submit Form FiLLiP (Form for incorporation of LLP) along with the required documents, including the LLP Agreement.
- Certificate of Incorporation: Once approved, the Registrar of Companies issues a Certificate of Incorporation, officially registering the LLP.
One Person Company (OPC) Registration
To register a One Person Company (OPC), entrepreneurs can follow the procedure outlined below:
- Digital Signature Certificate (DSC): Mandatory for the sole director for digital submissions.
- Director Identification Number (DIN): The sole director needs to obtain a DIN.
- Name Reservation: Reserve the company’s name through the SPICe+ Part A form.
- File SPICe+ Form: Complete and submit the SPICe+ form, attaching the MOA, AOA, and other necessary documents.
- Certificate of Incorporation: Upon verification, the ROC issues a Certificate of Incorporation along with PAN and TAN for the OPC.
Public Limited Company Registration
The registration procedure for a Public Limited Company is outlined as follows:
- Obtain Digital Signature Certificates (DSCs): Necessary for the proposed directors for filings.
- Acquire Director Identification Numbers (DINs): Each proposed director must have a DIN.
- Reserve Company Name: Reserve the name using the SPICe+ Part A form.
- File SPICe+ Form: Complete and submit the SPICe+ form with the MOA, AOA, and required documents.
- Certificate of Incorporation: Following approval, the ROC issues a Certificate of Incorporation, granting the company its official status, along with PAN and TAN.
Post-Registration Compliance
Adhering to post-registration compliance requirements, including appointing an auditor, regularly filing annual returns and financial statements, and complying with tax regulations, is crucial after the company is incorporated. This ensures the company’s smooth operation and legal standing.
Get Started!Conclusion
To register your company in India, it’s essential to adhere to the guidelines set forth by the 2013 Companies Act, select an appropriate business structure, and navigate the online registration procedures through the SPICe system. This includes getting a digital signature, picking a unique company name, and submitting key documents like the MOA and AOA. After providing the necessary proof and details about the directors and the office location, you’ll get a Certificate of Incorporation. Though the process might seem detailed, understanding each step and preparing the required documents can simplify it, leading to a smooth registration and setting up your company for future success.
Registering a company in India is made easy with IndiaFilings. Get started!
