Choosing a business structure for a business you are considering starting is one of the most important initial steps. The chosen business structure becomes the base for all the future activities of the company. However, once you have chosen a specific business structure, you need to register your company with the Ministry of Corporate Affairs.
Since every business is required to register to create a legal identity, it is important to know the registration process. However, the company registration process differs based on the type of business and share capital. This article will help you navigate the legalities of company registration in India.
What is the process of registering a company in India
Registering a company is mandatory and provides numerous benefits, such as the right to take a loan from a bank or NBFC using their online marketplace or platforms. Here are the steps you should follow to register a company in India:
Obtain a Digital Signature Certificate
The company registration process in India has become online and requires a digital signature. To obtain a DSC, you must obtain one from recognised issuing authorities. DSC is compulsory for all the subscribers and shareholders in the Articles of Association (AOA) and Memorandum of Association (MOA).
Apply for Director Identification Number
The next step is to apply for the Director Identification Number (DIN). DIN is the identification number for a director and is needed to identify a director of the company legally. One DIN is sufficient to be a director in any number of companies in India. You have two options for obtaining a DIN: file DIR-3 or fill out the SPICe+ form.
Name approval
A company’s registration process is done by filling out the SPICe+ form. You need to visit the Ministry of Corporate Affairs (MCA) web portal and fill out the SPICe+ Part A. In the form, you need to apply to reserve the company name by proposing two names. Afterwards, the Registrar of Companies (RoC) will analyse the application and will reserve the company name.
Filling SPICe+ form
Effective 23 February 2020, all companies must register using the online SPICe+ form. The form must be filled out to register the company, issue DIN, TAN, and PAN applications, and register ESIC and EPFO. You must enter details such as the registered office address, director names, share capital, business activities, etc. You will need to pay the fee shown to register a company.
Certificate of Incorporation
Once you have submitted the SPICe+ form with all the personal and company-related information, you will receive the Certificate of Incorporation (ROC). The ROC will issue the certificate if the form is complete and the information you entered is accurate. You will also receive the Corporate Identity Number (CIN) along with the certificate.
PAN and TAN
The SPICe+ form also includes the company’s applications for PAN and TAN. While filling out the SPICe+ form, these two applications are automatically submitted. Once completed, you will receive an email from the Ministry of Corporate Affairs containing the company’s Certificate of Incorporation, PAN, and TAN.
Some factors to remember while registering your company
Here are more factors to consider while registering a company in India:
- Once the company is registered, you must open a bank account in its name.
- You must issue share certificates to all the company’s directors and shareholders within two months of incorporation.
- Within 30 days of incorporation, you need to appoint an auditor for the company.
- You must register for GST if the company turnover exceeds the specified limit.
Conclusion
The process of registering a company in India involves numerous factors and legalities. However, introducing the SPICe+ system has streamlined the process, making it relatively easy. All you need to do is fill out the SPICe+ form and submit the relevant documents. Within 7-10 days, your company will be registered, and you can start carrying out business activities.