India has always been a leader in potential business opportunities, with approximately 11 lakh companies currently operating on a valid Udyog Aadhar. Hence, choosing the perfect foundation for your business can help it persist for a long time and prove beneficial in the long run.
As the world is moving towards modernization, business sectors have started to take a stronger stance in modernizing business practices.
In the past, the business world was based on the idea that only people with a huge pool of funds or financial resources could only establish a company. However, with the advent of time, this complete outlook transformed completely.
This is why people nowadays consider starting a company to comprehensively express their creative ideas and unique business concepts to the world.
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What is a company and how to register for it?
A company can fundamentally be defined as a business organization formed by individuals to engage in and operate a commercial or industrial business.
All those looking to establish their company in India must note that the initial step is to register the newly-formed company under the Companies Act, 2013.
However, the journey to create and register a company in India is not easy and requires the compliance of various steps mentioned below:
Determine a business plan and company structure
This is the first and the most basic step in registering a company in India. Creating a business plan and company structure can help decide the path on which the company will go on and how the operations of the company will be handled in the coming years.
Therefore, it is necessary to create a business plan to check the distinct requirements of registering and fostering the formed company.
In addition to this, choosing a successful business plan can further play a pivotal role in your company’s success. This is because a business plan directly affects the tax returns and the legal structures of the company.
For instance, a sole proprietorship firm owner has only to file the GST and income tax returns. However, a private or a public limited company is required to file the GST, income tax returns and to get the periodic audits completed and comply with countless other formalities.
Therefore, before registering for a company, the promoters must be knowledgeable about various business jargon and legal regulations, which will help them select the ideal company structure and the laws and compliances they are bound to follow.
Applying for a DSC certificate
The DSC, also known as a Digital Signature Certificate, works as a verifier and determines the credibility of company software or a document. This digital signature is the same as a physical signature.
Still, it acts as a seal that deals with checking a document’s authenticity and serves as a security to repel fraudulent documents.
To obtain a DSC certificate, some guidelines are issued by the Ministry of Corporate Affairs (MCA), which includes verifying the documents through multiple certifying authorities.
Choose a company name and file for sanction
After obtaining a DSC certificate, the next step is to choose your company’s name. For MSME registration, the owner needs to use RUN (Reserve Unique Name), an electronic form that an owner needs to fill for name approval.
For all those who are unaware of the MSME full form, it stands for Micro, Small, and Medium Enterprises. However, before registering the company name, the intended name should be checked thoroughly to not clash with a similar name.
Also, if you do not check the company name properly and match some other already existing companies, it can lead to numerous legal implications.
Get the DIN (Director Identification Number)
The DIN or Director Identification Number is a special kind of number given by the central government to the owners looking forward to starting their own company. There are different types of DIN forms such as:
- SPICe Forms (INC 32): This form is used to assign unique DIN numbers to the newly-formed companies that are yet to get their Udyog Aadhar.
- DIR-3: This form is to be filled by people who aspire to become the director of the registered company.
- DIR-6: This form acts as a messenger and provides information about any directorate changes.
Register the company for incorporation
The next step to follow while registering a company in India is registering for the company incorporation and receiving a Udyog Aadhar.
Under this step, you will be required to file for the company’s establishment by filling up the SPICe or INC 32 form provided by the MCA (Ministry Of Corporate Affairs).
The SPICe or Inc 32 forms help in incorporation or the birth of your company and is used in performing the following steps:
- Getting a DIN (Director Identification Number).
- Registering a company’s name.
- Incorporating the company.
- Applying for the PAN number and Udyog aadhar number.
- Apply for the Tax Deduction Account Number (TAN).
- Get GST registration number
5. File for AOA and MOA
The ultimate step you need to follow while registering a company in India is to file for AOA and MOA. Articles of Association (AOA) and Memorandum of Association (MOA) are the frameworks that decide the legal power a company can wield, and they are generally known as the constitution of a company.
MCA (Ministry Of Corporate Affairs) has provided forms INC-33 and INC-34 respectively to file for MOA and AOA. In addition to this, registering a company in India usually takes around 7-9 days.
After that, the company promoters are required to follow various post-incorporation policies to obtain the Udyog Aadhar.
To sum up, it can be concluded that the steps mentioned above are of utmost importance and must be performed in a step-by-step way to ensure the smooth establishment and registration of a company in India.
Also, suppose you perform these steps accurately. In that case, there won’t be any requirement to spend huge sums in hiring a professional, and you would be capable enough to register your dream company in India quickly and in a hassle-free manner.
You may require funds to buy machinery, hire employees, and other expenses. In that case, we have got your back. You can apply for a quick business loan from Ziploan. We provide hassle-free loans up to Rs. 7.5 lakh within 3 days*.
Frequently Asked Questions
The cost of registration of a sole proprietor company is nearly Rs 2,500 while that of a partnership firm is nearly Rs 5,000. If you incorporate a private (LLP or LLC) company with a minimum authorized capital of Rs 1,00,000, the registration will cost you Rs 7,000.
Following are the days will take to company registration:
1) Getting Digital Signature Certificate – 2 days
2) Getting Director Identification Number or DIN – 1 day
3) Name Approval – 3 days
4) Company registration – 5 days
Documents Required for Company Registration
1) Passport
2) Election Card or Voter Identity Card
3) Ration Card
4) Driving License
5) Electricity Bill
6) Telephone Bill
7) Aadhaar Card
LLP is a preferable form of organization as it provides benefits for both the private limited and partnership firm. LLP is a legal entity separate from its partners.
The registration fee for organizations whose nominal share capital is limited to Rs. 10,00,000 – Rs 2,000. The registration fee for organizations whose nominal share capital ranges between Rs 10,00,000 to Rs 50,00,000 – Rs 2000.
A company cannot have the same name as another registered company. Any company formation or change of name application containing a company name that is the same as or too similar to an existing name will be rejected by Companies House.
It is entirely legal to operate as a sole proprietorship without registering your company. Keep in mind, however, that doing so does not provide you with any form of legal protection if you experience debt or face legal action.
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