Overview

Overview

Registering a company is a fundamental step for any business. It involves creating a legal entity that is recognized by the government, which can be a private limited company, public limited company, partnership, limited liability partnership (LLP), or sole proprietorship. This process includes selecting a unique company name, preparing the necessary documents, and complying with statutory requirements.

Types

Types

1. Private Limited Company: Ideal for small to medium-sized businesses, offering limited liability to its shareholders.
2. Public Limited Company: Suitable for large businesses that intend to raise capital from the public.
3. Partnership Firm: Formed by two or more individuals who share profits and liabilities.
4. Limited Liability Partnership (LLP): Combines the benefits of a partnership and a company with limited liability.
5. Sole Proprietorship: A business owned and managed by a single individual.
6. One Person Company (OPC): Allows a single entrepreneur to operate a corporate entity with limited liability.

Eligibility

Eligibility

• Private Limited Company: Minimum of 2 directors and 2 shareholders, maximum of 200 members.
• Public Limited Company: Minimum of 3 directors and 7 shareholders, no maximum limit on members.
• Partnership Firm: Minimum of 2 partners, maximum as per partnership deed.
• LLP: Minimum of 2 partners, no maximum limit.
• Sole Proprietorship: Single individual.
• OPC: One individual as the sole shareholder and director.

Process

Process

1. Choose Business Structure: Select the appropriate type of company.
2. Name Reservation: Reserve a unique company name through the MCA portal.
3. Prepare Documents: Draft the Memorandum of Association (MoA) and Articles of Association (AoA), along with other required documents.
4. Filing: Submit the incorporation form along with the necessary documents to the Registrar of Companies (ROC).
5. Payment: Pay the registration fees.
6. Approval: Receive the Certificate of Incorporation (CoI) from the ROC.

Required Document

Required Documents

1. Identity Proof: PAN card, passport, or voter ID for all directors and shareholders.
2. Address Proof: Aadhaar card, driving license, or utility bill for all directors and shareholders.
3. Registered Office Proof: Rent agreement or property ownership document along with a utility bill.
4. MoA and AoA: Memorandum and Articles of Association.
5. Photographs: Passport-sized photographs of directors and shareholders.
6. Digital Signature Certificate (DSC): For online document submission.
7. Director Identification Number (DIN): For all directors.

Benifit

Benefits

1. Legal Recognition: Provides a legal identity separate from its owners.
2. Limited Liability: Protects personal assets of the owners from business liabilities.
3. Access to Funding: Makes it easier to raise capital from investors and financial institutions.
4. Credibility and Trust: Enhances business credibility and trust among customers and stakeholders.
5. Perpetual Existence: The company continues to exist even if the owners change.
6. Tax Benefits: Eligible for various tax deductions and benefits.

Compliances

Compliances

• Annual Filing: Submission of annual returns and financial statements to the ROC.
• Statutory Audits: Regular auditing of financial statements by a certified auditor.
• Tax Filings: Filing of income tax returns, GST returns, and other relevant tax documents.
• Board Meetings: Regular board meetings and maintaining minutes of the meetings.
• ROC Filings: Timely filing of various forms and documents with the ROC as required.

Penalties

Penalties

• Late Filing Fees: Penalties for late submission of annual returns and other statutory documents.
• Legal Action: Risk of legal action against the company and its directors for non-compliance.
• Fines: Monetary fines for non-compliance with regulatory requirements.
• Disqualification: Directors may be disqualified from holding office in case of continued non-compliance.
• Company Strike-Off: The company may be struck off the register of companies for prolonged non-compliance.

Common Mistake

Common Mistakes

• Incorrect Documentation: Submitting incomplete or incorrect documents.
• Choosing Wrong Structure: Selecting an inappropriate business structure for your needs.
• Ignoring Compliance: Failing to adhere to ongoing compliance requirements.
• Name Issues: Choosing a company name that is too similar to an existing one.
• Lack of Professional Help: Not seeking professional advice during the registration process.
• Mismanagement of Records: Poor record-keeping and document management.

FAQ

FAQ

Q: What is the minimum capital required to register a company?
A: There is no minimum capital requirement for registering a private limited company, LLP, or OPC. However, it varies for public limited companies based on regulatory norms.

Q: How long does it take to register a company?
A: The registration process typically takes 7-10 working days, provided all documents are in order and there are no discrepancies.

Q: Can a foreign national be a director of an Indian company?
A: Yes, a foreign national can be a director of an Indian company, but at least one director must be a resident of India.

Q: What is the validity of the Certificate of Incorporation?
A: The Certificate of Incorporation is valid indefinitely, provided the company complies with all regulatory requirements.

Q: Can I register my home as the company's registered office?
A: Yes, a residential address can be used as the registered office for the company.

Q: What are the ongoing compliance requirements after registration?
A: Ongoing compliance includes annual filings, tax returns, statutory audits, conducting board meetings, and maintaining records.