How to Register a Company in India

Are you planning to kick-start your own business Is your entrepreneurial dream nearing realisation Nothing gives more adrenaline rush than being your own boss. So while we wish you all the good luck in your new venture, this post will help you get started by listing down important pointers on how to register a company in India.

Company Registration in India

Company registration in India is the official procedure through which a business is legally established and recognized as a distinct legal entity under the Companies Act, 2013. This process involves submitting detailed documentation and complying with regulations set forth by the Ministry of Corporate Affairs (MCA) and the Registrar of Companies (ROC).

Once registered, the company gains a formal identity, enabling it to operate legally within India, access funding, and enter into contracts. Registration provides several advantages, such as limited liability protection for its owners, enhanced business credibility, and adherence to regulatory standards. This formal recognition is essential for businesses seeking to operate efficiently, gain investor trust, and leverage legal protections and benefits in the Indian market.

What are the Different types of Companies in India

Structure of the Company	Ideal Structure for	Legal Compliances	Tax Advantages
Private Limited Company (Pvt Ltd)	Growing businesses, startups, medium to large enterprises	Compliance with Companies Act; Board meetings; annual filings with ROC	Separate legal entity; limited liability for shareholders
Public Limited Company (Ltd)	Large enterprises, companies seeking public investment	Stringent regulatory compliance; public disclosures; SEBI regulations	Access to public funds; limited liability for shareholders
Limited Liability Partnership (LLP)	Professionals, startups, small businesses	LLP Agreement; LLP registration with the Ministry of Corporate Affairs	Limited liability for partners; tax advantages similar to partnerships
Sole Proprietorship	Small businesses, freelancers	Minimal legal formalities; proprietorship registration	Personal income tax rates; eligible deductions
Partnership	Small to medium-sized businesses	Partnership deed; optional registration with the Registrar of Firms	Pass-through taxation; deductible business expenses
Section 8 Company	Non-profit organizations, charities, NGOs	Compliance with Companies Act; approval from Central Government; restrictions on profits and dividends	Tax exemptions for charitable activities

What Documents are Required to Register a Company in India?

To register a company in India, you need to gather several documents to ensure compliance with the legal requirements. Here’s a comprehensive list of the necessary documents for company registration:

1. Identity and Address Proof of Directors:

• Mandatory: PAN card
• Any One: Aadhaar card, Passport, Voter ID card, or Driving License

2. Passport-sized Photographs of Directors:

• Required as part of the documentation for company registration.

3. Proof of Registered Office Address:

• Utility Bills: Electricity, water, or gas bill (not older than two months)
• If Rented: Rent agreement and No Objection Certificate (NOC) from the owner
• If Owned: Sale deed or property tax receipt

4. Consent to Act as Directors (DIR-2):

• Declaration by proposed directors consenting to act as directors.

5. Declaration by First Subscribers and Directors (INC-9):

• Confirmation of eligibility and compliance with the requirements of the Companies Act.

6. Memorandum of Association (MOA):

• Legal document defining the objectives, scope of activities, and constitution of the company.

7. Articles of Association (AOA):

• Rules and regulations governing the internal management of the company, including the rights and duties of shareholders and directors.

8. Digital Signature Certificate (DSC):

• Required for all proposed directors to digitally sign the incorporation documents.

9. Director Identification Number (DIN):

• Each director must apply for a DIN online through the Ministry of Corporate Affairs (MCA) website.

10. Other Documents (if applicable):

• Additional documents such as board resolutions, consent letters, NOC from the landlord, etc., may be required based on specific ROC requirements or the type of company being registered.

How to Register a Company in India?

It is crucial to be well-informed about the registration process and this post lays out a step-by-step guide to the company registration process in India.

1) Apply For Director Identification Number (DIN)

The first step towards the company registration process in India begins by obtaining a unique identification number. According to the Companies Amendment Act 2006, all directors in a company (existing as well as intending directors) need to acquire their Director Identification Number (DIN).

