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Registering your business in India is an important step for anyone starting a business. It gives your business a legal status and brings many benefits that can help your business grow and succeed. In this blog, we will look at who can register a company, the main benefits of doing so, and the steps to register a company in India.
Before you start the registration process, it’s important to know if you qualify. Here are the main requirements:
– Private Limited Company: You need at least 2 directors and 2 shareholders.
– Public Limited Company: You need at least 3 directors and 7 shareholders.
– One Person Company (OPC): You need only 1 director and 1 shareholder.
– There must be at least one director who is a resident of India, which means they should have lived in India for at least 182 days during the previous year.
– Directors must be at least 18 years old. There are no nationality restrictions, but it is mandatory to have a director who lives in India.
– All directors and shareholders are required to have a Digital Signature Certificate, which is needed for registering online.
– Everyone who wants to be a director of a company needs to get a DIN.
Registering your company has many important benefits. Here are the main advantages of company registration:
– Benefit: Registering your company gives it legal status, which is necessary for making contracts, owning property, and doing business.
– Impact: It makes your business more trustworthy to customers, investors, and banks.
– Benefit: Shareholders’ responsibility is limited to what they invest in the company.
– Impact: Shareholders’ personal assets are safe from business debts and obligations.
– Advantage: A registered company keeps operating indefinitely, even if its owners or leaders change.
– Effect: This maintains ongoing business operations and keeps things stable.
– Advantage: Registered companies can get money by selling shares, borrowing, or doing both.
– Effect: This gives them more chances to grow and expand compared to businesses that aren’t registered.
– Advantage: A registered company can create a powerful brand, which is important for marketing and keeping customers.
– Effect: It helps bring in more customers and build lasting relationships with them.
– Advantage: Companies can take advantage of different tax breaks and deductions according to the Income Tax Act.
– Effect: This lowers the total amount of taxes they pay, making them more profitable.
– Advantage: Transferring ownership of a company is straightforward by just transferring shares.
– Effect: This ease is helpful for growing the business or planning an exit
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– Advantage: Companies that are officially registered are more trusted by potential customers, suppliers, and investors.
– Effect: This trust can open up better business deals and collaborations.
To register a company in India, you need to follow these steps:
– Reason: Needed to submit electronic documents to the Ministry of Corporate Affairs (MCA).
– Method: Get a DSC from approved agencies.
– Reason: Required for all company directors.
– Method: Apply for a DIN by sending the required documents to the MCA.
– Purpose: To make sure the suggested company name is not already taken and follows the rules set by the Companies Act, 2013.
– Method: Suggest up to two names using the RUN (Reserve Unique Name) service on the Ministry of Corporate Affairs (MCA) website.
Required Documents:
– Memorandum of Association (MoA):Describes the company’s goals.
– Articles of Association (AoA): Includes the rules for managing the company.
– Method: Send these documents along with Form SPICe+ (Simplified Proforma for Incorporating a Company Electronically Plus) through the MCA website.
– Details: The Registrar of Companies (ROC) checks the submitted documents. If all is correct, they will issue a Certificate of Incorporation.
– Effect: The company becomes legally recognized and can start its business activities.
– Why: You need a PAN for tax-related matters and a TAN for handling taxes deducted at source.
– How: Request both PAN and TAN through the MCA website when you apply for company formation.
– Why: To handle the company’s money transactions.
– How: Present the Certificate of Incorporation, PAN, and other required papers to open a business bank account.
Starting a company in India is an important step for any business aiming to build a solid base. The advantages of registering a company, like legal acknowledgment, protection of personal assets, and increased trustworthiness, are more significant than the initial expenses and work required. By knowing the requirements and carefully following the registration steps, you can make sure the process goes smoothly and successfully. Once your company is registered, you’re in a better place to seize opportunities.
This blog explains the process of 7 types of company registrations in India viz, Public Limited Companies, Private Limited Companies, One Person Companies, Partnership Firms, Limited Liability Partnerships, Sole Proprietorships, and Section 8 Companies.
The Cost of Incorporation of a private limited Company would vary from Rs. 6,000 – to Rs. 30,000/- depending upon the following: Number of Directors.
Yes, you can register a Private Limited company, but it’s important to understand what needs to be registered and the steps involved in the process. You’ll need to know which documents are required, and who is qualified to register a Private Limited company. To complete the registration, you will also need to fill out the necessary forms.
To register a company, you must utilize the MCA Portal. However, if you are not a Chartered Accountant or a legal professional, you will need the help of a legal expert to successfully complete the registration process.
The penalty for not registering a company can be as high as Rs. 10,000 per day of default.
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