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A Complete Guide: How to Register a Company in India?

Read the complete guide about how to register a company in India. The most complicated business structure in our country is part of the company set up. India has drastically improved its rankings in the global ease of doing business index.

A Complete Guide: How to Register a Company in India?

Saturday May 30, 2020,

5 min Read

The most complicated business structure in our country is the part of the company set up. India has drastically improved its rankings in the global ease of doing business index. Progressive reforms in the field of commerce and industry have made it possible. Consequently, the company incorporation process has been largely simplified and digitized in recent years. 

The Ministry of Corporate Affairs (MCA) has rolled out the e-form INC-29 for the simplified incorporation of companies. This form acts as a single-window clearance when it comes to the incorporation of a company. 

Following are the steps to register a company in India using e-form INC-29:

Digital Signature Certificate (DSC):

A DSC is mandatory for at least one of the directors of the company. This is a legal requirement as per the Information Technology Act, 2000. Without a DSC, it is impossible to initiate any kind of online paperwork. 

A DSC can be obtained from the MCA itself. There are certain documents you need to furnish for the same. These include PAN details, proof of identity, and proof of address. After payment of the prescribed fee, you will receive your DSC within a couple of days.

Director Identification Number (DIN):

All the directors of the company must acquire a DIN. However, any one of the directors must get a DIN for company incorporation purposes. It is a unique 8 digit number issued under the Companies Act, 2013. A director is required to quote their DIN when filing the necessary incorporation documents.

A DIN-1 form is used to obtain the DIN. This form is available online on the website of the MCA. Personal details and proofs of birth, identity, and address are attached to the application form. DIN approval is a completely digital process. It takes less than a day to get your DIN approval done. 

Registration on the MCA Portal:

After obtaining your DIN and DSC, you can now begin the incorporation process. For this, you need to create a new user profile on the MCA portal. The e-form INC-29 can be obtained only after you have an account on this portal. All guidelines related to form filing are also available on this portal.

Filing the Charter and Articles of the Company:

The Memorandum of Association (MoA) is perhaps the most important document of a company. The Memorandum of a company outlines the scope of its powers and actions. Any acts outside of the MoA invite legal action against the company. All companies draft their own memoranda of association. The MoA of a company can be amended. However, it is a very complex process. 

The Articles of Association (AoA) are the interpretation of the MoA. The articles contain details regarding the organizational structure and other company policies. A company can draft its Articles if it wishes to. Although, model Articles are available in the Companies Act, which can be adopted as per the company's choice. It is relatively easier to amend the Articles of the company.

Both the MoA and AoA are crucial documents for incorporation. Without them, a company cannot exist.

Company Name:

The name of a company differentiates it from its competitors. Therefore, it has to be something unique and easy to remember. However, it must also abide by the legal guidelines laid down by the Companies Act, 2013. These guidelines levy certain restrictions on the company name. For instance, the name should not endorse any foreign government or embassy. The name should also not be similar to any LLP business.

A single-use web service called Reserve Unique Name (RUN) has been initiated by the MCA. Any similarity between the names of two companies leads to a rejection of the current name. The application needs to be re-filed in case of rejection, after paying the prescribed fee.

Registration of Other Details:

Your company cannot be registered without a definite name and address. Once your company name is approved, you can move ahead. The other details that need to be registered include:

  1. Name & address of the company
  2. Names & addresses of the directors
  3. Names & addresses of the Promoters
  4. Details about the company’s bankers, lawyers, underwriters, etc.
  5. Details about the company’s managers and secretary.

Form-18 is used for the details of the company and its directors. Form-32 is used for the manager and secretary details. The registration of the company is complete after scrutiny of the furnished form and documents.

PAN and TAN:

Both individuals and organizations must have a Permanent Account Number (PAN). Tax Account Number (TAN) is necessary for companies. These details are used for keeping a record of the tax liabilities of the assessee. This could bring tax evasion charges to your company set up in India has stringent criminal laws for the same. Therefore, obtain your company’s PAN and TAN as soon as the incorporation is approved.

Registering a company can be complicating. Thus it is advised you get a hold of professionals that can guide you and avoid wasting your time and valuable resources as an entrepreneur.