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4 Steps to Register your Startup in India

Registering your company is what will finally give your startup a legal existence. Before registering it can be a sole proprietorship or a partnership but once you take the decision to register, your company takes a life of its own and can be closed only by legal intervention. Registering a Company is a long and tedious procedure though, which will be quite heavy on both your pocket and on your time, if you want to do it all yourself. But none the less becoming an owner of a registered company brings its own advantages and very less disadvantages to you.

4 Reasons why you should register your company

1. Protection

You may be very excited about your business plan and invest all that you have and take some more from friend and family and try to crystallize your Idea. But imagine a case if some unusual stuff happens, any accident, anybody sued your company or a financial loss happens, not only you, but your family also will be in a very bad situation. There are many other reasons, but to protect yourself and your family this is the most important one.

2.  Product/Service

Do you sell a Product/Service, imagine a case your Product /Service caused any harm to anybody, or your customer or you partner caused a harm which you are not responsible but will be held responsible for. Your company goes bankrupt in lawsuits and due payments. Its always better to safe gaurd your company by registering it.

3. Raising money?

If you grow above your friends and family support, you may need private equity or a venture capitalist, who will make sure that they give money only to the registered companies most of the times. All investors will look at protection of an incorporation and an exit strategy.

4.  Legacy

Existence of the company continues, no matter which director or member comes and goes. The company is closed only when by complying with the provisions of Law. Also when you want to transfer the entire shareholding to another person, it’s actually a very easy process and the easy change in management and ownership which will save the time and money (stamp duty) of promoters.

Rules of Private limited company

register your private limited company

  • Minimum two directors and two shareholders are required.
  • Shareholders/directors cannot transfer their shares as per the articles of association.
  • Maximum number of shareholders is limited to fifty.
  • General public cannot buy shares or debentures of a private limited company
  • Deposits is allowed only from the members and directors (or their relatives is allowed)

How to get your company Registered

If you can take out some time from building your business and want to save some money by getting the Company registration done yourself, then i will show you in very simple steps on how to go about it.

An Update – Ministry of Corporate Affairs (MCA) has introduced a new form INC-29 through which a new company can now be incorporated. The newly introduced form known as Integrated Incorporation Form INC-29 will combine the procedure for getting Director Identification Number (DIN), Name Approval Application and Incorporation Application into a single step.

Detailed process on incorporating the company using INC29 by Vakilsearch

Now a days we like to get everything done on internet, good news is that you can do 70% of the registration work on internet itself and some offline work is also involved. There are two important government website which makes your life a bit easier in getting some things done from comfort of your home. So lets list the thing which can be done online first.

Online and offline Work to be done for Registration

Step 1 : Apply for DIN (Director Identification Number) and DSC (Digital Signature Certificate)

 For More detailed explanation on how to apply for the same read this article – APPLY for DIN in 4 easy steps

Step 2 : Get Company name approved and get certificate of Incorporation

You have to file basically 4 types of forms to get these two work done. first apply for company name on FORM 1A and wait for the company name approval from ROC(Registrar of Company) and then apply for certificate of Incorporation by filing FORM 1, FORM 18 and FORM 32.

Offline Step 3 to complete Step 2 :

Scanned copies of the following has to be attached with the FORM 1 to get the Certificate of Incorporation mentioned above.
  • Copy of Form 32 along with consent letters of Directors of the Company
  • Signed and stamped copies of the Memorandum of Association(MoA) ( 200)
  • Signed and stamped copies of the Articles of Association(AoA) ( 1000- 4000)
  • Power of Attorney from subscribers on judicial stamp paper of     100
  • Identification of subscribers
  • must be attached to Form 1 mentioned above.
Memorandum of Association(MoA) – This documents should contain how much capital you want to raise by issuing shares and what for that capital will be used for present and future purposes.
Articles of Association(AoA) – This defines the internal clauses and functioning of the company.
Once these to are prepared they are sent for verification to the registrar and then they are stamped(stamp duty varies) and signed and sent to the concerened registrar office.

Step 4 : Apply for PAN(Permanent Account Number) and TAN(Tax Account Number) for your registered company.

For More detailed explanation on how to apply for the same read this article – APPLY for TAN in 4 easy steps
This whole process may take 30-40 days, there are other formalities to be completed like getting a rubber stamp for your company, register for VAT and professional Tax, Employees provident fund and medical insurance etc. But unlike Public Limited Company you can start your operations once you get the Certificate of Registration and finish rest of the work simultaneously.
Hope i have made the process more simple and understandable, incase you have more doubts you can ask in the comments and we will try to solve it for you in a freakingly simple way! 🙂
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22 comments

  1. Greate article. Keep posting such kind of information on
    your site. Im really impressed by your blog.

    Thanks for sharing your thoughts about Private limited company registration. Regards

  2. Thank you .. Sir!

  3. Thank you sir, Looking forward to articles on the periodic compliance filings to be undertaken for every startup ie monthly, quarterly, yearly. For example tax filings, payroll, etc

  4. Many thanks…this is very helpful…!!

  5. Hi everyone,
    I’m planning to start a separate venture and I wish to use the land property which is owned by my father who’s already running a company. Is there any rule to compulsorily pay some rent for this property even though it belongs to my father? And should I need to enter into any rental agreement with them which would be required for company’s registration and all?
    FYI: My father will become one of the directors for my new venture.. Kindly clarify on this. Thanks in advance…

  6. Hi, Thanks for the article. Could you also please through some light on NRIs starting a company in India with the details like can NRIs alone be the shareholders and appoint an director who is in india to run it? and what are the ways for NRIs to start a company and Is there any limit for NRIs to invest in a company something like 10% of total shareholdings? (As per the new amendments in companies act). Thank You in advance!!

  7. Great Article, You have described process for registering a new company in a very good way.