A startup is an energy booster for the Indian economy. Whether your startup is a sole proprietorship or a partnership business, it’s better to give your business a legal existence. The reason being, a registered company, can be closed down only by legal authorities in case of any unforeseen issues. Here we look at the steps to register a start-up or a new business in India.
The Ministry of Corporate Affairs has made it convenient for the new startups by introducing the online registration. In May 2015, Ministry of Corporate Affairs introduced a five-in-one form to make the process of registration easier. The new form known as Integrated Incorporation Form INC-29 will require you to fill only one form instead of the tedious process of filling out eight forms. An advantage of the new form is that it reduces the interaction with the authorities at the various levels.
Now you can register your new business from the comfort of your home. There are four steps that you need to do follow.
Apply for Director Identification Number(DIN)
The first and foremost process is to the registration of the company directors. You should create a login id in the MCA website. Here you can download the DIN-1 form by clicking on the eForm upload button.
A nominal amount of Rs 100 for DIN will be charged and normally it takes a day to get this number.
Acquire Digital Signature Certificate (DSC)
This is important to ensure the authenticity of the documents that you file electronically. Also, understand that the digital signature certificate should be authenticated by the agencies appointed by the controller of certificate agencies.
You would have to pay a nominal amount between Rs 400 and 2650. It will get at least four days to get the certificate.
Approval of the company name and certificate of Incorporation
The company name will be approved by Registrar of Company (ROC). Once the name is approved by ROC apply for the Certificate of Incorporation. This is done by filling out Form 1, Form 18 and Form 32.
You would have to pay Rs 500/- for the approval of the name and the Certificate of Incorporation, the amount can be anywhere between Rs 1000 to 4000.
The name approval will take at least two days while the certificate of incorporation will take a week.
The following documents that have to be attached to Form 1 while applying for the certificate of Incorporation.
- Signed copy of the Memorandum of Association (MOA).
- Signed copies of Articles of Association (AOA).
The power of Attorney from the various subscribers on judicial stamp paper worth Rs 100 and finally, the identification of the subscribers.
Apply for Permanent Account Number and Tax Account Number for the registered company
The PAN card can be obtained from Income Tax Department, India by paying a nominal amount of INR 94. You can apply for the TAN card by visiting the website https://www.tin-nsdl.com/. You will be charged INR 62.
The total time span to obtain these is seven days.
The other formalities that you can go about during this period include getting a rubber stamp of the company, registering for VAT and professional tax, employees provident fund and health insurance and so on.
Hence, the entire process of registering a company in India takes about 30-40 days with cost of around INR 10,000.