DIN is a unique 8-digit number that is issued under the Companies Act section 153.

The requirements for DIN include full name

• fathers name
• DOB, identity proof
• address and it’s proof
• PAN card copy
• two photographs of all the directors proposed.

The application form is available online on the official website of the ministry of corporate affairs (MCA Website) as the DIN-1 Form. All business owners need to register themselves at MCA Website and acquire a login ID.

The DIN-1 Form must be dully filled and uploaded after paying the applicable fees. The DIN application form is charged a nominal INR 100 and takes about one day for execution.

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2) Apply For Digital Signature Certificate (DSC)

The authenticity of the documents and information provided in the DIN-1 Form can only be assured by getting a valid digital signature on all the documents submitted in the e-filing process.

The company registration process in India requires every business to acquire a Digital Signature Certificate (DSC) to ensure a secure way to get the documents submitted electronically. The requisites for application of digital signature includes proposed directors full name, fathers name, DOB, address with proof, PAN card copy, identity proof and a photograph.

The application fees for acquiring a DSC range from INR 800 5999 depending on the structure of the organization and the validity period. It usually takes 2-3 business days time to process a DSC form.

3) Filing For New User Registration

It is important to get registered on the MCA portal. You need to create a user account for filing an eForm, carrying out different transactions and paying the prescribed fees. The Ministry of Corporate Affairs does not charge any fee for creating an account.

4) Filing for Charter Documents

In a company registration process, the applicants are required to create charter documents like Memorandum of Association (MOA) and Articles of Association (AOA).

Memorandum of Association (MOA) – The MOA contains all the details of the registering company required during the incorporation process. It also provides details regarding the objectives and powers of the company and also the relationship between the outsider and the company. The MOA once created cannot be amended.

Articles of Association (AOA) – This document specifies the rules and regulations laid by the company. It provides details about the management, conduct and bye-laws governing the internal affairs of the company. The AOA acts as an auxiliary to the MOA, yet it can, however, be amended, if required.

5) Application For Company Name

The proposed company name should be unique and descriptive of the products and services offered by the business. It provides them with a distinguished entity from their competitors in the same field.

The Ministry of Corporate Affairs (MCA) has recently initiated a RUN (Reserve Unique Name) web service for incorporating a company. However, this service can be used only once. Due to a similarity in names or failure to abide by the Companies Incorporation Rules, once rejected, RUN cannot be re-used.

Hence, you must make sure that the proposed name is unique and fulfils all the guidelines prescribed. In case of rejection, the applicant must re-file another RUN form after paying the prescribed fees.

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6) Register Other Details

The next step in the company registration process in India includes registering the company name & address and notice for appointment of directors, secretary and manager.

• Form-1 must be carefully filled and submitted for incorporating the company name on the MCA website.
• It is mandatory to provide at least 4 alternative names for your company.
• The proposed company name should also abide by all the provisions listed under the Companies Act, 1950.
• Following this, you must choose one of them and process with filing Form -18 and Form-32 for companys address and appointment of directors, secretary and manager respectively.

Once the forms are submitted they are scrutinized by the concerned agencies. The whole process is completed in about 8-10 days. On being approved by the MCA, the status of your company registration form changes to Approved.

7) Acquiring PAN and TAN

The last step in the company registration process in India is acquiring PAN (Permanent Account Number) for your company. PAN should only be obtained from authorized agents who are appointed by the Union Trust of India (UTI) Investors Services Ltd or the National Securities Depository Ltd. (NSDL).

The process usually takes about seven days and costs up to INR 70.

After PAN, you also need to get TAN (Tax Account Number) for your company. It can be obtained from any Assessing Officer present at the Income Tax Department of your state. This takes a week’s time and costs around INR 60.

What is the Company Registration Cost in India

Here’s a detailed breakdown of the cost involved in registering a company in India.

