From a handful of tech-ventures to 29K startups in 2014 to around 55K startups by the end of 2020, The Indian startup system has developed and grown by leaps and bounds in the past decade.
Although the COVID 19 pandemic has delivered a brutal blow to the startup system, it has also acted as a catalyst for many to reimagine, recreate, reengineer, refocus, and reappear.
With around 12 Indian start-ups joining the league of Unicorns in 2020, more and more local entrepreneurs are pushing themselves to become self-reliant.
According to the Department for Promotion of Industry & Internal Trade, there were around 24,927 companies were recognized as startups in November 2019. And during the pandemic, the Indian startup ecosystem has emerged even stronger with 39,114 new startups in early November 2020.
If you are planning to start a business and register it as a private limited company, here are the key steps that will ensure a successful company registration in India.
But first things firsts! What exactly is a private limited company?
A private limited company is a privately-held business entity. Though it is held by the private stakeholders, the partnership extends only up to the number of shares held by them. The governing body for such a company is the Ministry of Corporate Affairs (MCA).
Here is a list of mandatory things for the company registration process:
Members & Directors: For a company to get registered, it must show a minimum number of two and a maximum number of 200 members. This requirement is mandatory according to the Companies Act 2013.
Name of the company: This is often considered the most technical task, which is also the most difficult. A private limited company is required to cover the three aspects while deciding a name such as Main name, Activity to be carried out, and mention of PVT. Ltd in the end.
Registered office address: The permanent address of the registered office must be filed in the registrar of the company, once the company has been registered.
Important Documents: For electronic submission of documents, the registered company must obtain a digital signature certificate. A digital signature certificate helps to verify the authenticity of the documents.
Steps to form a Private Limited Company:
Step 1. Obtain DSC (Digital Signature): As we mentioned earlier, DSC is required to file the forms for company formation. It is mandatory for all the subscribers and witnesses in the memorandum and the articles of association. As the company registration process is online, the forms require a digital signature.
Step 2. Apply for DIN (Director Identification Number): DIN is an identification number for a director. The business owner who wants to be a director of the company must obtain DIN. One DIN is sufficient to be a director in any number of companies.
Step 3. Name Approval: Decide a name and apply for the registration. There are two methods- RUN (Reserve Unique Name) and SPICe (INC-32). In the first method, the applicant gets only a single chance. Once rejected, the applicant will not get a second chance to apply. The applicant will have to re-file another RUN with the prescribed fee.
In the case of SPICe, the applicant will get a second chance of approval, in case of rejection due to the non-approval of the name.
Step 4. E-MoA (INC-33) and e-AoA (INC-34): e-MoA refers to an electronic Memorandum of Association and eAoA is electronic Articles of Association. These forms were introduced to simplify the company registration process in India.
Memorandum represents the charter of the company, while articles of the association represent the internal guidelines, rules & regulations of the company.
Step 5. PAN & TAN Application: Through form SPICe, an applicant can also apply for the company`s TAN and PAN. Form 49A is used for PAN, and form 49B is used for TAN. Once you have submitted the form SPICe, the system will automatically generate these forms.
You can download the forms from the website, affix them with digital signatures, and upload both the forms on the portal of the Ministry of Corporate Affairs (MCA). After MCA will approve the registration, a Corporate Identity Number (CIN) will be allocated. You can track CIN online on the MCA portal.
We hope the above-mentioned steps will guide you through the company registration process. However, getting your company registered is just the first step.
To ensure that your business grows and prospers in the future, you will need to take care of various other aspects related to business. For that, you will need proper guidance and smart strategies. Take our Everything about Entrepreneurship course to learn the business dynamics.
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