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Company Registration in India
Company Registration in India is a process that involves obtaining a legal identity for your business by registering it with the Ministry of Corporate Affairs. The process in India includes choosing a suitable business structure, obtaining Director Identification Number (DIN) for directors, obtaining a Digital Signature Certificate (DSC), and finally, filing the incorporation documents with the Registrar of Companies (ROC). The complete process of Company Registration can be completed in approximately 10-15 working days, provided all necessary documents are in order and the application is error-free. In India, Company Registration is mandatory for starting a business and it offers several benefits such as a separate legal identity, limited liability, and easier access to finance.
Documents Required For company registration
The following documents are required for Director during the process of Company Registration in India:
1 PAN Card
2 Proof of identity (Passport/Aadhaar/Voter ID)
3 Proof of residence (Bank statement/Electricity bill/Aadhaar)
4 Passport-sized photographs
In addition to the above, foreign nationals need to provide additional documents like a passport, visa, and proof of stay in India. It's advisable to check the latest requirements with the Registrar of Companies (ROC) as the documents required may change from time to time.
Benefits of company registration
1 Separate Legal Entity: A registered company has a separate legal identity from its owners, which protects its personal assets.
2 Limited Liability: The liability of owners in a registered company is limited to the extent of their share capital, reducing personal financial risk.
3 Easier Access to Finance: Banks and financial institutions are more willing to lend to registered companies as compared to unregistered businesses.
4 Improved Credibility: A registered company has greater credibility and is taken more seriously by customers, suppliers, and other stakeholders.
5 Perpetual Existence: A registered company continues to exist even if its owners change, making it easier to transfer ownership or raise capital.
6 Nationwide Operations: A registered company can operate and have a presence in any part of India, subject to compliance with local laws.
7 Compliance: A registered company is required to comply with various laws and regulations, which helps to maintain transparency and accountability.
Process of Company Registration in India
1 Choosing a unique company name
The company name should be unique and not similar or identical to an existing company. You can check the availability of the name by searching the MCA (Ministry of Corporate Affairs) database.
2 DIN (Director Identification Number)
DIN is a unique identification number assigned to each director of a company by the MCA. It is mandatory for every individual who intends to be a director of a company in India.
3 DSC (Digital Signature Certificate)
A digital signature certificate is an electronic document used to secure the authenticity and integrity of digital messages. It is used to digitally sign the e-forms filed with the MCA.
4 Incorporation Form filing
Incorporation Form is a set of documents that must be filed with the Registrar of Companies (ROC) to incorporate a company in India. The form includes details of the company, its directors, shareholders, and registered office.
5 PAN and TAN
PAN (Permanent Account Number) is a 10-digit unique identifier assigned to entities, including companies, by the Income Tax Department. TAN (Tax Deduction and Collection Account Number) is a 10-digit number assigned to entities responsible for deducting or collecting tax on behalf of the government.
6 Licenses and Permits
Depending on the nature of the business, a company may require various licenses and permits from government authorities.
7 EPFO and ESIC registration
EPFO (Employees' Provident Fund Organization) and ESIC (Employees' State Insurance Corporation) are government organizations that provide social security benefits to employees in India. A company must register with these organizations if it employs more than 20 workers.
Commencement of Business Operations: Once all the necessary registration and compliance requirements have been fulfilled, a company can commence its business operations.
Is GST Registration Compulsory after Company Registration
Yes, GST registration is compulsory for companies in India after they have completed the company registration process. GST (Goods and Services Tax) is a tax on the supply of goods and services in India, any business whose turnover exceeds the prescribed limit must register for GST. Failing to register for GST can result in penalties and legal consequences. Once a company has registered for GST,
Bank Account for company registration
A bank account is an essential part of a company's financial management and is necessary for carrying out various financial transactions such as accepting payments, making payments, and managing cash flow. In India, a company must open a bank account in its name after the company registration process is complete. This bank account will be used for all the financial transactions of the company. To open a bank account, the company must provide various documents such as the incorporation certificate, PAN card, TAN card, and GST registration certificate. The company must also appoint authorized signatories who will be responsible for managing the bank account on behalf of the company.
Mandatory Compliances for Private Limited company
Private limited companies in India are subject to various mandatory compliances under the Companies Act, 2013 and other relevant laws. The main compliances are:
Statutory filings and filings to Registrar of Companies (ROC): Companies are required to file various forms with the ROC on an annual basis, such as the Annual Return, Financial Statements, and Director's Report.
Holding Board Meetings and Annual General Meetings (AGMs): Companies must hold at least four board meetings and one AGM each financial year to discuss and approve the company's financial statements and other important matters.
Maintenance of Books of Account: Companies must maintain accurate and complete books of account, including cash books, ledger books, and journal books.