Company Registration in India - Step-by-Step Process

Learn about company registration in India, including types, authorities, required documents, timelines, step-by-step process and benefits.
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31-May-2024

Are you planning to start your own business? The first step towards realising your entrepreneurial dream is to register your company with the appropriate legal authorities. Company registration can be a complex process, but with the right guidance, you can navigate the procedure efficiently and quickly. Understanding your company structure, like whether it will be a corporation, will be essential to this process.

In this guide, we will cover all the essential aspects of company registration, including the company registration process, company incorporation procedure, and the benefits of business registration.

Types of company registration in India

In India, there are various types of company registrations available to suit different business structures and requirements. Here's an overview of the most common types:

  1. Private Limited Company Registration: There are many companies going for a private limited company registration type because a private limited company is the most popular form of business entity for startups and small to medium-sized enterprises. It offers limited liability protection to its shareholders, restricting their liability to the extent of their share capital. Private Limited Companies have a separate legal identity from their owners, allowing them to raise funds easily through equity shares while maintaining ownership control. If you are considering how to fund your business, understanding the concept of working capital is essential.
  2. Limited Liability Partnership (LLP) Registration: An LLP combines the benefits of a traditional partnership with the advantages of limited liability protection. A limited liability partnership registration offers partners protection from the actions of other partners, similar to shareholders in a company. It is ideal for small businesses where the owners want to limit their personal liability while retaining flexibility in management. If you are curious about the distinction between different business structures, exploring a limited liability partnership can be helpful.
  3. One Person Company (OPC): One person company registration is suitable for sole proprietors who wish to establish a corporate identity while enjoying limited liability protection. Unlike traditional sole proprietorships, OPCs have a separate legal existence, providing their owners with a safeguard against personal liability. It allows individuals to start and operate a business on their own, making it an attractive option for entrepreneurs. For those considering growth or potential acquisitions, understanding the process of acquisition may be beneficial.
  4. Public Limited Company Registration: A public limited company is suitable for businesses planning to raise capital from the public through the sale of shares on the stock exchange. It has more stringent regulatory requirements compared to Private Limited Companies, including mandatory public disclosure of financial information and compliance with corporate governance standards. Public Limited Companies offer greater access to capital markets but require substantial initial investment and compliance costs. The company's assets will play a key role in raising such capital.

Each type of company registration in India has its own set of legal requirements, benefits, and limitations. Understanding these distinctions is crucial for entrepreneurs to choose the most appropriate structure for their business goals and needs.

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Comparative list of different types of business structures in India

Company Type

Best Suited For

Tax Benefits

Legal Compliance Requirements

Limited Liability Partnership (LLP)

Service-based ventures or firms with modest capital needs

Eligible for 3-year tax holiday under Startup India, and benefit on depreciation

Must file business tax returns and annual ROC returns

One Person Company (OPC)

Solo entrepreneurs aiming to reduce personal liability

3-year Startup India tax holiday, enhanced depreciation, no dividend tax

Business tax return and ROC filing are mandatory

Private Limited Company

Growing businesses expecting high revenue

Tax holiday for first 3 years under Startup India, higher depreciation benefit

Requires business tax returns, ROC filings, and annual statutory audit

Public Limited Company

Large-scale enterprises with substantial turnover

Eligible for Startup India tax benefits for the initial 3 years

Business tax filing, ROC submission, and mandatory statutory audit required


Importance of choosing the right business structure

Selecting the appropriate business structure is a critical decision, as it directly impacts your income tax obligations and ongoing legal compliance. Different structures come with varying regulatory requirements. For instance, a sole proprietorship only requires the filing of an income tax return, whereas a registered company must file both income tax and annual returns with the Registrar of Companies.

Additionally, companies are legally required to get their books of accounts audited annually, which incurs added expenses related to hiring auditors, accountants, and tax professionals. These compliance responsibilities highlight the importance of choosing a business structure that aligns with your willingness and capacity to manage such obligations.

Moreover, the business structure you choose can influence your ability to attract investors. Legal and recognised entities such as LLPs or private limited companies tend to inspire more confidence among investors compared to informal setups like sole proprietorships. A sound business idea is more likely to secure funding when backed by a formal and compliant business framework.

