Overview: Company Registration in Delhi, India
India is a country where many businesses may thrive since it has a large potential consumer base of more than 1.4 billion people.
To overcome cultural alienation, target certain growing markets inside India that have enormous potential, and get past bureaucratic obstacles, one must establish a presence in the country.
Being one of the biggest economies and consumer marketplaces in the world, India still has a lot of promise. It is one of the few nations that has managed to draw foreign direct investment (FDI) despite the epidemic.
Any business endeavor in India must first comply with all legal procedures for Indian company registration as well as Indian legislation.
How to Register a Company in India?
The following steps to need to follow to register a company in India. The steps includes:
1. Check Company Name: Choose a name for your firm and visit the Ministry of Corporate Affairs website to verify if it is available. The MCA Services option can be selected first, followed by the Company Services option. Following that, you may verify the name you’ve selected by selecting the “check company name” option.
2. Get a Digital Signature Certificate:All subscribers to the Memorandum of Association and directors must have a digital signature certificate. To sign digital papers on the MCA portal, one requires a digital signature because the whole Indian business registration procedure is done online.
3. Director Identification Number: At least one director of your company must have a DIN number. The DIN number of the proposed director and their address proof is a must to proceed with the Indian company registration.
4. Registration on the MCA portal: One must fill the SPICe+ INC 32 form for successful registration on the MCA portal. To get this done, the directors of the company have to register themselves on the MCA portal. Once that is done, log in to the MCA portal services and fill all the e-forms you can see for successful registration.
5. Fill up the e-Memorandum of Association (e-MoA) and the e-Articles of Association (e-AoA) form on the SPICe+ portal.
6. Complete Documentation: Upload all the above e-forms, pay the fees, and wait for a confirmation.
7. Certificate of Incorporation: Following the completion of all necessary document submissions, the registrar will review each document. The registrar will provide the company’s incorporation certificate upon satisfactory completion and verification. You’ll be informed of any necessary modifications and given ideas.
8. Obtain your Company Identification Number: At the time of registration, get your Tax Deduction/Collection Account Number (TAN), Permanent Account Number (PAN), and Company Identification Number (CIN).
9. Companies limited by shares need to file a declaration: Companies limited by shares need to file a declaration that they have received their subscription amount and have a verified office address within 182 days of being incorporated but before they commence their business.
Requirements for Company Formation in India
Registered Office
It is not necessary to own a property for company registration in India. A rented place can also serve as your registered office address. But you do need to acquire an NOC (No Objection) from the owner of your rental to register successfully.
Company Name
The company’s name should not match already registered companies and trademarks.
Minimum Capital investment
The minimum capital requirement for a Pvt Ltd corporation is not specified.
Two Directors
A maximum of 15 and a minimum of 2 Directors are a must for an Indian Private Limited company registration. Also, one of the directors must be an Indian resident.
From the Directors or shareholders
- PAN Card or Passport copy – from any of the directors or shareholders
- ID Proof – any one of driving license, Voter ID, Passport, Aadhaar card
- Address Proof – any one of Mobile bill, electricity bill, or latest bank details, or a NOC from your landlord if your office is a rental property.
- If your office is your own, get a copy of your sale deed/property deed
- Passport size photograph
For registered office address:
- NOC from the owner of the property
- Address Proof – Anything from Mobile bill, electricity bill, or latest bank details
You would require a scanned copy of all the listed documents above. Also, for address registration, it is not necessary to own your own company office.
What Makes India the Destination of Choice for Your Business?
Most of the global investors are stepping into the Indian market, due to the rapid advancement in digitalization, urbanization as well as the favorable demographic.
Alongside the technology, India is also having skilled workers who are specialized in tech, handlooms, etc. Such cutting-edge technology makes India a favorable choice for business.
Yet, below we’ve listed some of the key points which outlook the reasons to choosing India as your next business destination.
