Company formation is the process of joining a new company/organization. Online company registration in India can be done for start-up, micro or medium business or non-profit organization. The incorporation of companies is regulated by the Ministry of Corporate Affairs (MCA) of India through the Companies Act, 1956, 2013 and other subsidiary bills, laws and regulations. There are various important services and protections offered by MCA to shareholders in Company Inc. in India. So it is advisable to register a company before starting any business. There are multiple types of company registrations in India with different types of benefits.
Choosing the right structure of online formation for business is very important. Before embarking on any kind of company registration process, one should have a clear vision of the proper structure of company registration.
Company formation in a quick way?
Entering a business in a brick and mortar space can be very painful. India is a country with some corruption and to register the business, one has to grease a lot of palms. It is very convenient to do all this online as the online registration process is transparent.
All the steps one needs to take to register a business in India are as follows:
Enter into the website of the Ministry of Corporate Affairs
To start the process of registering the business online, one needs to go to the Ministry of Corporate Affairs website. On this website, there are two forms you need to identify. DIR3 and DSC are those forms. Complete filling of these two forms, and then one can apply for a DIN online.
When filling out these forms, keep in mind that there are some documents that one will need as they need to be submitted. These documents include address, current occupation, passport and the educational qualifications. One must also send passport size photographs.
One will then need to register for the Digital Signature Certificate, also known as DSC. Without DSC, one will not be able to apply for registration online. For DIN, the applicant need documents to file for DSC. These include passport, address proof, passport size photo, educational qualifications and current professional documents.
Prepare the application for Company formation
Once DIN and DSC are, the applicant should proceed with the rest of the preparations for the application. One should start by filling out the electronic version of Form 1A. This form is related to the company name. Although some people believe it is better to send 6 people, one should send them at least 4 different company name options. Names are approved based on their availability and whether they are appropriate.
RoC may take up to 2 days to give response. Once the name is approved, one must file for company formation with the company within the following 6 months. If waiting is too long, one will need to restart the process.
Draft MoA and AoA
The next step is to make Memorandum of Association (MoA) and Articles of Association (AoA). These are legal documents and can contact a lawyer to file them. The MoA lists the company’s diverse business objectives. AoA lists the day-to-day operations of the organization and the details of the management. Each document must be signed by two members from the organization. The witness must be present when the documents are about to be signed.
When these documents are created, one needs to send them to RoC so they can examin it. It approves the documents RoC, then one has to print them so that one can notarize them. Once that is done, you can file them with the remaining documents needed to register your business.
Once all this is done, you will have to pay the registration fee so that the business can be submitted for company registration. You must register in the state where you work. If all goes well, RoC will give you a Certificate of Incorporation which means your business is registered. As soon as it is done, one can start running your business.
Once the business is registered, there is need to take a few extra steps that are mandatory. One needs to file for GST number. Then, can use a service like RazorPay Invoices to help to create GST-compliant invoices. This way, all the performance of the business will be taken care of.
Merits of Company registration in India
Autonomous Legal Entity: In the eyes of the government, the company is different from the owners, the owners are subject to change. Despite frequent changes in ownership, the company operates under a registered structure. There is no need to fear that the company will run.
Financial Assistance: If a company is registered it can easily get support from financial and banking institutions. If you are registered they will come forward to help or support you financially.
Limited Liabilities of the Company: Unlike the LLP the owners have unlimited liability. In case of any loss in the company, the responsibility of repayment falls on the shoulders of the owner. The company is solely responsible for the losses.
Depending on the structure chosen by the start-ups, the companies there will have tax holidays for the first three years. They have no tax burden as long as they are consistent in their business. Profit from the tax can be used for the growth and development of the company registration.
Financial Assistance: Private Limited Companies can raise funds through their banking institutions after the company is registered. Government agencies can raise publicly in the form of capital shares and deposits. Registering the business is the best way to expand teh business.
Company registration is a simple process of registering a business to conduct business, trade and commerce activities. It is registering the company in the public treasury under the Department of Revenue to show, record and prove that our company is registered. Business registration helps to incorporate the ownership and details of the company. The registration of a business helps in many ways to promote and expand the business. Once the business is registered no one else can start and operate under the same banner.