Requirements for company registration in India

  • Unique company name: Ensure the proposed name is distinct from existing registered companies or trademarks.
  • Minimum directors: One for OPC, two for private, and three for public companies.
  • Minimum members: One for OPC, two for private, and seven for public companies.
  • Citizenship requirement: At least one director must be an Indian citizen, though foreign nationals can also be directors.
  • Director Identification Number (DIN): All directors must obtain a DIN.
  • Digital Signature Certificate (DSC): Directors and shareholders need a DSC for signing documents.
  • Registered office: A physical address in India is necessary, typically in the state of incorporation.
  • Memorandum of Association (MOA) and Articles of Association (AOA): Prepare these documents outlining the company's objectives and operational rules.

Company registration authorities in India

  • Registrar of Companies (ROC): Office under the Indian Ministry of Corporate Affairs, administers various acts including Companies Act, 2013, Limited Liability Partnership Act, 2008, Company Secretaries Act, 1980, and Chartered Accountants Act, 1949.
  • Ministry of Corporate Affairs (MCA): Oversees the administration of companies and LLPs in India.
  • Central Registration Centre (CRC): Facilitates swift processing of incorporation, closure, and regulatory compliance filings.
  • Centralised Processing for Accelerated Corporate Exit (C-PACE): Aims for expedited closure processes for companies.
  • CPC (Central Processing Centre): Ensures speedy processing of applications and forms for incorporation, closure, alterations, and capital raising.

These authorities collectively streamline the regulatory procedures, promoting ease of doing business and facilitating the corporate ecosystem in India.

Documents required for company registration in India

To register a company in India, you must submit a set of essential documents as per Ministry of Corporate Affairs (MCA) guidelines:

  • PAN card of directors: Mandatory for identity verification during registration.
  • Any one address proof: Aadhaar card, passport, voter ID, or driving licence of each director.
  • Passport-size photos: Required from all directors for documentation purposes.
  • Proof of registered office address: Recent utility bill (not older than 2 months).
  • For rented office: Rent agreement and No Objection Certificate (NOC) from the owner.
  • For owned office: Property ownership document like sale deed or tax receipt.
  • Consent form (DIR-2): Written consent from directors to act in their respective roles.
  • Declaration form (INC-9): Affirms directors meet eligibility criteria under Companies Act.
  • Memorandum of Association (MOA): Outlines the company’s main objectives and scope.
  • Articles of Association (AOA): Defines rules for internal governance and responsibilities.
  • Digital Signature Certificate (DSC): Needed by directors to sign documents digitally.
  • Director Identification Number (DIN): Mandatory for each director, applied via MCA portal.

Documents Required for Company Registration in Delhi

  • PAN card of directors and shareholders.
  • ID Proof: Aadhaar card, Voter ID, Driving license, Passport (for foreign nationals).
  • Address Proof: Bank statement, utility bills, resident card (for foreign nationals).
  • Proof of Registered Office: Utility bills, rental agreement, property tax receipts, sale deed.

Understanding the company registration process in India

The process for company registration in India involves several steps:

  • Begin by applying for the Digital Signature Certificate (DSC) as well as the Director Identification Number (DIN) for every director involved in the company.
  • Fill out part A of the SPICe+ form and reserve the company name via the Ministry of Corporate Affairs (MCA) website.
  • Proceed to fill out the company details in part B of the SPICe+ form.
  • File the electronic versions of the Memorandum of Association (eMOA) and the Articles of Association (eAOA).
  • Fill out the AGILE-PRO form for the opening of a bank account and the registration of EPFO, ESIC, GSTIN, and professional tax, if needed.
  • Upload the required paperwork as per the MCA's checklist.
  • Submit the completed SPICe+ form on the MCA website, attaching the DSC from the proposed director and a declaration from a licensed professional (Chartered Accountant, Company Secretary, Cost Accountant, or Advocate).
  • Pay the company registration fees and the Registrar of Companies (ROC) stamp duty through the MCA website and generate challans accordingly.
  • The application and documents will be processed by the Central Registration Centre (CRC) before being forwarded to the ROC for verification.
  • The ROC, upon successful verification, will register the company and issue a Company Incorporation Certificate, a Company Permanent Account Number (PAN), and a Company Tax Collection and Deduction Number (TAN).

Adherence to these steps ensures a smooth, compliant company registration process.

