How To Register a Company
- Nimisha Panda
- 3 days ago
- 12 min read
In order to register a company in India in 2025, you must choose the best business structure for your needs, such as an LLP, OPC, or PLC, and comprehend the legal standards set by the Companies Act of 2013. Every kind has its own set of guidelines, tax advantages, and requirements. From obtaining a digital signature and selecting a company name to identifying the necessary paperwork, such as the MOA and AOA, this guide simplifies the process of registering a business in India. It is intended to assist you in completing the registration process with ease, making sure you have all the necessary paperwork on hand and are aware of what is required to properly launch your firm following registration.
Table of Content
Different Business Structures in India
Grasping the appropriate business structure for your venture is a crucial step before moving on to the process of registering a company in India. Here’s a concise summary of different business entities in India:
Limited Liability Partnership (LLP): An LLP functions as an autonomous legal entity where the partners' liabilities are limited to their respective investments in the business. This structure combines the advantages of a partnership's flexibility with the benefits of limited liability found in corporations.
Private Limited Company (PLC): A PLC is acknowledged as a separate legal entity, distinguishing its identity from its founders, directors, and shareholders. In this arrangement, all parties involved are deemed employees of the company, offering a structured governance system for businesses within this category.
One-Person Company (OPC): An OPC, which was created to make things easier for individual business owners, enables one promoter to run a corporation and benefit from limited liability and laxer compliance standards.
Public Limited Company (PLC): A PLC functions with limited liability, which means that the shareholders' financial responsibility is capped at the value of their shares. This is distinguished by the PLC's ability to offer shares to the general public. Businesses wishing to increase their capital through public investment without subjecting shareholders to undue obligation may find this structure ideal.
The following table shares a snapshot of the features of each type of company structure:
Company type | Ideal for | Tax benefits | Legal compliances |
Limited Liability Partnership | Service-oriented businesses or businesses with low investment needs | Tax holiday for first 3 years under Startup India Benefit on depreciation | Business tax returns and ROC returns to be filed |
One Person Company | Sole owners looking to limit their liability | Tax holiday for first 3 years under Startup India Higher benefits on depreciation No tax on dividend distribution | Business tax returns and ROC returns to be filed |
Private Limited Company | Businesses with a high turnover | Tax holiday for first 3 years under Startup India Higher benefits on depreciation | Business tax returns to be filed ROC returns to be filed Mandatory audit to be done |
Public Limited Company | Businesses with a high turnover | Tax holiday for first 3 years under Startup India | Business tax returns to be filed ROC returns to be filed Mandatory audit to be done |
Importance of Choosing the Right Business Structure
Because your income tax returns will depend on your business structure, choosing it carefully is essential. When registering your business, keep in mind that every business structure has varying compliance requirements that must be fulfilled. For example, just an income tax return needs to be filed by a sole proprietor. However, a company is required to file an income tax return with the Registrar of Companies in addition to its annual filings.
Every year, a company's financial records must be audited. Complying with these legal regulations necessitates investing in auditors, accountants, and tax filing professionals. Consequently, choosing the appropriate business structure is crucial when considering company registration. An entrepreneur needs to have a comprehensive awareness of the types of legal duties he/she is prepared to manage.
Investors will always favour a recognised and lawful corporate structure, even though some are more investor-friendly than others. An investor might be hesitant to provide funds to a sole proprietor, for instance. On the other side, if a solid company idea is backed by a recognised legal structure (such LLP, Company, etc) the investors will be more comfortable making an investment.
Benefits of Company Registration in India
There are numerous benefits to registering a business. A licensed business adds legitimacy and authenticity to the enterprise.
Protects against various dangers and losses, as well as against personal obligations.
Fosters goodwill and encourages the attraction of more customers.
Provides easy access to good investments and bank credits for trustworthy investors.
Covers the need to safeguard the company's resources.
Greater stability and a stronger dedication to wealth.
Enhances the capacity to grow in the long run
Tax Advantage of Registering a Company in India
Many tax benefits that have been put in place to entice business owners and foreign investment to India can be obtained by registering a company there. Among these benefits are:
Lower tax rates: If they fulfill specific requirements, new manufacturing businesses may be eligible for lower corporation tax rates.
Tax holidays: For a set amount of time, businesses that operate in Special Economic Zones (SEZs) or in particular industries, including infrastructure, may be excused from paying taxes.
Tax deductions and exemptions: Companies are able to deduct costs related to capital expenditures, R&D, and asset depreciation.
Startup incentives: Under the Startup India program, recognized startups are eligible to obtain tax breaks on profits for three years in a row during the first 10 years of business.
DTAAs: With the help of double taxation avoidance agreements (DTAAs), which India has with a number of nations, businesses can avoid paying taxes twice on the same income.
Requirements to Register a Company in India
In order to register a company under the Companies Act, the following fundamental requirements must be carefully followed:
Shareholders
A private limited company must have at least two shareholders, while a public limited company must have at least seven. For an individual personal company (OPC), one shareholder is sufficient. Shareholders may be individuals or other companies, and neither private nor public limited companies have restrictions on their nationality or residency; however, the sole shareholder of an OPC must be an Indian citizen. In order to commit to the company's Memorandum of Association (MoA), each shareholder must agree to purchase a certain number of shares, signifying their financial stake in the business.
