Process of Registering a Company in India
With a population of a whopping billion and around 20 thousand businesses being registered every month including Private Limited’s, Limited Liability Partnerships, One Person Companies, Normal Partnership Firms or even Sole proprietorships in the form of Goods and Services Tax Registrations our Government has been trying various thing to bring the startup chaos to calm by relaxing various hardships and addressing various issues. In recent years the process of registration of business has become easy and friendly bringing India’s EODB (Ease of Doing Business) Score to 63 an increase of 3.5% as compared to last year.
According to The World Bank Data, it now takes an average of 18 men days to register a Private Limited Company (Which is considered as a standard entity to start a business) in India. In this article, I will try to explain in detail the process of registering a Private Limited Company to give you an overview of procedures are involved and where you can save some time and get your company registered in less than 10 days.
So before I go on explaining the steps involved in registering a Private Limited Company, I would like to explain to you why you should go for a Private Limited Company. So, a Private Limited Company, unlike a Partnership, gives your Business a separate Legal identity which is different from its members which means the Company for all legal purposes will be treated as a distinct person and it can hold its own assets and liabilities, so the coming and going of members will not affect the longevity of the company. Also, the Liability clause is capped to the unpaid value of shares held by the members. Features like these make Private Limited Company a businessman’s most preferred form of business registration, to begin with.
So let’s start with the steps involved in registering a Private Limited Company:
Step 1: Reserve Company Name
Ministry has introduced something called RUN (Reserve Unique Name) which allows an applicant to apply for a company name and get it reserved in just a day.
Tip: To avoid unnecessary resubmissions or rejections please research the name availability and legalities involved in choosing a proper name for your company. We recommend you go through our detailed article about how to choose a name for your company to avoid mistakes while applying your name.
Time Taken: 2 Working Days
Step 2: Apply for Class ii Digital Signature
To file for a Private Limited Registration the members and directors need to have a Class ii Digital Signature to eSign the forms. You can get your Digital signatures from certified vendors such as VSign, eMudhra, etc.
Time Taken: 1 Working Days
Step 3: Drafting Incorporation Documents
There are various documents such as Directors Declaration, Directors Affidavits, No Objection Certificates, Memorandum Of Association & Article Of Association which is required to be drafted to file for incorporation.
Time Taken: 2 Working days
Step 4: Applying for Incorporation
Assuming your Name got approved, you can instantly apply for registration once your documents are ready. Since the incorporation forms have now been changed to integrated forms called SPICe32 which integrates Incorporation, PAN Application, TAN Application and GST Application in the same form. So depending on your requirement if you want GST registration with your company you can opt for the same or get it registered at a later point of time.
Time Taken: 1 Working Days
Step 5: Getting Certificate Of Registration
The eForms are processed in fast track mode by a central team. On approved a Certificate Of Incorporation will be issued by the Registrar and vola your Company is now Legal.
Time Take: 2 Working Days
You can also choose not to preapprove your company name and apply for the name in the integrated SPICe32 form itself but we recommend you preapprove the name for saving time on resubmissions related to name in incorporation stage. The trick is to keep your self-prepared with your proposed company names, brief of business objectives, proper capital and directorship structure of your company, other information, and documents before approaching for registration. Once things are proper the procedural part should not take more than ten working days on an average.
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