Expense Category	Description	Estimated Cost (INR)
Digital Signature Certificate (DSC)	Required for all proposed directors to sign documents electronically	1,500 – 2,000
Director Identification Number (DIN)	Unique identification number for each director	500
Name Approval Fee	Filing the RUN (Reserve Unique Name) form	1,000 per application
Stamp Duty	Varies by state and authorized capital	1,000 – 10,000
MoA and AoA Drafting	Professional fee for drafting Memorandum of Association and Articles of Association	1,500 – 5,000
Professional Fees	Charges for consultants, CA, or CS for handling the registration process	5,000 – 15,000
Government Filing Fees	Filing forms with the Ministry of Corporate Affairs (MCA)	2,000 – 6,000
Notary and Attestation Charges	Costs for notarizing and attesting documents	500 – 1,000
PAN and TAN Application Fees	Fees for applying for company PAN and TAN	150 – 200
GST Registration Fees	Optional, but necessary for businesses needing GST registration	500 – 2,000

10 common mistakes to avoid during company registration in India

Registering a company in India is a meticulous process that requires attention to detail and compliance with legal requirements. To ensure a smooth registration, avoid these common mistakes:

1. Incorrect Company Names

• Choosing a Name Without Research: Ensure the proposed company name is unique. The Ministry of Corporate Affairs (MCA) can reject names that are too similar, causing delays.
• Non-compliance with Naming Guidelines: The name should comply with the Companies Act.

2. Incorrect Company Type

• Selecting the Wrong Structure: Choose the right company type (e.g., Private Limited, Public Limited, LLP) based on your business needs. Each type has different compliance requirements and benefits.

3. Incorrect Company Description

• Vague Business Objectives: Clearly define the company’s business activities in the Memorandum of Association (MOA). A vague description can lead to legal issues and hinder future business operations.

4. Incorrect Supporting Documents

• Lack of Proper Verification: Verify all documents for accuracy before submission, including identity proofs, address proofs, and other mandatory forms. Incorrect information can lead to rejection.

5. Not Drafting and Registering the Written Rental Agreement

• Unregistered Office Lease: If you are renting office space, ensure the rental agreement is registered and includes a No Objection Certificate (NOC) from the landlord.
• Incorrect Office Address: Provide a valid and accurate office address to avoid legal complications and ensure compliance with MCA requirements.

6. The Absence of Founders/Shareholder’s Agreement

• Lack of Clear Agreements: Draft and sign a Founders’ Agreement or Shareholders’ Agreement to clearly define roles, responsibilities, and ownership structures. This prevents disputes and miscommunications.

7. Incorrect Office Address

• Invalid Address Proofs: Provide correct and valid address proofs for the registered office. Utility bills should be recent, and the address should match the one mentioned in the documents.
• Changing Office Address Without Updating MCA: If you change your office address, promptly update it with the MCA to avoid non-compliance.

8. Invalid TAN and PAN Application

• Incorrect Information: Ensure accurate information is provided while applying for TAN (Tax Deduction and Collection Account Number) and PAN (Permanent Account Number).
• Delays in Application: Apply for PAN and TAN early in the registration process to avoid delays in starting business operations.

9. Insufficient Expert Support

• Lack of Professional Guidance: Seek assistance from experienced professionals such as Chartered Accountants (CAs), Company Secretaries (CS), or legal advisors to navigate the complex registration process.

10. Failure to Maintain Compliance Post-Registration

• Ignoring Post-Registration Requirements: After registration, comply with ongoing legal requirements such as annual filings, board meetings, and maintaining statutory records.

Conclusion

The company registration process in India is a legal procedure that all business owners need to abide by. The stipulated time for the company registration process, including the approval of the name, DIN and other requisites, takes approx 7 working days. However, now all the documentation are combined in an individual application form with the MCA to simplify the process. This definitely comes as a piece of good news for businesses in India looking for expansion.

FAQs on Company Registration in India 

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