How to register a Company in India?

Introduction

The Private Limited Company (PLC) is a separate legal entity held by a group of people. It is registered with the Ministry of Corporate Affairs (MCA) in India. Benefits of registering the company include independent existence, ease in raising the funds for company growth and limited liability of owners. Keeping the above in mind, new-age business owners prefer PLC structure. Normally it takes around 10-12 working days to register a pvt ltd company. Let’s dig into how to register a company in india in detail:

Table of Contents

Types of PLC Minimum Requirements for PLC Registration Registration Process of the Company Document Checklist

Types of PLC

PLC registration in India has 3 major types:

Company Limited by shares: When shareholders are liable to pay only their share of capital in the company is known as a company limited by shares. It is suitable for all types of businesses such as manufacturing, trading, service providers, and hence it is the most preferred type of PLC.

Company Limited by Guarantee: When the members are not liable for any amount higher than the amount undertaken as the guarantee is the company limited by guarantee. Further, the members are only called at the time of winding up of the company. It is suitable for clubs, trade associations, and societies that require very minimal capital.

Unlimited Company: The members have unlimited liability, hence, they are liable for the debts that occur during the insolvency and winding up of the company. It is suitable for businesses that do not want limitation on minimum capital required and wants to carry out business easily.

Minimum Requirements for PLC Registration

Here are the 4 basic requirements to keep in mind:

• Minimum 2 directors: As per the Companies Act, 2013, one director must be an Indian resident who has continuously stayed in India at least for 12 months (as recently amended). Another one can be a foreign or Indian resident.
• Minimum 2 shareholders: Shareholders can be a person or corporate entity. In the case of a corporate entity, a person is authorized to represent the company as a shareholder.
• Registered office address in India: The Registered Office (RO) of the company must be in India. And, the company can choose a commercial or residential property as their RO Address.
• Unique business name: Entrepreneurs are very particular about the name of their company. It is very important to reserve company name. The name should also have a suffix that talks about the business of the company for example- Mother Dairy Fruit & Vegetable Pvt Ltd. The name itself determines that the company deals with dairy products, fruits and vegetables.

Registration Process of the company

Under the Companies Act, 2013, the Ministry of Corporate Affairs (MCA) governs the registration of PLC. It is concerned with the proper functioning of rules and regulations as per the law. MCA Registration forms fees depend upon two factors i.e, Stamp Duty and Normal Form filing fees. Since Stamp Duty differs according to authorized capital and state in which the company is incorporated, the minimum form fees of PLC registration start from INR 2000. We at LegalWiz.in with our guide on “how to register a company in india entrepreneurs to set up PLC in 4 Steps:

Step 1: Applying for Digital Signature Certificate (DSC)

The first step of our guide on “how to register a company in india” is to acquire Digital Signature Certificate to submit the electronic documents securely. The requisites include the directors and shareholders’ names, address proof, copies of pan card, identity proof, and passport size photographs. DSC acquires from Controller of Certification Agencies (CCA). The minimum validity is for 1 year. However, one can extend the validity for 2 years.

Step 2: Applying for Name Reservation (SPICe+Part A)

Form SPICe+Part A reserves the unique name of the new company. Before filing the form, one needs to check for name availability on MCA. This form includes information such as types of company, object and the main division of industrial activity. Using this form, one can submit names for the prospective companies. It’s important to keep in mind though that to use the SPICe+ Form you first have to register on the MCA website and create an account.

It takes a minimum of 2-3 business days to get the approval of SPICe+Part A by MCA. In case of an issue with proposed names, one gets another chance for the new name submission. After approval of SPICe+Part A, SPICe+Part B will be available for filing.

Step 3: Filing Details for the Proposed Company (SPICe+Part B)

After the approval of the name, Part B of the SPICe+ form for incorporation of company will become accesible. You have to fill the following information:

• Capital details
• Registered office address
• Subscribers and Directors details
• Selection of state or union territory for Stamp duty calculation
• Apply for PAN (Permanent Account Number) and TAN (Tax Account Number)
• Attachment of necessary documents in a legible format
• Declaration and certificate by practising professionals like CA, CS, or CMA.

Part B will also have the option for you to any from DIN, PAN for company, TAN for company, etc.

Step 4: Drafting and Filing of Incorporation Form

The final step in our guide on “how to register a company in India” is:

• SPICe+MOA (Memorandum of Association): It outlines a few important clauses for a company such as company name, registered office address, the main objective of the company, liability of the member, share capital and declaration by subscribers. The document needs to be verified and signed before a professional. Due to digitization, the subscribers and professionals are supposed to affix DSC to submit with MCA for approval.
• SPICe+AOA (Articles of Association): It specifies the legal name of the company, official address, equity capital, organization activities, financial and managerial actions, and shareholder’s meeting. It is a subsidiary document for MOA. It defines the roles, duties, and powers of the management to grow the organization. Same as MOA, members and practising professionals will have to affix their DSC before submitting it to MCA for approval.
• Agile Pro: This form specifies GST registration number, and credentials for EPFO (Employees Provident Fund Organization) and ESIC (Employee State Insurance Corporation). The form also includes a list of banks to select for opening a current account along with Shop and establishment registration, if applicable. After filing the above forms, auto-generated Form INC-9 needs to be filed. It’s a declaration of subscribers and directors.

