In recent years, India’s younger generation appears to have become more interested in entrepreneurship. This desire to leave a legacy through a commercial empire is beneficial to the economy. The Indian government is also encouraging company formation by making the procedure more simple and efficient. Entrepreneurs, on the other hand, should be aware of what happens once their company is incorporated. But, exactly, how does the procedure of forming a business in India work? This article will look at the process of forming a business and the regulations that come with it.
Documents Required for a Company’s Incorporation in India
To form a private limited company, you’ll need at least two shareholders and directors, as well as the following paperwork.
- Passport-sized photo taken recently
- Completed application form
- Aadhar card, passport, voter ID, ration card, PAN card, or driver’s license are all examples of identification cards.
- Statements from the last two months’ bank statements
- Digital signature certificates of the proposed directors
- Director Identification Number
- Proof of business possession – power, water, gas, or phone bills / rental agreement / NOC from the owner/property registration
- property tax receipt/certificate
Overview of the Process of Setting up a Company in India
- First and, business owners must choose a name for their organization that is legal. The name must then be submitted to the Ministry of Corporate Affairs for approval via SPICe+. A1
- Business owners must complete and file SPICe+ Form B after the MCA authorizes the proposed name. They must also submit copies of the above-mentioned supporting documentation.
- Following that, the business owners must meet with legal counsel and begin drafting their Memorandum and Articles of Association.
- Entrepreneurs must finish the registration process online after they have all of the documentation required by the Companies Act of 2013. They will also be required to pay the required processing costs online following their state’s rules.
- The MCA will next analyze all of your documentation and process your incorporation application. They will issue a certificate of incorporation within seven days if they are pleased.
Entrepreneurs can apply for a PAN card and TAN for their business once they acquire their registration certificate. Online registration for Employee State Insurance and Provident Funds is also available for business owners. Entrepreneurs can also file for a GST registration through the MCA site at the same time for faster approval.
Companies in India must comply with post-incorporation regulations.
Following a startup’s incorporation, it must adhere to several regulations to maintain smooth operations. Here’s a quick rundown of the compliances that must be performed soon after a company is formed in India.
- If the registered office’s address at the time of incorporation differs from the office’s current address, notify the MCA.
- Within thirty days of incorporation, hold the company’s first board meeting.
- Appoint a First Auditor and provide the MCA with information about them using Form ADT 1.
- Within sixty days of incorporation, open a bank account.
- Within sixty days of the company’s establishment, issue share certificates.
Startups can only start their firm after filing Form INC-20A with the MCA within 180 days of incorporation, according to Section 10A. - Conduct board meetings regularly and prepare, regulate, and maintain information about their minutes.
- Companies must file Form MSME every six months if applicable.
- Companies that are subject to ESI, PF, and GST must file their returns on a monthly or quarterly basis, depending on the requirements. Companies with a TAN must also deduct and deposit the applicable TDS amount on a monthly basis. These businesses must also file their TDS returns on schedule every quarter.
Optional Registrations Following a Company’s Incorporation in India
Below is a quick rundown of the different optional registrations that businesses can apply for once they’ve been formed.
- Import-export registration is required in order to extend your firm into new markets.
- If your company qualifies under the MSME Act, you can apply for MSME registration. This will enable the company to take advantage of a variety of government incentives, including loans, subsidies, and welfare programs. Businesses that register a complaint under the MSME Samadhan Scheme can potentially recover debts from clients.
- If a company wishes to preserve its brand identity and has a unique name or logo as product differentiation, it should register a trademark.
- Startup India registration entitles you to a variety of tax incentives from the IRS for a set period of time.
- If your company sells or services food, you’ll need to register with the Food Safety and Standards Authority of India (FSSAI).
How Can We Assist?
As you can see, there is a slew of regulations that entrepreneurs must adhere to the following formation. To someone who is unfamiliar with the business world, the process of forming a company can appear complicated. To ensure that you stay on the right side of the law, visit an expert such as GetMyCompany before incorporating your firm. Our Accounting, Bookkeeping, and Compliance (ABC) package, ably guided by a team of qualified lawyers, chartered accountants, and company secretaries, can assist you to comprehend all of the legal requirements of running a business so that you stay compliant at all times. So, how long do you plan on waiting? GetMyCompany can help you establish the organization of your dreams!
