The majority of business owners are from diverse professions like coders, marketers, designers, etc. They might be proficient in their fields with excellent business acumen. But they might lag in one of the most crucial aspects. It is about legal formalities when it comes to registering a business.
You see, it is crucial to be always on the right side of the law; because you would not like to end up in a legal soup for a mistake that you were not even aware of. Many small business owners prefer to initially focus on shaping their business, building a team, and developing a vision.
Pitching to clients, meeting with investors, closing deals and product development are the core business functions that might keep them occupied in the first few months. However, the first thing that they should do while embarking on a journey as an entrepreneur is to get their company registered.
The moment a company is registered, it becomes a distinct legal entity. It becomes an intangible entity that enjoys perpetual succession that is not affected by insanity, insolvency, or death of the business owner. Are you wondering how to register your business? Don’t worry; we got you covered here today.
You see, the one-time registration process might seem quite long with numerous documentations. But every effort invested in it can save you from a lot of penalties and complications in the future. So to make things easier for you, here is a simplified business registration process with complete documentation.
Obtain Your Digital Signature
The first step of business registration is to obtain a digital signature. This digital signature is the legal identity of business enterprises in India. Here is the detailed process to apply for a digital signature:
- Step 1 - Log on to the official website and select your entity type.
- Step 2 - Fill in the required details such as the class of digital signature certificate, validity, residential address, declaration, GST number, payment details, attestation officer, and type of signature.
- Step 3 – Attach identity and address proofs.
- Step 4 – Make Payment for the digital signature certificate through a cheque or a demand draft.
- Step 5 – Send the documents like the DSC registration form and demand draft or cheque via the post.
Once you obtain a digital signature, you can use it for online transactions, income tax e-filing, filing an annual return, and e-tenders.
Obtain Director Identification Number (DIN)
It is one of the most crucial steps to register a business. DIN a unique 8-digit number assigned by the Central Government to an individual who intends to become the director of a company. DIN comes with lifetime validity. How should you go about it? Here is the process to apply for DIN:
- Fill SPICe Form if you intend to become the director of a new company.
- DIR-3 Form for the person who intends to become a director of an already existing company.
- DIR-6 Form is mandatory if you wish to make changes in your details.
- Documents – You need to attach address proof, identity proof, date of birth, declaration, physical signature, photograph, and so on.
- Once the fee is deposited, and documents are submitted, the central government will issue you DIN.
Secure a Name for Your Company
Giving a name and identity to your small business is hands down one of the most crucial steps in this registration process. But things are not that easy as it seems. Here are some rules for you to keep in mind:
- You cannot choose generic names like corporate technology, solar power, and Karnataka.
- The name should not violate any trademarks, emblems, or have offensive words.
- The name that you propose should not imply any foreign government or embassy.
- You cannot choose a name that is identical to any other operating company.
Prepare Articles of Association and Memorandum of Association
The Memorandum of Association is a crucial document that contains details of all the subscribers. As far as the Articles of Association is concerned, it contains the set of rules and regulations that will govern the working of the company.
Memorandum of Association
It includes the following information:
- Name of the company.
- Date of incorporation.
- Company type.
- The main act under which your company is registered.
- Names and signatures of all the subscribers.
- Limited liability of guarantors or shareholders.
Article of Association
It includes the following information:
- Director’s responsibilities, powers, appointment, decision making, indemnity, insurance, and removal.
- Capitalisation of profits.
- Shares, dividends, and their distribution.
- General meetings
- Voting rights
File the INC-29 to Get the Incorporation Letter
Are you wondering what INC-29 is? You see, it is a 5-in-1 form that was introduced by the Ministry of Corporate Affairs. In simple terms, it is a fast-track company registration process. The Ministry has merged the entire process of obtaining DIN, company name approval, and registration application into a single process.
The main motive was to significantly reduce the total time taken to start and register a company in India. Which types of companies can be registered with the INC-29 form?
- Private limited company
- One-person company
- Limited company
- Producer company
Get the Permanent Account Number
The PAN card is an essential document for a small business, without which business registration is not at all possible. You can get it from an authorised agent or franchise that is appointed by the UTI or NSDL. You need to submit a few documents along with the PAN application form like:
- Copy of Certificate of Incorporation
- Copy of NOC issued by the Ministry of Corporate Affairs
Open a Bank Account
The next step in this registration process is to open a current bank account. Make sure you choose a leading banking institute. You might need to submit some mandatory business-related documents along with some address and identity proofs.
MSME Udyog Aadhaar Registration
Many people wonder how to register a business under MSME. MSME Udyog Aadhaar is a unique initiative by the Ministry of Micro, Small, and Medium Enterprises. The best part is, it is entirely an online process.
In this, the applicant will get a 12-digit number that can be used for MSME registration. The prime objective of this entire process is to streamline the registration process and encourage youth to join this industry. Here is the process of MSME registration:
- Applicant’s Aadhaar number
- Name, PAN number, email ID, gender, and contact number
- Location, address, and PAN of the company
- Total number of employees you want to start your company with
- Bank account details with IFSC code
Other formalities in registering your small business include obtaining your TAN number, GST number, shop license, IEC code, custom duty permits (if applicable), NOC from Pollution Control Board, FSSAI certificate, and AGMARK certificate.
If you are hiring more than 10 employees, you will also need to go for PF and ESIC registrations. Now that you have collected all the relevant documents, you can log in at the official MCA (Ministry of Corporate Affairs) and initiate the registration process.
So, this was all about how to register a small business. Whether you own a manufacturing, retailing, or any other business, make sure you register the company before starting your business operations. A registered company always comes out to be a more trustworthy and responsible entity in society and the industry. You can also connect with a market expert for more information about the registration process.
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Q. Where can we use the Digital Signature Certificate?
Ans. DSC is a legal instrument that can be used to digitally sign various documents like e-tenders, filing income tax returns, and so on.
Q. Which documents are mandatory for company registration?
Ans. Details of the company, name of directors and stakeholders, MOA, AOA along with address proofs, and contact details are the most crucial documents used for company registration.
Q. When is it mandatory to obtain an FSSAI certificate?
Ans. An FSSAI license is mandatory for all the manufacturers, traders, and restaurants involved in the food business. It is a 14-digit number that is printed on every food product they manufacture.