- 3rd Most Attractive FBI Destination in the World
- 1.4 million Companies in Active Operation & Rising
- 32 Global Unicorn Companies Registered so far, each valued at over USD 1 billion
- 419.5 Million Consumers by 2030
- High Digital Competitiveness.
- Continuous Business Reforms
- Stable Political Environment
- World’s 3rd Largest Economy by PPP
Could India be a Tough Market to Enter?
India is a cultural hotbed & business is all about forming a relations than showcasing the facts & figures. Despite of the huge population, and attractive market potential, India has been a robust market to get in for serval multination firms.
In order to successfully navigate these challenges, you will need a helping hand. We can help you right from
- The stage of pre-company formation (market exploration, cost assessment, procedural requirements by law),
- To company incorporation,
- Through to staffing,
- Finding your office space,
- Determining taxes,
- And managing accounts and audits.
- We can also help you understand how businesses operate in India,
- Its unique work culture,
- And establish a completely local presence.
To begin with, you may want to learn how you can set up a business in India. We recommend setting goals and expectations for your India business. Once that is done, you can move on to finding the right kind of organizational structure that can help you meet those goals and expectations.
Types of Company Registration in India
In general, a foreign business can begin operations in India with the following types of organizational structure. You can start your company in India:
- Through a Joint Venture
- Through a wholly-owned Indian subsidiary
The following types of companies can be incorporated in India:
One Person Company (OPC, for Indian Residents only)
With this option, you can restrict your obligation to business assets exclusively in the event that the business closes. An OPC may be started by one person with the least amount of paperwork needed. Additionally, there is no requirement to file returns with the Registrar of Companies or have annual general meetings.
Private Limited Company
This might be a corporation restricted by shares of capital or by an amount that each company member agrees to contribute to the firm’s assets. Shares and contributions must be indicated in the company’s Memorandum of Association. You also require at least two members and two directors, one of whom must be an Indian resident.
Public Limited Company
A Public Limited Company allows you to obtain funding via shares from the public. You need to have a minimum of 7 members and 3 directors, one of whom must be a resident Indian.
You can choose the type of company that best suits your needs and register the organization under the Indian Companies Act 2013. Other than the types of companies mentioned above, Indians can also apply to set up a Hindu Undivided Family, Sole Proprietorship, or Partnership firm structures. However, not all of these fall under the Companies Act for registration. All these latter three types have different registration structures.
Who Regulates Company Registration in India?
The Ministry of Corporate Affairs provides a completely online registration process for the types of corporations listed above. However, the documentation requirements might be difficult. Your selection at this point will also influence how much tax you pay, as well as the kind of files and audits you must conduct lawfully each year.
Apart from registering your company in India, you also have the option of setting up:
A Liaison Office
To collect information, promote imports and exports, or facilitate technical or financial collaboration.
A Branch Office
To provide professional or consultancy services, perform research, develop IT products and services for the parent company, act as buying/selling agent, etc.
A Project Office
To execute specific projects in India. A PO cannot undertake any other activity apart from activities that are related and incidental to the specific project.
A Limited Liability Partnership (LLP)
This company form is relatively simpler to set up than a full-fledged company, requiring at least 2 partners and 2 designated partners, one of whom must be a resident Indian. However, your liability is limited by the number of shares in the LLP in India you own.
How to Decide Which Business Structure Type is Best for You?
Before registering your company in India, it is must you should be equipped with a suitable business structure that will fulfill all your requirements.
Here, are the few things that you need to consider while deciding on your business structure type.
1. Number of Owners
If you want to start a business single-handedly then you can go for a sole proprietorship or a One-Person Company (Indian residence mandatory). If more than one person is present, you should opt for a Limited Liability Partnership firm, a Private Limited Company, etc.
2. Level of risk
A One-Person Company and a Sole Proprietorship come with full risk assumptions by the founder, whereas in a company, there is no personal risk. In a partnership, the risk gets divided among the partners depending upon the mutual agreement.
