How to Register a Company/Startup in India
Company registration in India is followed by rules and regulations defined under the Companies Act. The structure of the company and its compositions of members depend upon what motives it holds to exist in the economy. Company registration helps ventures to get legally recognized under government records as well as a separate identification in the corporate world. Registration to a particular entity is nowhere mandatory as there are certain forms of business that do not require registration to carry their operations like sole proprietorship where the owner enjoys benefits of unlimited liability and non-restriction of any law or regulation, while such advantage is not available to any company.
Every company whether big or small, have huge investment or not, hire a few or a big chain of employees is required to get registered under rules and regulations of Companies’ Act and have to file their all such records required by the government annually in order to run their business in harmony of business rules defined. Company registration in India is a legalized matter of concern undertaken by experts after complying with all rules and regulations defined by the government.
List of Companies Requiring Compulsory Registration
Before defining the basics of company registration, it is important to know about all types of companies sanctioned by the Companies Act to be counted under company registration criteria. Companies forms requiring compulsory registration include :
- Private Limited Company:- Company owned and managed by private individuals.
- A company limited by shares: Company owned by individuals having liability limited by an amount stated in the memorandum.
- A company limited by guarantee: Company owned by individuals being liable for only a guaranteed amount as stated by themselves in the memorandum.
- Unlimited Company: Company not restricted by a limited amount of liability on members which means that the liability of members is unlimited.
- Public Company: Company is managed by directors and owned by the general public by subscribing to its shares. Its articles do not limit the number of members and allow easy transfer of shares among other members.
- One Person Company: Company owned and managed by a single individual only.
- Limited Company: Company having no limit on the number of members affixed and requires the appointment of minimum of 3 directors.
- Section 8 Company: Company incorporated for promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object, provided that it applies the earned profits on its objectives and prohibits to distribute any kind of dividend to its members.
Also Read: How to Register a Copyright in India
A process of Company Registration
Step 1: Obtaining DIN (Director Identification Number) and Authentication of Documents with DSC (Digital Signature Certificate ).
Step 2: Submission of Company Name for Approval and Filing of SPICe or Form INC-32
Step 3: Generation of Electronic MoA – Memorandum of Association (INC-33) and AoA -Article of Association (INC-34).
Step 4: Filing of Application in Spice-32 for apply PAN TAN of Company.
Obtaining DIN (Director Identification Number) and Authentication of Documents with DSC (Digital Signature Certificate )
DIN specifies for a Director Identification Number which is required at the time of company registration to acknowledge the interested parties about the legal directors of the company. To begin with, each person associated and representing himself to be the director of the company have to obtain a DIN (Director Identification Number) online.
With a single DIN number, one director can apply for directorship in multiple companies. To obtain DIN, each proposed director of the company has to file Form DIR-3 along with required details and identity proofs Aadhaar card, PAN details, etc to the MCA department.
DIN can also be obtained by filing in SPICe forms after putting in all company details. On successful submission of SPICe form, the system automatically generates DIN for a minimum of a number of 3 directors. If DIN is required for more than 3 directors then each director has to separately apply with Form DIR-3.
For assurance and authentication of all forms & documents submitted to the MCA department during company registration, each witness and subscribing member of the company has to mandatorily obtain and file a DSC (Digital Signature Certificate). DSC of each legal member associated with the company can be obtained by complying with procedures of various certifying authorities listed on the official portal of MCA.
Submission of Company Name for Approval and Filing of SPICe or Form INC-32
Specification of a unique name for itself is yet another important obligation for a company. One can apply for the proposed name for the company by putting it directly in the company registration form SPICe (INC-32) in which only a single name can be given for approval While a company has another option of either filing Form RUN (RESERVE UNIQUE NAME)by which submission of 2 alternative names for approval can be given to government.
As numerous companies get registered with similar names every day, so it is always advisable to go with the route of Form RUN to obtain quick approval on a particular company name out of 2 options sufficed to the government.
For faster processing of company incorporation applications, the Ministry of corporate affairs made some relieving changes in the incorporation procedures of a company. Simplifying registration with a single SPICe Form INC 32, the government incorporated all the basic approvals and submission of member details in a single form.
Earlier, an applicant has to submit Form INC-1 for approval of the business name, Form INC 7 for submission of company MOA and AOA, Form DIR -3 for receipt of the director identification number. But now as changes to business compliance made it was decided to incorporate all these forms into a single registration form SPICe Form INC 32 for company registration.
Generation of Electronic MoA – Memorandum of Association (INC-33) and AoA -Article of Association (INC-34).
Memorandum represents the ‘Charter’ while Article of Association represents ‘the basic rules and regulations’ followed by a company. Both these documents are necessary to be filed with the company registration form SPICe for successful incorporation. For the approval of such policy documents from government separate forms of e-MOA and e-AOA have been specified which are submitted along with SPICe form to the MCA department on their official web portal.
Filing of Application or Company PAN And TAN.
Earlier there was a provision that for application of PAN TAN that the company has to file Form 49A for PAN and 49B for TAN The applicant has to download both these forms and then have to add all the required details asked along with affixing the digital signatures to upload it back on MCA portal. But now the company can apply its PAN TAN in SPICe(32) at the time of incorporation