Directors
In terms of a company's legal structure and governance, directors are essential. Depending on the kind of company being registered, different requirements apply to directors:
A private limited company must have a minimum of two directors.
Public Limited Company: Three directors are required at the very least.
It is possible to form a One-Person Company (OPC) with just one director.
Without regard to residency or nationality, directors must be at least eighteen years old. Nonetheless, each director needs to obtain a Director Identification Number (DIN), which is a special identification number provided by the Ministry of Corporate Affairs (MCA). At least one director should fulfil the residency requirement. This means having stayed in India for a minimum of 182 days in the preceding calendar year.
Company Name
A crucial step in the registration process, choosing a name for your business is regulated by specific guidelines under the Companies Act.
The name chosen must be unique and not similar to other company names or trademarks, making it stand out and preventing disputes.
It must also not violate the Emblems and Names (Prevention of Improper Use) Act, 1950, which protects against the misuse of national symbols and emblems.
It must accurately reflect the nature of the business, clearly stating what the company does; and, depending on the registered type, it should end with "Private Limited" or "Limited" for public companies, indicating the legal structure of the company.
Registered Office
To make incorporation easier, each business must set up a registered office in India. The firm may initially utilize a temporary postal address for the incorporation process if a permanent location is not available, provided that a permanent address is announced within 30 days of formation. All official correspondence and legal notices must go through this registered office. This office has to be set up to efficiently receive and respond to such communications. Additionally, the premises must be secure and lockable because it serves as the main site for the company's official documents and accounting. In order to verify its occupancy and operational preparedness, the business must provide proof of negotiation's location during the registration process. This is usually done in the form of a recent utility bill issued in its name.
Capital Requirement
There is no set minimum capital requirement for businesses under the Companies Act. However, before registering the firm, shareholders need to clarify a number of capital-related issues. Setting the authorized capital, or the most money the business can raise through the issuance of shares, is part of this. Additionally, shareholders must decide on the subscribed share capital, which indicates the actual capital they invested by purchasing company shares deposited by them.
Documents Needed to Register a Company
Depending on the business structure and whether you are a local or foreign director, different paperwork may be required to register a company in India. However, generally speaking, be ready to present the MCA and ROC with the following documents:
Documents for partners, shareholders, and directors:
Evidence of identity, such as a driver's license, passport, Aadhar card, or PAN card
Proof of address for each director and partner, such as a recent utility bill or bank account statement.
Each director’s or partner’s Director Identification Number (DIN) and Digital Signature Certificate (DSC)
Documents for the Company:
Resident address proof such as rental agreement, NOC letter from a landlord, or sale deed for an office in the name of the company
Memorandum of Association (MoA), which covers the company’s goals and the members' liability.
The company's operating bylaws are outlined in the Articles of Association (AoA).
Steps to Register a Company in India
The following steps are to be followed to register a company in India:
Step 1: Get a Digital Signature Certificate
Digital signatures are required in order to submit the forms on the MCA site because the company's registration process is totally online. The DSC must be filled out by all prospective directors and subscribers to the articles of association (AoA) and memorandum of association (MoA). Government-approved certifying organizations offer DSC. The list of these certified authorities can be found here. Additionally, DSC can be accessed online via this link in two days. Obtaining the Class 3 level of DSC is mandatory for the directors and subscribers of the MoA and AoA.
Step 2: Obtain DIN
Anyone who wishes to serve as a director of a corporation must receive the Director identity Number (DIN), which serves as an identity number for directors. Each prospective director's DIN, together with proof of name and address, must be included on the company registration form. Through the online company registration form SPICe+, DINs for a maximum of three directors can be acquired. If there are more than three directors and they do not have a DIN, the company has to be registered with just three of them. However, new directors may be appointed after creation.
Step 3: Register on the MCA Portal
The SPICe+ form must be completed and submitted via the MCA site in order to apply for company registration. The company's director must register on the MCA portal in order to complete the SPICe+ form and submit supporting documentation. The director can access the MCA portal services, such as completing electronic forms and accessing public documents, by logging in after registering. The business must additionally submit two suggested names in Part-A of the SPICe+ form in order to reserve its name.
Step 4: Get the Certificate of Incorporation
The Registrar of Companies will review the registration application after it has been completed and submitted with the necessary paperwork. He will issue the company's Certificate of Incorporation after checking the application. A PAN and TAN are also assigned to the Certificate of Incorporation, and these are shared with an email.
Post-Registration Compliance
Following registration, the business must adhere to specific compliances every year. The business must adhere to certain regulations, such as the requirement that it designate its first auditor at the first board meeting within 30 days of establishment. Every business is required to hold at least four board meetings at predetermined times throughout the year. Every fiscal year, it must submit its balance sheet, annual return, and profit and loss account. Additionally, an auditor's report should be given to the Registrar of Companies by the deadline.