3. Registration and maintenance cost
In the case of a proprietorship, registration and maintenance are inexpensive and one-time costs. But companies have a high maintenance cost and need compliance requirements from time to time.
4. Credibility
Companies are more credible in terms of registration and other similar procedures but their financial records are accessible to the public. In a sole proprietorship, maintaining a reputation is the sole responsibility of the owner.
5. Tax structures
Each type of business has a different set of tax slabs and structures. For a Company & LLP, these taxes are charged directly. A partnership, too, attracts different kinds of tax structures. All these structures are charged basic 30% and 25% tax rates, respectively, for small companies. For a Sole Proprietorship, the tax rate lies between 5% to 25% after all exemptions.
Benefits for Company Formation in India
- Registration helps you generate additional funds from trusted sources (banks and institutional lenders).
- The corporation becomes a different entity, and if anybody sues the firm, you are not immediately harmed.
- Your duty to the corporation is limited to the amount of shares you possess.
- You can transfer ownership and obligations to another individual. Directors and workers receive tax benefits.
- Hiring expert management and ownership enables the organization to realize its potential.
- It becomes easy to create your brand reputation and acquire real prospects.
Scalability and expansion are easy. - Enhanced ties with vendors, suppliers, industry groups, and customers.
- Maintaining a distinct business brand ensures longevity and continuity.
- A business becomes more open and trustworthy in the eyes of the government.
What Taxes Do Companies in India Need to Pay?
For the purposes of tax, companies are classified into domestic and foreign companies. While the former are liable to pay taxes on income they earn anywhere, the latter are liable to pay taxes only on income earned in India.
Income earned by a company incorporated and registered in India is further categorized as:
- Profits from the business
- Capital Gains
- Income earned from renting assets
- Income from sources such as dividends, interest, and so on
Tax rates on companies as well as individuals keep changing every year and are announced in the Annual National Budget declaration in Parliament. For the Financial Year that ended on March 31, 2021, the rates were as follows.
Tax Rates for Domestic Companies in India
| Domestic Company under the Income Tax Act | Tax Rate | Surcharge (If total income between INR 10,000,000 to 100,000,000) | Surcharge (If total income over INR 100,000,000) |
|---|---|---|---|
| Companies under Section 115BA (those that had a turnover of INR 1,150,000,000 in FY ending March 31, 2018 | 25% | 7% | 12% |
| Companies under Section 115BAA | 22% | 10% | 10% |
| Companies under Section 115BAB | 15% | 10% | 10% |
| Other Domestic Companies | 30% | 7% | 12% |
Foreign companies are subject to the following
tax rates
| Type of Income | Tax Rate |
|---|---|
| Royalties, fees for technical services received in India through agreements entered into before April 1, 1976 | 50% |
| Any other income | 40% |
According to Section 139 of the Income Tax Act, you, as a taxpayer, need to file your income tax returns every year within the notified period or face a penalty.
These high rates are one more reason why you should register your company under Indian law to commence business in the country.
GST in India
It is mandatory for companies manufacturing or supplying goods and services in the Indian market to register themselves for the Goods & Services Tax (GST). This includes foreign companies without a place of business in the country.
The GST replaces the previous system of Value Added Taxes (VAT), Excise taxes, service taxes, etc.
The GST is made up of 3 components
- The Central GST (CGST) is levied on sales where goods/services are transferred within state borders.
- The State GST (SGST) is levied on sales where goods/services are transferred within state borders.
- The IGST is levied on the inter-state sale of goods or services.
Who should register for GST?
- Previously registered taxpayers of Value Added Taxes (VAT), Excise taxes, service taxes, etc.
- Taxpayers without a place of residence in the place where he/she supplies goods and services
- Any taxpayer in India whose annual turnover is INR 4000,000 (INR 1000,000 in the North Eastern and hill states of India) or above needs to register for the GST
- Input service distributors and agents of suppliers
- Those to whom the Reverse Charge Mechanism of the GST is applicable
- E-commerce aggregators and their suppliers
- Businesses supplying information or database services from outside India to a person residing in India.
