To establish a business entity in India; the entrepreneurs should have multi-talented qualities from washing utensil to managing team with great skills. Then they can survive and flourish their businesses with unfair advantages.
As you decided to start a business on certain products or services to solve the real problems of consumers; then it would be a great objective to achieve success in business. Listening to them; understand their need and making solutions is great challenge of business goal. If you would do such, there would be the chance of win-win game.
Before moving forward to your business journey, go through the below process and acquire certain legal certification as per the business need. Because it matters for your business as well as for customers, they would able know and understand you’re a registered and authorized organization and it builds a great trust from customer-side.
To help you get started, we’ve created a simple piece of infographic on business formation which helps you to understand and rethink about the process.
Here’s take a look how a company can be created with certain steps
Reserving and getting approval the name of your company online
The first step in setting up a startup in India is to get approval for the name of your company electronically. You can easily check your desirable company name through official website of MCA in order to see if your preferred name is there or not. At the most you would be allowed to submit 6 names.
Once a name has been approved it would be shown on the website.
Getting DIN for directors
You have to get a DIN (director identification number). You can file the application form DIN-1 online and get a provisional DIN. After that you would have to print the filled-up application form and sign it. Then you have to send it to the concerned ministry in order to get approved. You also need to provide proof of address and identity along with the application. When it is approved and verified you would get a permanent DIN.
Getting the digital signature certificate (DSC)
The MCA (Ministry of Corporate Affairs) has authorized a number of private agencies in India and it is only from one of them that you can get the digital signature certificate.
The application in this case needs to be made by the company directors on an application form that has been prescribed for the same. In this case you need to provide proof of address and identity.
Stamping the papers of your company
In order to get the incorporation documents of your company stamped, you need to provide unsigned copies of your MOA (memorandum of association) and AOA (articles of association). You need to submit the payment receipt along with your application as well. The Superintendent would normally return these copies and one of them would be duly stamped, embossed, and signed. After this the promoters of the company have to sign the MOA. You would also need to fill up certain information on your own.
Getting the certificate of incorporation
You need to visit the official website of MCA and fill up forms such as Form-1, Form-18, and Form-32. You would also need to provide scanned copies of the consent provided by the directors of the company. You also need to submit stamped and signed copies of your AOA and MOA. All these need to be attached to the Form 1. Along with this you also need to submit a power of attorney and a name approval letter. All these have to be submitted to the Registrar of Companies.
You would automatically get the certificate of incorporation at the registered office of your company. It would be sent by way of registered mail.
Making a seal
As a company you would need a seal in order to issue documents such as share certificates. The costs in this case would depend on the number of words that you are looking to engrave on the same, the time period within which you want the delivery, and the number of seals that you need.
Getting a PAN
You can make the application for PAN (permanent account number) by using Form 49A.
Once you get the PAN you would get a printed PAN card as well. You can also make the application for this online. However, you would still have to send the documents physically so that they can be verified.
Getting a TAN
You need to apply for the TAN (tax account number) by filling up Form 49B. You would have to submit the same at a TIN (tax identification number) facilitation centre. Once your application has been verified it would be sent to the income tax department and your TAN would be issued. You can apply for TAN offline or online through the official website of NSDL (National Securities Depository Limited).
Registering with the Office of Inspector, Shops and Establishment Act
In this case you have to apply to the local shop inspector. For this you have to provide a statement that contains the names of the manager and the employer as well as the name of the establishment. It should also contain the postal address as well as the category in question. Within 30 days of starting your business you have to register your establishment with the official in question.
Registering for GST
If your business has a yearly turnover of more than INR 20 lakh you should register for GST (goods and services tax) in India. If your business is in any of the following states however an annual turnover of more than INR 10 lakh would be considered enough for GST registration:
- Arunachal Pradesh
- Jammu and Kashmir
- Himachal Pradesh
For the latest procedure in this case it is always better to visit the official website of GST.
Registering for professional tax
The Section 5 of the Professional Tax Act makes it mandatory for these taxes to be charged from every non-governmental employer. You also need to get a certificate of registration in this case from the professional tax office of the state where you are doing the business. In this case you need to fill up the Form 1.
Registering with EPFO
You also need to register with the EPFO (Employees’ Provident Fund Organization) in the region where you are doing the business. You need to do this in a prescribed way so that you can get the establishment code number. You do not need to register separately for the employees. Do keep in mind that this is a national requirement.
Registering for medical insurance
By registering for medical insurance, you would be able to insure each and every employee on your books and set up individual records on their behalf as well. According to the Employees’ State Insurance (General) you have to submit Form 1 for the purposes of registration. After this you would get the employee code number.
Mention needs to be made of the Startup India Programme of the Indian government. The Prime Minister of India, Narendra Modi, announced this programme during the 15 August 2015 address that he made from the Red Fort at New Delhi.
The programme is based mainly on three pillars – interpretation and hand-holding, funding provision and incentives, and partnership and incubation initiatives between industries and academia. Through this programme, the government also wanted to do away with the restrictive policies that various state governments had at that point in time. This included the likes of License Raj, foreign investment proposals, etc. It was DIPP (Department of Industrial Policy and Promotion) that organized the same. Under the programme the government has already come out with a number of initiatives such as the MUDRA Banks Scheme and the I-MADE programme.
Getting professional help
If you are unable to manage all this on your own you can always avail the services of the likes of PatSon Legal that would help you at each and every step of the way. It is common knowledge that these processes can be really detailed and as such they can get pretty daunting as well.
This is where you understand the true value of these organizations. You can have complete faith on us because this is what we do for a business breathing requirements and you can be sure that we would do it a lot better than you as well.