It’s necessary to get yourself registered to run your business without any legal problem. India is a land of opportunity, no matter in which field your business is operating the chances of getting success is very high, so it just needs a start. Starting an entrepreneurship in India would fetch you great success. We assure a smooth process if you follow this step by step guide on how to register a company in India.
It is important to be well informed about the basics before diving into a registration process. It is important to know basics of what is a company, how it works and the difference between Public and Private companies.
There is about 7 Lakh registered companies in India and every 3 months, thousands of firms apply for a company registration in India. Under the ministry of corporate affairs, every company registration in India is done by the registrar of companies for the state.
The main difference between a Private and Public company is:
- A minimum number of Board members required for a private company is two and for a public company is seven.
- Private companies can have a maximum of only 50 members, but a public company can have any number of members.
- A private company can start its business as soon as it is incorporated but the public company shouldn’t start its business until it receives business commencement certificate.
- Private companies shouldn’t sell its shares to anyone or shouldn’t make any invitation to people regarding company shares, but a public company can invite people to buy its shares by issuing a prospectus.
- A private company may have two directors, but a public company must have at least three directors.
There are 4 major steps on how to register a company in India:
1) Acquiring Digital Signature Certificate (DSC)
2) Acquiring Director Identification Number (DIN)
3) Filling an eForm or New user registration.
4) Incorporate the company.
Let’s take it step by step, shall we?
1) Acquiring Digital Signature Certificate(DSC)
This is the first step on how to register a company in India in which each director of a company obtains their identification number. As per the amendment Act of 2006, acquiring a DIN is compulsory for every director i.e. as such every existing and intending directors have to obtain their DIN. To get DIN one need to file an eForm DIN-1. This form is available on the Official site of the ministry of corporate affairs.
Register yourself on MCA Website first and have a login id. After filling DIN-1 Form, one should upload the filled form by clicking to e-Form upload button on MCA website and should pay applicable fees.
After getting the generated DIN, one should intimate their company about DIN. The director can intimate their company about DIN by using the DIN-2 Form.
The company should then intimate the Registrar of Corporates (ROC) about all director’s DIN through DIN-3 Form.
If there is any change in DIN or need for any updates like a change in address, personal details etc, then the director should intimate this change by submitting the eForm DIN-4 Form.
2) Acquiring Director Identification Number(DIN)
In order to ensure the security or authenticity of documents filed electronically, the information act of 2000 demands a valid digital signature on the documents submitted electronically. This is the safest way that one can submit their documents. The digital signature certificate should be acquired by only those agencies which are appointed by the controller of certification agencies (CCA).
If you already have a digital signature then you can use the same, no need to apply for another. But do check for your digital signature validity, agencies issue DSC’s with one or two-year validity after expiry you have to renew it.
3) Filling an eForm or New user registration
This is about having a registered user account on MCA Portal for filing an e-Form, for online fee payment, for different transactions as registered and business user. Creating an account is totally free of cost.
Click here to create an account!
4) Incorporate the company
This is the final and major step in this guide on a how to register a company in India, which includes incorporating company name, Registering the office address or notice of situation of office and notice for appointment of company directors, manager, and secretary. Also, regarding the take and pay for their qualification shares.
Form-1A: Application form for availability or change of a company name. Once you apply for a new company name, the MCA will suggest four different form of your company name; you have to choose one among them. To do the same you have you have to fill Form-1A and submit.
Form-1: This is for application or declaration for incorporation of a company, in this form you have to fill the same name which you have chosen during application of form-1A.
This form is for notice of the situation of a new company office or change of situation of previously registered office.
For a new company, you have to fill the form with genuine office address and submit.
For a new company, this form is for notice for appointment of new Directors, Managers, and Secretary.
For an existing company, this form is for a change of directors, Manager, Secretary or company head.
You will need to check and follow these formalities during an incorporation of a company:
Obtain a TAN card
Obtain a Permanent account number (PAN) from the income tax debt. India
- Documents obeying shop and establishment acts.
- For foreign trade, Registration documents of import-export code from Director General of foreign trade.
- Registration documents of Software Technologies Parks of India (STPI).
- RBI approval for foreign companies investing in India and FIPB approval.
Both Indian and foreign directors need to have valid Digital Signature Certificates from the authorized agencies.