The GST requires taxpayers to register on the GSTIN website, file monthly and annual returns, file for receiving Input Tax Credit, e-way bills for goods being transported, and so on. We recommend consulting a seasoned tax professional to manage the entire process so that you can concentrate on innovating and growing your business.
Why Choose Odint Consulting?
While procedures and papers needed might seem complex to an outsider, an expert can pull you through with tried-and-tested methods to get your company registered and become compliant with local regulations. We offer a cost-effective way for your Indian company registration. All your legal obligations are taken care of. Once you’re done with all the documentation and submissions, we will provide you with your company’s Incorporation letter along with all other identifiers such as CIN, DIN, PAN, and TAN numbers.
Basic terms related to Indian company registration
- Board of Directors: People selected by shareholders to govern the company’s business.
- Certificate of Incorporation: A document that shows in writing that the company has been registered under Indian company law and can lawfully start doing business.
- DSC: Digital Signature Certificate, assigned by authorities that can be used to sign official documents.
- Dissolution: The documents that say the company doesn’t exist anymore.
- DIN: Director Identification Number
- Name Reservation: allows a company to obtain an exclusive corporate name for a specified period.
- Amendment: Any changes, additions, and deletions, in the existing Article of Association document.
Now that you know how to register your company, where do you go from here?
Most Promising Business Opportunities within India
| Creating & Maintaining Websites & Apps | Pharmaceuticals |
|---|---|
| With its record number of computer engineers and coders passing out from universities every year, India has the most competitive IT service pool in the world. Combined with the pressing global consumer dependence on e-commerce and online experiences, this sector can only grow vertically. | India is often called the pharmacy of the world because of its huge capacity to procure APIs and transform them into generic drugs and medicines, coupled with a friendly manufacturing regime. Stringent quality checks and standards, if implemented by the right businesses can quickly catapult you to markets in Asia, Africa, South America, and many others. |
| Amazon FBA | Renewable & Clean Energy |
| You can easily procure rich handicrafts, ceramics, and other mass-produced goods, re-package them, and sell them at a profit on Amazon. Amazon’s fulfillment services cover boxing, warehousing, and delivery to run the last mile in India. Expanding urbanization and a growing internet base have ensured that goods can now reach every nook and corner of the country. | With its rising energy needs required to power its stated goal of a $5 trillion economy, India is at the right stage where it could shed its dependence on coal, petroleum, atomic, and hydropower resources and replace them with solar, wind, thermal, and renewable sources. Energy companies are highly sought after and subsidized by the government |
You could be selling and earning profits off any of the myriad booming opportunities from your India business right now.
Conclusion
Registering a company in India can provide you with numerous business opportunities. With a population of over 1.4 billion, India offers entrepreneurs a sizable consumer base and the possibility to grow their businesses in an expanding market. India is a desirable site for business establishment due to its ongoing economic reforms, stable political climate, and technological advancements.
You can talk to professionals from OnDemand International if you want to register a business in India. Our experts will help you compile the necessary paperwork, select the best business structure, and submit your incorporation application to the MCA. To register your business in India, contact us right now.
FAQ’s
No, the company’s registration process can be completed online. One must have scanned copies of all the documents at hand.
You can easily check the MCA records online, and if somebody has already taken your company name, then you just need to choose a new name and get your company’s registration done.
By applying to the Ministry of Corporate Affairs on their official portal.
These are the documents that contain the company’s mission, vision, and objective statements. In addition to the purposes mentioned above, these documents also define the business and allocate different roles and responsibilities.
No, there is no minimum capital requirement for company registration in India.
To check the company’s registration status,
Step 1. Visit the MCA’s official website.
Step 2. Go to the MCA Services tab
Step 3. Click “View Company/LLP Master data”
Step 4. Enter your CIN
Step 5. Finally, check the status for the company to see if it says ‘Registered’.
