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Company Registration India: Guide on registering a company in India – Rakshit Sharma

company registration in India

Company Registration Process in India

If you are an entrepreneur in search of information on how to register your business in India, this general comprehensive guide is for you.

There are several steps that need to be taken in order to register a company in India. But first, let us talk about what a company is.

A company according to Section 2 (20) of the Companies Act, 2013 is defined as “a company incorporated under this act or under any previous company law”. It is not clear from the Act what a company is made of. But we can say that a company is a legal entity that is made up of different people who want to make money through business.

There are a lot of business owners who want to start their own businesses in India because it has one of the fastest growing economies in the world. You will have to register your business with the government in India before you can open for business there. Let us now look at how to set up a business in India.

If you want to start a business in India, the first thing you need to do is decide what kind of business you want.

Types of Companies

  1. Private Limited Company: For businesses that want to get money from a small group of shareholders, a private limited company is the best choice. It is its own legal entity and needs at least two shareholders and two directors.
  2. Public Limited Company: A Public Limited Company is good for companies that want to sell shares to the public to get money. It is its own legal entity and needs at least three directors and seven shareholders to be formed.
  3. One Person Company: If your business only has one owner but wants to be its own legal entity, a One Person Company is the way to go. At least one director and one shareholder are needed.
  4. Limited Liability Partnership: A Limited Liability Partnership is good for businesses that want to be their own legal entity but still run like a partnership. At least two people must be involved.
  5. Partnership Firm: Businesses that want to work together as a partnership and split profits and losses should set up a Partnership Firm. It does not have its own legal identity and needs at least two partners.
  6. Sole Proprietorship: A sole proprietorship is good for businesses that are owned and run by one person. It is not a separate legal entity and does not need to be registered in any way.
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Each of the above types of companies has its own set of pros and cons, so it is important to pick the type of company that fits your business goals before you start the registration process.

Company Registration is the process of telling the government about your business. To do this, you need to get a certificate of incorporation from the Registrar of Companies (ROC). The certificate shows that the business is registered with the government and is allowed to do business in India.

Now, let us look at the documents that a company would need to be registered.

Documents Required

What you need to register a business in India depends on the type of business you want to set up. Nevertheless, the following are some documents that all types of businesses need:

  1. PAN Card of Directors and Shareholders: A Permanent Account Number (PAN) is a ten-character string of letters and numbers that can be used as a foundational ID. Anyone who asks for it can get it from the Indian Income Tax Department. As an important form of ID, it is issued by the Central Board for Direct Taxes (CBDT) and is watched over by them.
  2. Aadhaar Card of the Directors and Shareholders: Everyone who lives in India can get an Aadhaar number, which is a twelve-digit unique identification number based on their biometrics and demographic information. People from outside of India can apply for this if they have lived in India for a long time (182 days or more in the preceding year from the date of submission of the Aadhaar card application).
  3. Passport Size Photographs of the Directors and Shareholders.
  4. Address Proof of the Registered Office: For this, you will need things like an Aadhar card, a phone bill, an electricity bill, etc.
  5. Rent Agreement: This only needs to be done if your business rents an office space.
  6. No Objection Certificate (NOC) by the Owner: If you rent the office space, you need to do this. The owner of the property gives this certificate. The owner’s permission for the business activities his tenants are doing is written on the certificate.
  7. Memorandum of Association (MOA): This legal document is what every business is built on. The purpose of the company and its relationship with shareholders are spelled out in this document.
  8. Articles of Association (AOA): This document lays out the rules for how the company should be run from the inside. It tells the people in charge of the company what their rights, duties, and powers are. This paper goes along with the Memorandum of Association (MOA).
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The registration process can begin once all of the above documents have been made.

Allow us to now look at the step-by-step process of setting up the business.

Steps Involved in Company Registration

In India, the following steps must be taken in order to register a business:

Get a certificate for digital signature (DSC)

Getting a Digital Signature Certificate is the first thing that needs to be done to register (DSC). With this type of signature, you can sign documents online. You have to fill out an application for company registration online.

Get a Director Identification Number (DIN)

The second thing you need to do is get a Director Identification Number (DIN). Everyone who works for the company is given a unique identification number. The application for company registration must be sent in.

Name Reservation

Step three is to choose a name for your business. You can use the website of the Ministry of Corporate Affairs (MCA) to see if the name is not already taken. Once the name has been chosen, an application for name reservation must be made.

Making the Articles of Association and the Memorandum of Association (MOA) (AOA)

The fourth step is to write the Articles of Association and the Memorandum of Association (MOA) (AOA). The goals of the company are written in the MOA, and the rules and laws that govern the company are written in the AOA. Both of these papers must be sent to the Registrar of Companies along with the application to start a business and a few other papers (ROC).

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Filing the Application for Company Registration

The fifth step is to file the application for company registration along with all the required paperwork. This form needs to be turned in to the Registrar of Companies (ROC). After you send in your application, the ROC will look it over and give you a Certificate of Incorporation if all the documents you used are correct.

*The steps listed above are the general steps that all types of companies must take when they register*

Conclusion

Start-up business owners in India need to register a company before they can do anything else. The registration process can be hard to understand and take a lot of time, but it gives the business legal protection, credibility, and legal recognition.

It also has a lot of benefits, like limited liability, tax breaks, building a brand, and more. So, business owners can register their company and enjoy the benefits of doing business in India as long as they have the right type of company and the right paperwork.


About Author

Rakshit Sharma is a student of Amity Law School, Noida, Uttar Pradesh, India. He loves cycling. He published his first article on LawGlobal Hub in September, 2022, and became a volunteer at the legal tech giant in January, 2023.

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