You can also use one of our plans to register a pvt ltd company for a quick registration process

Document Checklist

While following our guide on “how to register a company in india”, you also need to know the documents needed. Here is the list of documents required for private limited company directors/shareholders :

For Indian Nationals

• Self-Attested PAN card copy of all the Directors and members
• Passport size photograph
• Copy of Aadhar Card
• Self- Attested Proof of Identity of Directors and members (Voter ID/Passport/Driving License)
• Self – Attested Address proof which should be in the name of the Director or shareholder (Mobile Bill/Telephone Bill/Electricity Bill/Latest Bank Account Statement showing name & address along with the last page of transaction with recent activities)

For Foreign Nationals

In the case of a foreign director/shareholder, all the documents should be notarized and apostilled.

• Passport size photograph
• Foreign national subscribers need to provide a passport as nationality proof
• Address proof including, Driving License/Bank Statement/utility bill not older than 2 months

Documents for Registered Office

• Business address proof (Electricity Bill/Telephone Bill/Water Bill/Gas Bill) should not be older than 2 months
• Copy of Rent Agreement (in case of rented property)
• No objection Certificate from the owner of the Property

Advantages of Registering PLC

Apart from knowing how to register a company in india, it’s also relevant to keep in mind some of the benefits of opening a PLC in India:

Establishing Trust and Credibility

Imagine a potential customer discovering your online store, filled with enticing products or services. While ready to make a purchase, their confidence wavers upon noticing the absence of a registered business name or official credentials. This is where company registration becomes a silent ally.

Registering your online business not only adds legitimacy but also conveys seriousness about your enterprise, setting you apart from fly-by-night operations. Trust, crucial in online commerce, becomes attainable through a registered business name, acting as the golden ticket to gaining credibility.

Legal Protection and Peace of Mind

Operating an online business without proper registration is like navigating uncharted waters without a compass. Company registration provides a legal umbrella shielding your business from potential storms. By registering, you also get the benefits of limited liability. establish your business as a separate legal entity, protecting personal assets in unforeseen challenges and offering peace of mind. This legal distinction ensures focus on nurturing and growing your venture.

Access to Business Opportunities

Company registration opens doors to lucrative business opportunities that may otherwise remain closed. Government tenders, contracts, and partnerships often require official registration, making it a prerequisite for accessing numerous opportunities. By registering your online business, you position yourself to tap into potential collaborations and ventures, gaining recognition as a serious player in the business arena.

Tax Advantages and Financial Benefits

Dealing with taxes can be daunting, but company registration can tilt the scales in your favor. Registered businesses often enjoy tax advantages and financial benefits unavailable to unregistered entities such as advance tax payment. From deductions on business expenses to potential tax credits, these perks contribute significantly to your bottom line. Consulting with a tax professional can help explore specific advantages aligning with your online business model.

Brand Protection and Market Differentiation

Your brand is the heartbeat of your online business, deserving protection. Company registration acts as a fortress, preventing others from using a similar business name or logo. This safeguards your brand identity and eliminates confusion among consumers. A registered business name also helps you stand out in a crowded market, distinguishing your online business from competitors and making it easier for customers to recognize and remember your brand.

Easier Access to Funding

Company registration is often a prerequisite for small business loans or investment opportunities. It demonstrates a commitment to transparency and accountability, instilling confidence in potential supporters. Being a registered business opens doors to funding options crucial for expansion, product line development, marketing investment, or platform upgrades.

Streamlined Business Operations

Efficiency is crucial for successful online businesses. Company registration facilitates streamlined operations by providing a clear structure for decision-making and responsibility. Defined roles and responsibilities reduce the likelihood of confusion or disputes among partners or stakeholders. Additionally, registered businesses find it easier to open business bank accounts, simplifying accounting and contributing to a more professional image.

Global Expansion Opportunities

Dreaming of international expansion? Company registration acts as your passport. Many international markets require official registration, positioning your online business to explore new territories and tap into a global customer base. A registered business enhances credibility with international partners and customers, signaling commitment to legal and business standards in the global marketplace.

Post Registration Compliances

After the incorporation of the company, compliances are one of the areas that must be taken care of so that entrepreneurs can focus on core activities. It helps organizations to make a proper system that defines the roles and duties of directors and shareholders, and hence is very important. Therefore, for any company, keeping post-registration compliances up-to-date is of vital importance. Some common compliances for companies to keep in mind are:

• Annual Filing Requirements:
  • Ensure the timely submission of MGT-7 Form within 60 days of the Annual General Meeting (AGM) for the Annual Return.
    File Form AOC-4 within 30 days of the AGM to disclose the financial statements.
    Event-Based Filings:
  • Promptly file ADT-1 Form within 15 days of the AGM when appointing or reappointing an auditor.
    Report any changes in the board of directors through Form DIR-12 within 30 days.
  • File Form INC-22 within 15 days to communicate changes in the registered office.
  • Submit Form PAS-3 within 30 days for the allotment of new shares.
• Compliance Certificates:
  • Private limited companies accepting deposits must file Form DPT-3, detailing deposits, within 90 days after the financial year closes.
  • Companies with outstanding payments to Micro or Small Enterprises suppliers should submit Form MSME-1 semi-annually by October 31 and April 30.
• Other Compliance Obligations:
  • File Form CHG-1 within 30 days when creating, modifying, or satisfying a charge.
  • Submit Form ADT-2 within 90 days if the appointment of an auditor is not ratified.
  • File MGT-14 Form within 30 days for specific resolutions and agreements with the Registrar of Companies.

Conclusion

In conclusion, registering a Private Limited Company (PLC) in India offers entrepreneurs a gateway to many amazing benefits. Such as, independent existence, fund-raising opportunities, and limited liability. Knowing how to register a company in india is very important. Once registered, a PLC enjoys the benefits of separate legal existence, easy fund-raising, and protection for owners. Seeking professional guidance can help entrepreneurs stay on top of these obligations and focus on their core activities. Get ready to embark on a journey of growth and success with a registered PLC in India.