Important Tips for Company Registration for Small Businesses

A company registration is something which gives a legal existence to our business venture. It is a very important aspect of any business for it ensures a smooth functioning of business activities under a proper registered name. This also ensures that the company takes a life of its own and can only be closed by a legal intervention and not by any other means. The main benefits of a company registration are:

• Protection against any accidents or financial loss
• Investors are more inclined towards registered companies
• Creates a Legacy

Registering a company is a fairly long and tedious process with some sequence of procedures to be followed. Let’s have a look at some of the company registration tips for small businesses in India.

1. Director Identification Number (DIN) and Digital Signature Certificate (DSC):

Every director of the company needs to acquire a Director Identification Number (DIN) as per the Amendment Act 2006. To obtain the same one needs to fill up the DIN-1 e-Form available on the website of Ministry of Corporate Affairs (MCA) and paying the fees applicable for the same.

One needs to obtain a Digital Signature Certificate from an MCA authorized agency. A digital signature ensures the authenticity of documents filed using electronic mode. This is mandatory as per the Information Act 2000. The Controller of Certification Agencies (CCA) has appointed agencies like TCS, NIC, MTNL etc. to issue DSC. One should not acquire DSC from agencies which are not approved by the CCA.

2. Company Name Approval and Certificate of Incorporation:

In order to get a name approved, one needs to submit Form 1A and wait until the name gets approved by the Registrar of Company (ROC). Earlier there was a provision for submitting six names during the submission of the form but nowadays we can only submit one name. Although we can go through the names of the already registered companies on mca.gov.in to ensure that we have a unique name. The significance of the name also needs to be written down in one or two sentences in the Form 1A. This approval process takes about 2 days.

Certificate of Incorporation requires us to fill up Form 1, Form 18 and Form 32. This process should ideally be done once the name of the company is approved by the ROC. The documents required for filling up Form 1 include the following:

• Form 32 along with consent letter from Directors
• Memorandum of Association (MoA): The document which explains the ways to raise capital through the allocation of shares and the usage of this capital, both in present and in future.
• Articles of Association (AoA): Clauses of the company are defined here.
• Power of Attorney and Identification of subscribers
• The MoA and AoA are to completed and sent to the registrar for verification which is duly stamped post verification to be sent to the registrar office for further processing and issue of the Certificate of Incorporation.

3. Permanent Account Number and Tax Account Number

One needs to apply for a Permanent Account Number (PAN) and a Tax Account Number (TAN) for the registered company. This process takes close to a week.

There are other procedures to be followed which include registering for GST, getting a rubber stamp for the company, registering for professional tax and Employee Provident Fund which are also to be completed. These can be completed simultaneously with the business proceedings of the company once the Certificate of Registration has been issued. 

End-note

These are some of the steps which are required during the company registration in India. The list of documents and process may vary from one state to other. There can also be some other permissions like Consent from the Pollution Control Board required if the business pertains to such a category. With most of the forms available in electronic mode, the process has become fairly straightforward. It is to be kept in mind that the process of registering a company is time taking and it may take somewhere close to 30-40 days for the entire process to get completed. Once should carefully go through all the forms and ensure that none of the required document or information is missed. It is recommended to go for expert advice by hiring experienced professionals if required to ensure that there is no mistake in documentation and the registration process gets completed at the earliest.