Company registration fees in India

Company Type

Government Fees

Professional Fees

Additional Costs

Private Limited Company

Rs.7,000 to Rs.15,000 (based on authorised capital)

Rs.15,000 to Rs.25,000 (for CA or CS services)

Digital Signature Certificate (Rs.2,000), Director Identification Number (Rs.500 per person)

Public Limited Company

Rs.20,000 to Rs.50,000 (based on authorised capital)

Rs.30,000 to Rs.50,000

Same as Private Limited Company, plus extra compliance-related costs

Limited Liability Partnership (LLP)

Rs.5,000 to Rs.10,000

Rs.10,000 to Rs.20,000

Cost of Digital Signature Certificate and LLP Agreement

One Person Company (OPC)

Rs.7,000 to Rs.15,000

Rs.12,000 to Rs.20,000

Digital Signature Certificate and Director Identification Number

Section 8 Company (Non-Profit)

Rs.5,000 to Rs.10,000

Rs.20,000 to Rs.30,000

Similar to other types, plus cost for Section 8 licence

 

Time required for an online company registration in India

Typically, registering a company in India takes around 8 to 10 business days, assuming all documents are accurate and the business name is available.
If there is an objection raised during the process, the timeline may extend to up to 12 working days.

Day

Activity

Day 1

Make a booking and understand the documents required.

Day 2 - 3

Document preparation and finalising.

Day 3

Application of company registration.

Day 4 - 8

Await for approval of application.

Day 8 - 12

Registration approval or objection raised.

 

Time required for an online company registration in Delhi

In India, registering a Private Limited Company typically takes 10-18 working days, provided all the required documents are submitted, and there are no complications. However, the actual time may vary depending on various factors such as the workload of government authorities, completeness of documents, and accuracy of information provided.

Process

Estimated Time

Preparation of documents

1 - 2 days

Obtaining Digital Signature Certificates

1 - 3 days

Obtaining Director Identification Numbers

1 - 2 days

Filing application with Registrar of Companies

1 - 2 days

Verification and approval by ROC

2 - 5 days

Issuance of Certificate of Incorporation

1 - 2 days

Total

7 - 14 days


Please note that these are estimated times and can vary based on individual circumstances and government processing times.

Benefits of company registration

There are several advantages to registering your company. Let us look at some of them.

  1. Legal compliance: Company registration ensures that your business complies with all legal and regulatory norms. It makes it easy for you to file taxes, maintain records, and create trust among customers and investors.
  2. Access to government aid and subsidies: With company registration in place, your business can access government schemes and incentives such as MSME benefits, export incentives, and more.
  3. Easy expansion across states: With proper registration, businesses can easily expand their operations to other states, opening up new markets and customers.
  4. Protection of personal assets: Registering your company as a separate legal entity from yourself provides personal asset protection, shielding you from any liability in case of business losses or debts.
  5. Access to business loans: Banks and financial institutions require registered documents from your business to provide a business loan. With proper company registration, you can quickly secure loans for your business, accelerating growth and development.

Conclusion

Starting a business can be a daunting process, but with Bajaj Finserv Business Loan, you can achieve your entrepreneurial dreams with ease. Proper registration brings significant benefits such as legal compliance, access to government incentives, and access to business loans. If you are looking to start a business, ensure that you complete the registration process on time and with all the necessary documents to realise the benefits of being a legal business entity.

Apply for a Bajaj Finserv Business Loan today and finance your entrepreneurial dreams with ease. With Bajaj Finserv, you can get access to a business loan of up to Rs. 80 lakh, minimal documentation, faster disbursal, and flexible repayment options. You can also benefit from a competitive business loan interest rate, helping you manage repayments efficiently and keep your business financially sound. Do not let financial constraints slow down your business growth - apply now and take the first step towards achieving your entrepreneurial dream.

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Frequently asked questions

What is the process of company registration?

The process of company registration involves selecting a business structure, choosing a unique name, obtaining Digital Signature Certificates (DSC) and Director Identification Numbers (DIN), preparing necessary documents, filing an application with the Registrar of Companies (ROC), and obtaining the Certificate of Incorporation.

Is registering a company free in India?

Registering a company is not free in India. It involves various fees and charges, including registration fees, stamp duty, professional fees for legal and consultancy services, and other incidental expenses.

What are the types of company registration?

The types of company registration in India include Private Limited Company, Limited Liability Partnership (LLP), One Person Company (OPC), and Public Limited Company.

Which company registration is best?

The best type of company registration depends on various factors such as business goals, size, ownership structure, liability protection, and regulatory requirements. For small to medium-sized businesses, Private Limited Company or LLP registration is often preferred due to limited liability protection and ease of compliance.

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