How important a Company registration for a new venture?

A company is a business entity that manufactures, buys, or sells goods or services in exchange for money. Simply put, the way a company does business. Readers need to think carefully about your business setup and most importantly decide what kind of business structure or vehicle to adopt. Vehicle selection will help you achieve most of your entrepreneurial dreams. Mostly, it depends on your expansion plans, future team size, funding requirements and business vision. Company incorporation means gaining the right to do business legally. In India, the registration of a company is also known as business establishment or merger of a company.

Benefits of company registration

Company registration and its importance for a new venture
  • Company registration will create better image and credibility in the market. This will help the company to raise funds and enables to get the loan from the bank.
  • Registration is a serious business, so that it implies that business in the form of structure of the company can attract more people.
  • Company registration gives the best protection in the form of limited liability; so that the personal assets cannot be touched.
  • The employees have the reputation and can boast that they have an employment in the company concerned. So that there will have an increase in the manpower.
  • The documentation process cost is less.
  • Hence there is easier way for the exit or they can sell business.

Start-up/New venture

Start-up is a term used to enhance the business environment very beautifully in today’s era. It is a term or scheme used under DPIIT, which is an initiative of our Government of India in consonant with Make in India Concept, to assist and support entrepreneurs and create worldwide opportunity through start-up portal. This portal benefits us in many ways that we need to fill out an application online for the company formation so that the start-up can take advantage of the benefits and services provided by the government to do business. The scheme aims to promote unique and innovative start-ups in the country.

Pre-requisite for the start-up recognition

Company registration and its importance for a new venture
  1. First and foremost requirement is the start-up should not be older than ten years from the date of incorporation.
  2. The start-up should be private limited company or LLP
  3. For any financial years, the turnover should not be increased Rs. 100 crores.
  4. In the formation of the entity (ie) during company registration there should not be any reconstruction.
  5. There is no need to have trademark registration. But already filled trademark will increase the chances of approval of the application from the department.
  6. Website is important for an applicant before going for the application filing. The applicant should not have account in free email service like gmail. The applicant should create his or her website and mail id with the name of his or her domain.

Benefits of the (start-up) Company registration

There is tax exemption on the investment and the capital gain above the fair market value. From the earnest money deposit there can be exemption. For the 3 consecutive years, there can be an exemption from the income tax. There are many availabilities of the fund. Also there is reduction of fees. The money as well as time can be saved.

Documents required for the company registration in new venture

Company registration and its importance for a new venture

URL link of the website of the entity, if there are any mobile apps developed then the link of the mobile app is important. In case of Micro-Small Medium enterprise, then MSME registration number is needed. For company formation if any of the intellectual property is involved like trademark, patent or logo or design then IPR filing number is needed. Only the professional cost should be involved. 

DPIIT Certificate of Recognition is issued to start-ups or new venture after a thorough examination of the department documents and details. If the application is found to be incomplete as per the department, the applicant should amend the same application and submit it to the department. This section only offers three opportunities for editing in the new venture portal. If the requirements are not met, the department will reject the application. Editing cannot be done further after the application is rejected and the applicant can file a new application only after the completion of 3 months from the date of rejection of the application by the department.

Change in names and the objectives

Company registration and its importance for a new venture

If there is any need to change the name and the objectives, you need to make some amendments in the Memorandum of Association. 

Undertake on New Ventures: One of the main reasons companies update or change their goals is to switch to new ventures and sectors. A business goal, when defined in the MoA, limits the business scope of an organization. Sometimes, as companies grow, they need to enter other support sectors to stay competitive. Therefore, products and services are expanded due to the vertical and horizontal expansion of the organization and, therefore, the activities undertaken by the organization. When starting a company, directors may not specify these services and products at the time of merger. Therefore, before engaging in such activities, the company should make necessary changes in its objectives and business activities.

Company Takeover:

When one company is taken over by another company, management undergoes a major upheaval. The new company may want to retain the name, logo and other branding agents to invest in the built-in market value, but may want to take the business in a different direction. In such cases, the goods of the purchased company may not meet the views or requirements of the new management. Therefore, they need an update to make the business grow and expand further. These changes can be made after or before the takeover as per the terms discussed during the negotiations.


In company registration has an obligation to register under the legal consent of the country. Furthermore, this step indicates the legal existence of this establishment. Therefore, it helps to stand out as a legal entity among the evaders in this over-populated country. In addition, before running a business in the market, one should think carefully about the type and structure of the unit. Therefore, it is important to understand the types of entities currently operating in the country

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