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| Starting your own business is very exciting & has its own benefits! |
Please bear
in my mind that these are standard procedures and are applicable in most cities
in India, however, some in some cities there are some additional (or lack of)
processes that you will have to find out.
The steps
given below are for incorporating a Business
Steps
involved in starting business in India
Registration
Requirements:
|
No:
|
Procedure
|
Time to
complete:
|
Cost to
complete:
|
|
1
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Obtain
director identification number (DIN) online from the Ministry of Corporate
Affairs portal (National)
|
1 day
|
INR 100
|
|
2
|
Obtain
digital signature certificate online from private agency authorized by the
Ministry of Corporate Affairs (National)
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3 days
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INR 1,500
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3
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Reserve
the company name online with the Registrar of Companies (ROC) (National)
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2 days
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INR 500
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|
4
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Stamp the
company documents at the State Treasury (State) or authorized bank (Private)
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1 day
|
INR 1,300
(INR 200 for MOA + INR 1,000 for AOA for every INR 500,000 of share capital
or part thereof + INR 100 for stamp paper for declaration Form 1)
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5
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Get the
Certificate of Incorporation from the Registrar of Companies, Ministry of
Corporate Affairs (National)
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5 days
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INR
14,133 (see comments)
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6
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Make a
seal (Private)
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1 day
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INR 350
(cost depends on the number of seals required and the time period for
delivery)
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7*
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Obtain a
Permanent Account Number (PAN) from an authorized franchise or agent
appointed by the National Securities Depository Ltd. (NSDL) or the Unit Trust
of India (UTI) Investors Services Ltd., as outsourced by the Income Tax
Department (National)
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7 days
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INR 67
(INR 60 application fee + 12.36% service tax + INR 5 for application form, if
not downloaded)
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8*
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Obtain a
Tax Account Number (TAN) for income taxes deducted at source from the
Assessing Office in the Mumbai Income Tax Department
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7 days
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INR 57
(INR 50 application fee + 12.36% service tax)
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9*
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Register
with the Office of Inspector, Shops, and Establishment Act (State/Municipal)
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2 days
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INR 6,500
(INR 2000 + 3 times registration fee for trade refuse charges)
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10*
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Register
for Value-Added Tax (VAT) at the Commercial Tax Office (State)
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12 days
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INR 5,100
(registration fee INR 5000 + stamp duty INR 100)
|
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11*
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Register
for Profession Tax at the Profession Tax Office (State)
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2 days
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No cost
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12*
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Register
with Employees’ Provident Fund Organization (National)
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12 days
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No cost
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13*
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Register
for medical insurance at the regional office of the Employees’ State
Insurance Corporation (National)
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9 days
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No cost
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* Takes place simultaneously with another procedure.
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Detailed
Steps and Explanation of procedure to start Business in India
Obtain director identification number (DIN) online
from the Ministry of Corporate Affairs portal (National)
Time to complete: 1 day
Cost to complete: INR 100
Procedure:The process to
obtain the Director Identification Number (DIN) is as follows:
1. Obtain the provisional DIN by filing application
Form DIN-1 online. This form is on the Ministry of Corporate Affairs 21st
Century (MCA 21) portal. The provisional DIN is immediately
issued.
The application form must then be printed and signed and sent for approval to
the ministry by courier along with proof of identity and (address):
a. Identity proof (any of the following): Permanent Account
Number card, driver’s license, passport, or voter card;
b. Residence proof (any of the following): driver’s license,
passport, voter card, telephone bill, ration card, electricity bill, bank
statement;
2. The concerned authority verifies all the documents and, upon approval,
issues a permanent DIN. The process takes about 4 weeks.
Obtain digital signature certificate online from
private agency authorized by the Ministry of Corporate Affairs (National)
Time to complete: 3 days
Cost to complete: INR 1,500
Procedure: To use the new
electronic filing system under MCA 21, the applicant must obtain a Class-II
Digital Signature Certificate. The digital signature certificate can be
obtained from one of six private agencies authorized by MCA 21 such as Tata
Consultancy Services. Company directors submit the prescribed
application form along with proof of identity and address. Each agency has its
own fee structure, ranging from INR 400 to INR 2650.
Reserve the company name online with the Registrar
of Companies (ROC) (National)
Time to complete: 2 days
Cost to complete: INR 500
Procedure: Company name
approval must be done electronically. Under e-filing for name approval, the
applicant can check the availability of the desired company name on the MCA 21 web
site.