Cost of Registering a Company in India
Here are the costs of registering various types of companies in India:
One Person Company– Rs.7,000 – 10,000
LLP – Rs.7,000 – 15,000
Private Limited Company– Rs.6,000 – 30,000
Public Limited Company– Rs.6,000 – 30,000
These are approximate costs that may vary depending on the authorised capital, number of directors, stamp duty, and professional fees.
Conclusion
It's crucial to follow the rules outlined in the 2013 Companies Act, choose a suitable business structure, and complete the online registration processes using the SPICe system in order to register your company in India. This entails submitting important documents like the MOA and AOA, choosing a distinctive company name, and obtaining a digital signature. You will receive a Certificate of Incorporation once you have submitted the required documentation, information about the directors, and the address of the office. Even if the procedure may appear intricate, it can be made simpler by comprehending each stage and assembling the necessary paperwork, which will ensure a seamless registration and position your business for future success.
FAQ
Q1. Why register a company in India?
Establishing a local business corporation is frequently your only choice if you wish to hire and pay staff in a foreign nation without depending on a third-party service provider like an employer of record (EOR). Establishing a local entity in India can be a smart move because it allows you complete control over your company's operations, compliance, and brand representation in the Indian market. It also enables you to benefit from local tax incentives and cultivate connections with other local companies.
Q2. Where can I register my company?
You must apply to the Ministry of Corporate Affairs (MCA) if you want to create a new company in India. You can also apply remotely online through the MCA portal. Among other things, a Director Identity Number (DIN) and Digital Signature Certificate (DSC) are required for registration.
Q3. Is the company registration process completely online in India?
Indeed, the entire company registration process is done online. The MCA portal is the only way to register a corporation or limited liability partnership. The Central Registration Centre (CRC), which serves as a specialized back office for the Company and LLP Registration procedure, receives the scanned copies of the company's or LLP's paperwork via mail and processes them. The company/LLP receives a digitally signed Certificate of Incorporation upon completion of registration, which all parties involved can confirm on the MCA website.
Q4. What happens if my company name is already taken?
To find out if your company name is already registered, you must consult the Ministry of Corporate Affairs' (MCA) database of registered company names. You will need to select a different name if the company name is listed in the company registration directory. You will need to submit a new application for a different, previously unregistered name if you have already submitted one.
Q5. How many days does it take to register a company?
The MCA's recent modifications have simplified the process of registering businesses of all kinds with the government. Formally registering your business can take ten to fifteen days, assuming you have all the necessary paperwork.
Q6. Can a foreign national be a director of a company?
A foreign individual may serve as a director of a business that is registered in India in accordance with Indian company law. He must, however, meet every requirement outlined in the Act. The assignment of a Director Identification Number (DIN) is the most crucial. Anybody appointed as a director, including foreign nationals, is not permitted to function in such role until they expressly give written consent. Form DIR-2 must be filed within 30 days of being named director in order to do this.
Q7. Is the physical presence of a personal mandatory for company registration?
You don't need to be in person at any location to register because the entire process is done online. The documents must be sent in via mail as a scanned copy. The MCA gives them the certificate of company incorporation at the business address.
Q8. How do I verify if my company is registered or not?
On the MCA website, you can verify the firm registration status. You must choose "View Company/LLP Master Data" from the drop-down menu under the "MCA Services" page in order to view the status of your business. After that, click "Submit" after entering the company's CIN. The precise state of your business will be shown.
Q9. Does a private limited company have a continuous existence?
A private limited company has an ongoing life due to its perpetual succession. A corporation that has perpetual succession will remain a legal existence even when the founder, promoter, or any of its directors pass away. A company will therefore continue to exist until it is dissolved for the purposes specified in the Companies Act of 2013 or until the Board and shareholders decide to wind it up or close it.
Q10. Can a private limited company director be a salaried person?
A director of a private limited corporation does not get compensation directly. Nonetheless, the Companies Act of 2013 stipulates that the firm may compensate its directors. Any payment made to the director in exchange for his services is referred to as remuneration. As a result, a director's salary will be considered compensation from the corporation for the services they have supplied.
Q11. Is it necessary to have a company’s books audited?
All businesses, whether private, public, or sole proprietorships, are required to do statutory audits of their books. The company's books must be audited annually by the company's auditor, and the auditor must present the audit report to the Board prior to the company AGM.
Q12. What are articles of association and memorandum of association?
The company's internal rules and regulations are outlined in the articles of association. It includes things like hiring directors, auditing and accounting, borrowing authority, winding up procedures, etc. The five key pieces of information about the company—its name, registered office, member liability, purpose for which it was established, and capital details—are contained in the memorandum of association. A company's memorandum of association takes precedence over its articles of association.
Q13. What taxes apply to Indian companies?
Corporate income tax is imposed on Indian companies, and the rates vary according to their activity and sales. Other taxes, such as goods and services tax (GST), stamp duty, and others, could also apply to a firm, depending on its nature.
Related Posts
See AllA trademark is a symbol, sign, or mark that is used to distinguish products offered by two or more firms. The right to trademark...
Filing an Income Tax Return (ITR) is a crucial financial responsibility for every taxpayer. With India’s evolving tax landscape,...
