The creation of a new corporation/company is known as incorporation (a corporation being a legal entity that is effectively recognized as a person under the law). The incorporation of a company may be a for-profit company, a non-profit entity, a startup, or a tiny, mini, or medium-sized company. The Companies Act, 1956, 2013, and other related Acts, Bills, and Rules govern corporate relations in India.
MCA also safeguards customers and provides a variety of valuable resources to stakeholders. The Ministry’s primary responsibility is to administer the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008, and other related Acts, as well as the laws and regulations enacted thereunder, to ensure that the private sector operates in compliance with the constitution.
How to choose a business structure and apply for company registration in India?
Let’s take a look at the key issues that any entrepreneur should consider before deciding on a business structure.
The number of owners/partners/ the business will have
One Person Company is perfect if you are a single person who owns the entire initial investment needed for the enterprise. A Limited Liability Partnership (LLP) or Private Limited Company, on the other hand, would be the right choice if the company has two or more investors and is aggressively pursuing outside funding.
Initial Investment to Determine the Choice of Business Structure
Yes, whether you want to save money right now, a Sole Proprietorship, a HUF, or a Partnership is the way to go. You may choose a Person Company, LLP, or a Private Limited Company if you are certain that you will be able to recover the setup and enforcement costs.
The responsibility of business arrangements such as a sole proprietorship, a HUF, or a joint company is indefinite. This assumes that in the event of a debt default, the whole loan amount will be collected by the members or associates in a profit-sharing ratio. Personal properties are at stake in these situations. Companies and LLPs, on the other hand, have a limited liability clause.
Income Tax Applicable
A sole proprietorship and a HUF are subject to the usual slab rates of income tax. The corporation revenue is combined with the individual’s other income in the case of a sole proprietorship. Some companies, such as partnerships and corporations, are subject to a 30 percent tax limit.
As previously said, getting investments is difficult when the market structure is unregistered. When it comes to investing, entities like LLP and Private Limited Company are trusted. Be sure you choose the correct structure and enlist the assistance of a professional so you can file properly.
How to Register a Company in India Online?
Here is the step by step process:
|Step 1: Digital Signature Certificate||Because the company’s registration is entirely online, digital signatures are required to submit forms to the MCA portal. All proposed directors and subscribers to the memorandum and articles of association must submit a DSC.|
|Step 2: Director Identification Number||Anyone who wishes to be a director of an organization must acquire a Director Identification Number (DIN), which is an identification number for a director. The proposed director’s DIN, as well as his or her name and address verification included in the company registration document.|
|Step 3: Registration on the MCA||The SPICe+ form must be filled out and uploaded on the MCA platform in order to qualify for company registration. The company’s Director must register on the MCA registry in order to fill out the SPICe+ form and upload papers. The director will log in after registering and gain access to MCA portal resources such as filing e-forms and browsing public records.|
|Step 4: Certificate of Incorporation||The Registrar of Companies will review the registration application until it has been completed and submitted with the appropriate documentation. He will grant the Company’s Certificate of Incorporation after verifying the submission.|
A corporation cannot be registered in India without proper proof of identity and proof of address. For the incorporation of all the company’s directors and shareholders, proof of identity and address will be needed.
At the time of registration, the registrar must receive all of the directors’ and shareholders’ information. As proof of identity, you can use your Pan Card, Aadhar card, driving license, or passport. For proof of address, you must apply the most recent telephone bill, electricity bill, or bank account statement.
For online company registration in India, the organization must have a registered office in India. To confirm access to the registry office, a recent copy of an electricity bill, a property tax receipt, or a water bill must be submitted. The repair bill or the selling deed with his/her consent to use the office as the company’s registered office is approved in accordance with the lease agreement.
Along with these notes, all directors’ DINs and DSCs must be uploaded. There are the general papers that must be presented for the formation of an LLP, a one-person company, a private limited company, or a public limited company.
Capital and Name of Company
Capital of the company
To start a private limited company or a one-person company, there is no minimum paid-up capital prerequisite. The public limited firm, on the other hand, must have a minimum paid-up capital of Rs.5 lakh. The sum of money a company has earned from shareholders in return for shares of the company is referred to as paid-up stock.
It is generated when a company sells shares directly to buyers in the industry, normally through an Initial Public Offering (IPO) (IPO). Any corporation must have a minimum authorized capital of Rs.1 lakh. The authorized capital refers to the maximum amount of share capital that the company is permitted to issue to its shareholders under its Memorandum of Association. The authorized capital must be specified in the Memorandum of Agreement.
Register Business Name
For reserving the business name, the applicant must use MCA’s RUN (Reserve Unique Name) web services. To preserve the company’s name, the form of organization and one suggested name must be entered. The proposed name should not be confusingly identical to any other corporation, LLP, or trademark. If the Registrar rejects the name, the claimant must file another RUN form and pay the prescribed fees to get the name approved.
The name of an OPC should be anything like “XYC (OPC) Private Exclusive.” A private company’s name should be in the form of “XYZ Pvt. Ltd.” and a public company’s name should be “XYZ Limited.”
Company Registration Online – FAQs
Q1. Where do I go to register my business?
You must submit an application to the Ministry of Corporate Affairs if you want to start a new business in India (MCA). You may also submit your application remotely via the MCA portal. You’ll need a Digital Signature Certificate (DSC) and a Director Identity Number (DIN) among other items to register.
Q2. Is it possible for a foreign national to serve as a director of a company?
A foreign national may be a director of a company incorporated in India, according to Indian company law. He does, however, meet all of the Act’s requirements. The most crucial is the assignment of a Director Identification Number (DIN).
Q3. What is the procedure for forming a private limited company?
As directors and shareholders, a minimum of two persons is expected. Along with the address proof of the registered office, the director’s PAN card, address proof, and bank statement is needed. It takes 10 to 15 days to complete the procedure.
Q4. What is the time frame for forming a private limited company?
On average, registrations take 10 to 15 days to complete. The turnaround time can vary based on how quickly our clients file the necessary paperwork and how quickly the government processes them.
Q5. What if my business name is already taken?
You’ll need to go to the Ministry of Corporate Affairs (MCA), which keeps track of registered business names, to see if yours is still there. If your company name appears in the company Registration directory, you’ll need to change it. If you’ve already submitted a submission, you’ll need to submit a new one under a different name.