Empowering Entrepreneurs to Start Their Dream Companies. Our mission is to simplify company formation and support aspiring entrepreneurs on their path to success.
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1. Decide on the Business Structure
In India, the most common business structures for startups are:
- Private Limited Company: Limited liability, separate legal entity, suitable for growth, and raising capital.
- Limited Liability Partnership (LLP): A hybrid between a partnership and a company with limited liability but simpler compliance.
- Sole Proprietorship: Simple and inexpensive, but personal liability is not limited.
- Partnership: Simple and inexpensive, but personal liability is shared.
Private Limited Company is the most popular for startups because it allows you to raise funding, offers limited liability, and is a separate legal entity.
Choose a Name for Your Startup
- The business name should be unique and reflect the nature of your business.
- You must check the availability of your desired business name through the MCA (Ministry of Corporate Affairs) website using the RUN (Reserve Unique Name) service.
- The name should not be similar to any existing registered company or trademark.
- You can also check for the availability of a domain name for your online presence.
3. Obtain Digital Signature Certificate (DSC)
- A Digital Signature Certificate (DSC) is required for signing the company’s documents online. The Directors of the company must obtain a DSC from a government-approved certifying authority.
- The DSC is needed for filing forms on the MCA portal.
4. Obtain Director Identification Number (DIN)
- Every director of the company must have a Director Identification Number (DIN). This can be obtained through the MCA portal.
- DIN is mandatory for anyone intending to become a director in a company.
- To apply for DIN, you need to submit personal identification documents (like PAN, passport, or Aadhaar).
5. Register the Company with the Ministry of Corporate Affairs (MCA)
The next step is to file for company incorporation with the MCA through the SPICe+ (Simplified Proforma for Incorporating Company Electronically) form, which is an online process.
Steps involved:
- Fill out the SPICe+ form: This includes:
- Part A: Company name reservation.
- Part B: Incorporation of the company (Details like address, directors, and other documents).
- Additional forms related to PAN and TAN (Tax Deduction and Collection Account Number).
- Documents required:
- Identity Proof: PAN card (for Indian directors), passport (for foreign directors).
- Address Proof: Aadhar card, utility bill, or rental agreement.
- Photographs of directors.
- Memorandum of Association (MOA) and Articles of Association (AOA) (detailing the company’s rules and objectives).
- Fee Payment: Pay the required government fees for incorporation, which can vary based on the authorized capital of the company.
Upon successful submission of the form, the MCA will issue a Certificate of Incorporation, officially registering your startup as a legal entity.
6. Get a Permanent Account Number (PAN) and Tax Account Number (TAN)
- After your company is registered, apply for a PAN (Permanent Account Number) and TAN (Tax Deduction and Collection Account Number). Both are required for:
- Filing taxes.
- Deducting tax at source (TDS).
- PAN is mandatory for all businesses, and TAN is required if your business will be deducting TDS.
You can apply for PAN and TAN along with the company registration process via the SPICe+ form.
7. Register for Goods and Services Tax (GST)
- If your business’s turnover exceeds ₹20 lakhs (₹10 lakhs for special category states), you must register for GST(Goods and Services Tax).
- GST registration is mandatory for businesses involved in the sale of goods and services.
- You can apply for GST registration on the GST Portal by providing the necessary documents (e.g., PAN, proof of business, bank account details).
8. Obtain Other Licenses and Permits (If Applicable)
Depending on your business type and location, you may need additional licenses and permits:
- Trade License from the local municipal authority.
- Import Export Code (IEC) if you plan to engage in international trade.
- Shops and Establishment Act Registration (required in most states for business establishments).
- Industry-specific licenses (e.g., food safety license, pollution control license, etc.).
9. Open a Business Bank Account
- Open a business bank account in the name of the company once you receive the Certificate of Incorporation.
- You’ll need your Certificate of Incorporation, PAN card, MOA and AOA, and Address Proof to open the account.
- The company directors should provide their personal identification and address proof.
10. Comply with Other Regulatory Requirements
- Statutory Compliance: Ensure compliance with corporate governance norms, tax filings, and annual reporting to the Ministry of Corporate Affairs.
- Accounting & Bookkeeping: Maintain proper financial records, prepare and file your annual accounts (Balance Sheet, Profit & Loss Account), and hold Annual General Meetings (AGM) as required by law.
11. Startup India Registration (Optional but Beneficial)
- If your startup is innovative and can demonstrate high growth potential, consider applying for the Startup Indiarecognition.
- Benefits of Startup India Registration:
- Tax exemptions.
- Easier access to funding.
- Self-certification for labor and environmental laws.
- The registration process is simple and can be done through the Startup India Portal.
12. Other Considerations
- Intellectual Property: Protect your ideas, logo, products, and technology by filing for patents, trademarks, or copyrights.
- Funding: If you plan to raise capital, ensure you have a sound business plan and may need to approach investors, venture capitalists, or apply for government schemes.
- Insurance: Consider getting appropriate business insurance to cover risks, including liability, property, and employee-related coverage.
Timeline and Costs:
- Timeline: The process of registering a private limited company in India typically takes 7–15 days (depending on the efficiency of the application, availability of documents, and approval time).
- Costs: Registration costs vary based on your business structure and authorized capital. For a private limited company, the cost can range from ₹8,000 to ₹25,000, including government fees, professional fees, and documentation charges.