How Do I Get A Business Registration Certificate In India?by Aanshika Singh Marketing & Bussiness Services
The process of establishing a business can be long and arduous. Huge amounts of time, planning, and effort go into starting a business from scratch, and after months of hard work, the event of getting registered as a legitimate business can feel monumental. But many a time, new business owners are in a dilemma about how to get their businesses registered or even what the purpose of registration is. This article aims to provide answers to all of those queries.
Why does my business require registration?
For starters, registration can prevent legal issues. According to Indian law, every business must register themselves as per the rules prescribed by the Ministry of Corporate Affairs (MCA). Legal obligations aside, undergoing registration enhances the credibility of a business and establishes trustworthiness among customers and suppliers. It also provides growth opportunities and makes a business eligible for tax benefits and business loans.
Therefore, getting registered is an essential step in the establishment of a business. Recent developments have made the registration process extremely convenient. It can be done from within the comfort of one’s house without the hassle of visiting government offices and waiting for weeks. However, before proceeding to the process of registration, it is necessary to understand what type of business an organization falls under.
Types of companies
The Indian Law recognizes seven types of businesses under its jurisdiction, namely:
● Private Limited Company
● Limited Liability Company
● Public Company
● Sole Proprietorship
● One Person Company
● Limited Liability Partnership (LLP)
Which type of company should I register for?
Each type of company indicates a separate purpose and structure, and based on the most applicable option, the registration is to be made. The factors determining this are:
- Number of owners –
An individual making the entire investment for a business should opt for a One Person Company, a company being established by 2–200 members can opt for a private limited company, a company made up of a minimum of 7 shareholders and 3 directors may opt for a public limited company, and businesses made up of at least 2 partners may seek LLP Registration.
- Liability –
Certain businesses such as sole proprietorship and partnership require unlimited liability which dictates that in case of debt, losses will be amended by the members in their profit-sharing ratio. On the other hand, there is a limited liability clause which indicates that the liability of members is dependent on their share value in the case of companies and LLPs.
- Control –
The type of business can be determined by the degree of control. In the case of a sole proprietorship, entrepreneurs have sole control over business whereas, in the case of a partnership, both members have equal control. When it comes to companies, control is shared among elected members.
Several other factors can be taken into consideration while choosing the right type of ownership such as the nature of the activity, the scale of operations, capital requirements, and more, but the aforementioned list is enough to provide a start.
For example, an organization with 15 directors and 2 members may decide to seek private limited company registration in Delhi. The final decision should be made after weighing the pros and cons and analyzing the preferences and requirements of the business owner(s).
Once that decision is made, a business can proceed into the process of registration. Given below is the step-by-step procedure of registration in India.
Step 1: Providing Digital Signature Certificate (DSC)
Every document must be signed with valid digital signatures as per the Information Act 2000 to ensure authenticity.
Step 2: Obtaining Director Identification Number (DIN)
Any individual acquiring a directorial role in a company must acquire a Director Identification Number as per the Companies Act, 2006. This can be done by registering on the MCA website, downloading the given form, and uploading after filling in the necessary details. The company registration form must contain the DIN of the director(s).
Step 3: Registering a New User on the MCA Portal
Once the DIN is acquired, the filled SPICe+ (Simplified Proforma for Incorporating a Company Electronically) form is to be uploaded on the MCA portal. Submitting the form will allow the data and documents to be verified. SPICe+ is beneficial in saving time and cost since it provides an amalgamation of 10 services by 3 Central Govt Ministries & Departments.
Step 4: Applying for Certificate of Incorporation
After submission of the registration application and necessary documents, the documents will undergo an examination process by the Registrar of Companies. Upon approval, the Certificate of Incorporation will be issued and a confirmation email will be sent to the registered email id.
The list of documents required in this process are:
● Proof of identification (Pan Card/Aadhar Card/ Driving License/ Passport)
● Proof of Address (Telephone Bill/ Electricity Bill/ Bank Account Statement)
● Proof of residence in India (Rental agreement of the company’s registered office/NOC of landlord/energy or water bill)
● DIN of the director(s)
● DSC of the director(s)
● Original copy of the ROC’s formal letter about the availability of brand name
Starting a business can be both physically and mentally taxing and new business owners are saturated with responsibilities. In such a situation, availing of the assistance of start-up platforms can be highly beneficial. These platforms help new venturers by undertaking part of the responsibilities.
The Startup Lab is a community of entrepreneurs founded to put start-ups on the path to success. They provide services such as Market Research, Business Development, register a company, Tech Development, and more — all of which can provide great assistance to new business owners, and help turn their goals into success.
Created on Sep 20th 2021 01:08. Viewed 554 times.