Guide to Business Registration in India​

Registering a business in India involves several steps, primarily governed by the Ministry of Corporate Affairs (MCA). The process is now largely online, making it more streamlined. Here’s a comprehensive guide:

1. Choose Your Business Structure

This is a crucial first step as it determines legal requirements, liability, and operational flexibility. Common business structures in India include:

• Sole Proprietorship:
  Easiest to set up, owned and managed by one person. The owner and business are not separate legal entities, meaning unlimited personal liability. Ideal for small, low-risk businesses.

• Partnership Firm:
  Two or more individuals share ownership, profits, and responsibilities. Governed by the Indian Partnership Act, 1932. Partners usually have unlimited liability.

• Limited Liability Partnership (LLP):
  Combines features of a partnership and a company. Partners have limited liability and it is a separate legal entity. Suitable for professionals or small businesses looking for flexibility and limited liability.

• One Person Company (OPC):
  Introduced in 2013, it allows a single individual to form a company with limited liability. Provides the benefit of a corporate structure without needing partners.

• Private Limited Company (Pvt Ltd):
  A popular choice for startups and SMEs. It is a separate legal entity with limited liability for shareholders and restrictions on share transfers. Suitable for businesses seeking external funding.

• Public Limited Company:
  Suitable for large-scale businesses looking to raise capital from the public via stock exchanges. Requires a minimum of seven shareholders and three directors.

• Section 8 Company:
  A non-profit organization formed under the Companies Act, 2013 for charitable purposes such as education, healthcare, and environmental protection. Profits cannot be distributed as dividends.

2. Obtain Digital Signature Certificate (DSC)

Since the entire registration process is online, DSC is mandatory for all proposed directors and subscribers of the MoA and AoA. You can get a Class 3 DSC from government-recognized certifying authorities.

3. Obtain Director Identification Number (DIN) / DPIN

Anyone intending to be a director must obtain a unique 8-digit DIN. For LLPs, this is known as DPIN. DINs for up to three directors can be applied for within the SPICe+ form.

4. Name Approval

Choose a unique name that follows MCA guidelines. You can check availability on the MCA portal. Name approval is done via RUN (Reserve Unique Name) or within the SPICe+ form. Approved names are reserved for 20 days.

5. Prepare Incorporation Documents

For Companies:

• Memorandum of Association (MoA):
  Defines company’s objectives, scope, name, office, authorized capital, and liability.

• Articles of Association (AoA):
  Governs internal rules, management, and duties of directors and shareholders.

For LLPs:

• LLP Agreement:
  Defines capital contribution, profit/loss sharing, and terms between partners.

Other Documents:

• ID Proof: PAN (mandatory for Indians), Aadhaar, Passport, Voter ID, or Driving License. Passport is mandatory for foreigners.

• Address Proof: Bank statement (within 3 months) or utility bills (within 2 months). For foreigners, notarized/apostilled documents are needed.

• Registered Office Proof: Recent utility bill in the owner’s name, rent agreement, and NOC if rented. If owned, sale deed or property tax receipt.

• Form DIR-2: Consent by proposed directors.

• Form INC-9: Declaration by subscribers and directors.

• Photographs: Passport-sized photos of directors.

6. File Incorporation Application (SPICe+)

SPICe+ is an integrated online form that allows for:

• Name reservation (Part A)

• Company incorporation (Part B)

• DIN allotment

• PAN and TAN applications

• EPFO & ESIC registration (mandatory from Oct 8, 2020 for new companies)

• Professional Tax registration (only for Maharashtra)

• Company bank account opening (mandatory)

• Optional GST registration

Submit the form with required documents and pay the fee online.

7. Receive Certificate of Incorporation (COI)

Once your application is verified, the Registrar of Companies (RoC) issues the COI, which includes the CIN (Company Identification Number). You’ll receive the COI, PAN, and TAN via email. PAN card is issued separately by the Income Tax Department.

8. Post-Incorporation Compliance

After incorporation, you must comply with ongoing regulations:

• Open a Business Bank Account:
  Using COI, PAN, MoA, AoA, and other supporting documents.

• GST Registration:
  Mandatory if turnover exceeds ₹40L, ₹20L, or ₹10L (depending on state and business type). Some businesses require GST registration regardless of turnover.

• Tax Registrations:
  Apply for TAN (covered under SPICe+).

• Other Licenses & Permits:
  Based on your business type—e.g., FSSAI for food, environmental clearances, labor licenses. Use the National Single Window System (NSWS) to identify and apply for necessary approvals.

• Labor Law Compliance:
  For companies with employees, ensure EPFO & ESIC registration (often done in SPICe+).

• Annual Compliance:
  Maintain financial records, conduct board meetings, and file annual returns with MCA and Income Tax Department.

• Professional Help:
  It’s strongly advised to consult Chartered Accountants, Company Secretaries, or Legal Advisors to ensure proper registration and ongoing compliance.