Indian Company Registration
India is always a place for multiple opportunities for numerous firms to nourish, with a vast possible consumer base of more than 1.4 Billion.
Establishing a presence in India is key to overcoming cultural alienation, targeting specific emerging markets with huge potential within India, and leaping over bureaucratic hurdles.
India still carries plenty of promise as one of the world’s largest economies and consumer markets. It is one of the rare countries that has continued to attract FDI investment even during the pandemic.
To begin with any business venture in India, it necessary to comply with Indian laws & all legal requirements for Indian Company registration.
Procedure for Indian company registration
1. Check Company Name: Decide a business name and go to the Ministry of Corporate Affairs website to check Name availability for your company. You can choose the MCA Services option first, then the Company Services option. After that, you can go to ‘check company name’ option, to check your chosen name.
2. Get a Digital Signature Certificate: A digital signature certificate is required for all the directors and subscribers of the Memorandum of Association. Since the Indian company registration process is fully online, one needs a digital signature to sign digital documents on the MCA portal.
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: Once the submission of all the required documents has been completed, the registrar will examine all the documents. After verification and successful completion, the registrar will issue the company’s incorporation certificate. If any changes are required, you will be notified of the suggestions.
8. Obtain your Company Identification Number: Obtain your Company Identification Number(CIN), Permanent Account Number (PAN), and Tax Deduction/Collection Account Number (TAN) at the time of registration.
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.
Checklist to Register a Company 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 Business Structures Available 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)
This option lets you limit your liability, in case the business winds up, to business assets only. A single person can start an OPC with minimum documentation requirements. There is also no need to conduct annual general meetings or file returns with the Registrar of Companies.
Private Limited Company
This may be a company limited by shares in capital or by an amount that each company member promises to contribute to the assets of the company. Shares or contributions need to be mentioned in the Memorandum of Association of the company. You also need to have a minimum of 2 members and 2 directors, one of whom (directors) 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 offers a wholly online process to help you register the type of companies mentioned above. However, documentation requirements can be complex. Your decision at this stage will also affect how much tax and what kinds of filings and audits you will need to legally perform 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.
Company Setup
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Benefits of Registering your Company in India
- Registration helps in generating more capital through reliable sources (banks & institutional lenders)
- The company becomes a separate entity and if anyone sues the company you will not be affected directly
- Your liability towards the company is limited to the number of shares you own
- Your ownership and liabilities can be transferred from yourself to another person
- You enjoy tax benefits for Directors and other employees
- Hiring professional management and ownership help the company maximize its potential
- It becomes easier to build brand reputation and attract genuine leads
- Scalability and expansion becomes easier
- Improved relationships with vendors, suppliers, industry associations, and customers
- Distinct corporate identity and existence
- Ensures perpetuity and continuity
- A company becomes more transparent 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) | |
|---|---|---|---|---|
| 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.
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?
Company Setup
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ASSISTANCE
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.
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’.
