Starting Your Company Incorporation

India has the world’s sixth largest and fastest growing economy of 2021, with a projected growth of 12.55%. India allows 100% Foreign Direct Investment (FDI) and full ownership retention. It also has well-organized and comprehensive tax and financial systems along with a legal structure that is business friendly. India is undoubtedly a great place to start a business and it all begins with proper company incorporation.

Business and private limited company registration is now an online process and includes setting up a wholly owned subsidiary as well. Further, state-specific laws have been replaced with one central law to streamline the administrative procedure. It’s fast, easy and cost-effective, modernizing the entire process for locals and foreigners alike. Registration now falls under the purview of the Registrar of Companies (ROC). This is a department within the Ministry of Corporate Affairs in India.

A private limited company is a business that is incorporated and has a separate legal personality. It offers limited liability to its shareholders and owners, who are only liable to the extent of their share investment. To get started, you will need to prepare for the incorporation process. If everything is in order, it can be processed as quickly as seven days. In a nutshell, as long as the business activity is permissible, your pvt ltd company registration needs:

• A minimum of two directors and two shareholders (maximum number is 15 directors and 200 shareholders).
• A resident Indian director (either a shareholder or an employee).
• A rented or owned registered place of business in India (either virtual or physical).

Documentation that needs to be submitted includes the following:

• Photographs and PAN cards for all Indian directors and shareholders.
• Apostilled or authenticated proof of identification of all directors.
• No Objection Certificate (NOC) from the landlord for using the registered place of business.
• Proof of registered place of business – utility or electricity bill of the latest two months submitted to the ROC.

Non-Resident Indians (NRIs) and foreigners are allowed to acquire equity shares in a private limited company. There is no minimum share capital, but Authorized Capital Fee is paid to the Government for issuing Rs 1 lakh of shares.

India Company Incorporation Steps

It should be understood that starting a business in India requires registration and a licence to trade legally. The following is a summary of how to begin your private limited company registration procedure:

1. Obtain a Digital Signature: Before you can register your business with the Ministry of Corporate Affairs, you will need to apply for a Digital Signature Certificate (DSC). Simply put, a DSC is an encrypted key which a person may use to sign documents digitally. Since the startup process is digital, the MCA has made getting DSCs a prerequisite for all new registrations. Any private limited company India registration process will be incomplete without the DSC. To get one, you may visit any of the nine certifying authorities’ websites.
2. File Incorporate India Company Forms: While the process of private limited company registration involved several separate forms in the past, like INC-29, the MCA has now brought them under one single umbrella. The SPICe structure (FAQ), or Simplified Proforma for Incorporating Company Electronically.
3. Start to register Under the Shop and Establishment Act: The government requires commercial establishments to register under the Shop and Establishment Act. It is to ensure that all India companies comply with local labour laws. However, registration under the Shop and Establishment Act is not required for all types of undertakings, and its terms may vary from state to state. Perhaps the easiest way to do this is to review documents specific to your particular area. For example, the state of Maharashtra details 32 steps to apply online.
4. Open a Current Account: Making a profit is probably one of the reasons why you are starting a company in India. For you to receive payments from customers and pay your bills, you will need a ‘current’ bank account. It is more professional to give your clients a corporate bank account, as opposed to using a personal bank account. Furthermore, most Indian banks will flag savings accounts being used for commercial purposes, making a current bank account the only option for businesses of any size.
5. Register for GST: Since your business will likely engage in some form of commercial trade and exchange goods or services across state borders, it will be treated as a ‘taxable person’ by the tax authorities. The Goods and Services Tax (GST) registration is for businesses that fit this description and also includes a company with an annual turnover exceeding Rs. 20 lakh.

India Company Incorporation Procedure

• Compared to other major economies, the process of company incorporation in India is relatively streamlined.
• Apply for the Directors Identification Number (DIN). DIN is mandatory, does not expire and is limited to one per director. Foreign nationals can also apply for DIN, which will enable them to become directors of the company.
• We are getting the digital signature of the director(s).
• Start registration of the company name (must be unique).
• Prepare Minutes of Association, Articles of Association, and other documentation with the Ministry of Corporate Affairs.
• Get an SSI or Small Scale Industry registration where appropriate. This is provided by the Ministry of Micro, Small and Medium Enterprise.
• Get signatures of shareholders, directors, legal representative(s), and treasurer to complete the company registration documents and get the Certificate of Incorporation.

In conclusion, once you have decided on your business idea, performed adequate research and finally done with the India company formation, all that’s left for you to do is start! Everything may not go as planned, but if you are sufficiently persistent and innovative, challenges will work itself out. There’s no shame pivoting your business, trying and failing multiple times, one day you’re going to succeed.

How OKPAY Can Help for India Company Incorporation Services?

Starting a company in India could turn out to be a great decision, provided that you choose the right business structure and have knowledge of the legal and bureaucratic challenges. It is where 3E Accounting can help you by giving advice and support from the moment you decide which type of company you want to set up and where to when you receive the Indian Company Incorporation Certificate. If you would like to do online company registration, we can help through the online company registration process as well! With 3E Accounting’s customizable business solution packages, pvt ltd company registration in India is not something you need to fret about.

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