Once you have come up with a great idea and decided to start a business you will need to follow some procedures for starting business in India. An important consideration to look into is the various government guidelines. Guidelines for setting up a factory, seeking permits from various departments (including electricity, water, environment, etc) and filing registrations along with necessary fee, necessary taxation, etc. are some of the issues you need to address
Company registration has forever been a major challange for entrepreneurs looking to set up their businesses in India. A recent study found India has been ranked142nd on the Ease of Doing Business Index and 158th on Ease of Starting a Business. The newly introduced INC-29, a five-in-one form introduced by the Ministry of Corporate Affairs (MCA) in May 2015, will go a long way toward improving this ranking.
The INC-29 form has tremendous ramifications on the registration process. It significantly reduces interaction with the authorities through the clubbing of forms for DIN allotment, name reservation, incorporation, PAN & TAN, as well as ESIC registration.
Startup Checklist in Starting Business in India
Step 1 for Starting Business in India
- Obtain Digital Signature Certificate from MCA-authorised agency
- Time to Complete: 2 to 5 days
- Cost to Complete: INR 1,500
- An Entrepreneur needs to submit the completed Class-II form, self-attested copy of PAN card or, in the case of foreign national, copy of Passport, and self-attested copy of Voter ID/Ration Card/Driver’s License/Latest Utilities Bill/AADHAR Card.
Step 2 for Starting Business in India
- Preparing INC-29
- Time to Complete: 1 to 3 days
- Cost to Complete: Company secretary fees
- The INC-29 is an eight-page form requiring several pieces of information and documents. In some of document you need a Company Secretary’s signature, to be submitted in one go.
1. Director Information Number:
The DIN is the number through which the MCA identifies directors of companies. Obtaining a DIN involves the submission of the following documents:
- Scanned copy of Passport-sized photograph
- Scanned copy of PAN card (passport if foreign national) and Driver’s License/Voter ID/Latest Utilities Bill.
2. Name Approval
Once you’ve decided a name for your business, also describe the significance of the name in one or two sentences. It would need to be entered into the form.
- Ensure that your company’s proposed name has not already been taken on mca.gov.in.
- Ensure that there is no registered trademark in the same name by checking at ipindia.nic.com.
- Ensure that the first half of the name is unique. Avoid geographical references, adjectives, abbreviations and generic terms.
- Ensure that the second half describes the sector you’re in.
3. Memorandum and Articles of Association
The Memorandum of Association (MoA) and Articles of Association (AoA) need to be attached to the INC-29. Generally a Company Secretary drafts it and it should contain the signature of one. The MoA will also contain the main objects of your business
4. Registered Office
All companies must have a registered office address. It does not mean that you need to have a commercial space. It can even be the home address of a director. But the details need to be provided, along with a copy of the Rental Agreement along with a NoC from the owner (if rented property) and sale deed (if the property is owned).
5. Appointment Letters and Declarations
Several different attachments need to be submitted along with the application.
- Letters of appointment of directors, CEO, managers
- Declaration by the first director in INC-9
- Declaration by the appointee director and managing director in Form DIR-2.
Step 3 for Starting Business in India
- Filing INC-29
- Time to Complete: 1 day
- Cost to Complete: Rs. 2000 + authorized capital fee + stamp duty
After filling the form INC-29, you will be directed to pay the fees and stamp duty to a payment gateway. The fees will change according to the authorized capital fee and the stamp duty will vary according to your location.
Authorized capital fees are as follows:
Rupees 100,000: Rupees 5,000;
For every Rupees 100,000 of authorized capital up to Rupees 500,000: Rupees 4,000;
For every Rupees 100,000 of authorized capital up to Rupees 50,00,000: Rupees 3,000;
For every Rupees 100,000 of authorized capital up to Rupees 100,00,000: Rupees 1,000;
For every Rupees 100,000 of authorized capital over Rupees 100,00,000: Rupees 750
Step 4 for Starting Business in India
- Issue of Incorporation Certificate
- Time to Complete: 2 days onwards
- Cost to Complete: No
Once you receive incorporation certificate, you are now eligible for registration of PAN, TAN, PF, ESI etc. all these things. Below a detailed list has been given including major necessary requirements.
|1||Director Identification Number||1 Day||Rupees 100|
|2||Digital Signature Certificate||3 Days||Rupees 1500|
|3||Reserve Company Name Online||2 Days||Rupees 500|
|4||Stamping documents at state treasury or authorized bank||1 Day||Rupees 1300|
|5||Incorporation Certificate||5 Days||Rupees 14133|
|6||Private Seal||1 Day||Rupees 350|
|7||Permanent Account Number (PAN)||7 Days||Rupees 67|
|8||Tax Account Number (TAN)||7 Days||Rupees 57|
|9||Registration with Shops and Establishment Act||2 Days||Rupees 6500|
|10||Value Added Tax (VAT)||12 Days||Rupees 5100|
|11||Profession Tax (PT)||2 Days||No|
|12||Employees Provident Fund (EPF)||12 Days||No|
|13||Employees State Insurance (ESI)||9 Days||No|
Please remember that these are standard procedures and are applicable in most of the cities in India. however, in some cities, there are some additional (or lack of) processes that you will have to find out. In future, we will submit more article concentrating on the detailed procedures of above-mentioned registration.