Starting Up? No it doesn't take months to get a company setup in India
When I first thought of starting a company in India a few months back, there was a feeling of dread. After living in the US for almost a decade I thought, "Man the Government paperwork is going to be excruciating”. Some people said that there would be long delays and a lot of under the table handling.I wanted to register a Pvt. Ltd. company and not an LLP for various reasons, to be explained in another post. I met with my uncle and his business partner, just to bounce off my idea and get some insights. When I explained my other predicament, they recommended their CAs highly. I talked to Mr. R.B. Mahesh on the phone, he was very professional, answered all my initial questions in a straightforward manner, and also gave me a clear idea about the fee structure etc. I learnt that as an entrepreneur one of the things to keep in mind is to always have a good accountant and lawyer. They can help avoid early pitfalls and the money you spend could be worth much more than the headaches you might have to deal with later. Anyways, I went to their offices in Kumara Park without knowing what to expect and met with the company law specialist and others run the consultancy. They explained the entire process and said that the company can be registered in less than a month and have all the paperwork completed in another month. I was skeptical at first, but the next few weeks were an eye opener for me.
First we collected all the paperwork - address proof, ID proof of the founders, the company name search forms etc. We had to get approval for the name of the company. Although it went smoothly, and we got it within a week. Of course, there were certain “out of pocket” expenses involved, something to keep in mind as part of the overall costs. At the same time we applied for the Director Identification Number (DIN) and the Digital Signature Certificates (DSC) for the Directors, which was approved without a hitch. The DSC is great as it enables all the subsequent paperwork submission online. Then came the drafting of Memorandum of Association (MOA) and Articles of Association (AOA) for which I submitted the basic activities that we will be performing as a business and Mr. Prabhu prepared the documents accordingly. We then filled the rest of the paperwork, including Authorized Capital structure for the company and the Initial Share issue. These steps took couple of days and after we submitted, the approval from Registrar of Companies came within a week. So in 20 days flat, we had our very own shiny and newly minted Boost Software Technologies Pvt. Ltd. or as we like to call it, Boost Tech!
Next came the financial paperwork, which involves more acronyms than a corporate Organization structure chart: the PAN, STN, TAN, and etc! The Permanent Account Number or PAN is the first step that took a week including paperwork preparation. I must mention that alongside this, I had started the process of opening a bank account with HDFC bank. Their account executives were very helpful and came to my house multiple times to collect completed forms and get signatures on other documents. They even made a Director “Rubber Stamp” for me which I didn’t know was needed! Since we are a software company, we needed a Service Tax ID and Tax Deduction Allotment Number. Both were applied for and received within 2 weeks while the bank account was created at the same time. Another 20 days, and we had all the tax related paperwork sorted along with a current bank account!
So we had a company registered and functioning within 6 weeks, in half the time that I had originally thought it would take at the very least. The most important thing I learned during this process was that the system will move fast if you have all your ducks in a row. That is, make sure all your paperwork is in order, complete your side of the formalities as quickly as possible and there will be a lot less delays.
You can contact my CA, Mr. R.B. Mahesh at email@example.com for more information on the paperwork etc., and give him my reference!
About the Author
Brijdeep Bhasin, Founder & CEO, Boost Tech, has extensive experience in creation and delivery of web based software solutions. Prior to founding Boost Tech, as a Product Manager at Pramata Corporation and its 2nd employee, he was an integral part of executing the founding team’s vision at enterprise level software implementations for Global 2000 Companies. Brij has a BS in Computer Science from University of Minnesota, Minneapolis with a minor in Business Administration. He can be reached at firstname.lastname@example.org or follow him on Twitter @brijbhasin