The ROC in Mumbai has staff members working full time on name reservations
(approximately 3 but more if the demand increases). A maximum of 6 suggested
names may be submitted. They are then checked by ROC staff for any similarities
with all other names in India.
The MCA receives approximately 50-60 applications a day. After being cleared by
the junior officer, the name requests are sent to the senior officer for
approval.
Once approved, the selected name appears on the website. Applicants need to
keep consulting the website to confirm that one of their submitted names was
approved.
In practice, it takes 2 days for obtaining a clearance of the name if the
proposed name is available and conforms to the naming standards established by
the Company Act (1 day for submission of the name and 1 day for it to appear on
the MCA website).
Stamp the company documents at the State Treasury
(State) or authorized bank (Private)
Time to complete: 1 day
Cost to complete: INR 1,300
(INR 200 for MOA + INR 1,000 for AOA for every INR 500,000 of share capital or
part thereof + INR 100 for stamp paper for declaration Form 1)
Procedure: The request for
stamping the incorporation documents should be accompanied by unsigned copies
of the Memorandum and Articles of Association, and the payment receipt.
The company must ensure that the copies submitted to the Superintendent of
Stamps or to the authorized bank for stamping are unsigned and that no promoter
or subscriber has written anything on it by hand. The Superintendent returns
the copies, one of which is duly stamped, signed, and embossed, showing payment
of the requisite stamp duty. The rate of stamp duty varies from state to state.
According to Article 10 and Article 39 of the Indian Stamp Act (1899), the
stamp duty payable on the Memorandum and Articles of Association for company
incorporation in Mumbai, Maharashtra, is as follows:
a. Articles of Association: INR 1000/- for every INR 500,000/- of
share capital (or part thereof), subject to a maximum of INR 50,000,000;
b. Memorandum of Association: INR 200;
c. Form-1 (declaration of compliance): INR 100.
Once the memorandum and articles of association
have been stamped, they must be signed and dated by the company promoters,
including the company name and the description of its activities and purpose,
father-“s name, address, occupation, and the number of shares subscribed. This
information must be in the applicant’s handwriting and duly witnessed.
Get the Certificate of Incorporation from the
Registrar of Companies, Ministry of Corporate Affairs (National)
Time to complete: 5 days
Cost to complete: INR 14,133
(see comments)
Procedure: The following
forms are required to be electronically filed on the website of
the Ministry of Company Affairs:
e-form 1; e-form 18; and e-form 32.
Along with these documents, scanned copies of the consent of the initial
directors, and also of the signed and stamped form of the Memorandum and
Articles of Association, must be attached to Form 1.
The fees for registering a company can be paid
online by credit card or in cash at certain authorized banks. One copy of the
Memorandum of Association, Articles of Association, Form 1, Form 32, Form 18
and the original name approval letter, consent of directors and stamped power
of attorney must be physically submitted to the Registrar of Companies.
The
certificate of incorporation is sent automatically to the registered office of
the company by registered or rush mail.
The registration fees paid to the Registrar are
scaled according to the company’s authorized capital (as stated in its
memorandum):
a. INR 100,000 or less: INR 4,000. If the nominal share capital is
over INR 100,000, additional fees based the amount of nominal capital apply to
the base registration fee of INR 4,000:
b. For every INR 10,000 of nominal share capital or part of INR
10,000 after the first INR 1,00,000, up to INR 500,000: INR 300;
c. For every INR 10,000 of nominal share capital or part of INR
10,000 after the first INR 500,000, up to INR 5,000,000: INR 200;
d. For every INR 10,000 of nominal share capital or part of INR
10,000 after the first INR 5,000,000, up to INR 1 10,000,000: INR 100;
e. For every INR 10,000 of nominal share capital or part of INR 10,000
after the first INR 10,000,000: INR 50.
The payment of fees can be made:
1. offline: one can upload all incorporation documents and generate
the payment challan. Against this challan, the applicant must obtain a demand
draft for filing fees amount in favour of -” the Pay and Accounts Office,
Ministry of Corporate Affairs, New Delhi” and this demand draft is payable in
Mumbai. The applicant must make the payment at specified branches of certain
banks. It takes around one week for clearance of payment. Only after the
clearance of payment does the ROC accept the documents for verification and
approvals;
2. online: the applicant makes the payment by credit card and the
system accepts the documents immediately. Please note that in Mumbai, the ROC
requests for pre-scrutiny of documents for any corrections, before they are
uploaded. Once the documents have been uploaded, they can then be approved
without any further correction. The online filing mechanism requires only one
copy of scanned documents to be filed (including stamped MOA, AOA, and POA).
Schedule of Registrar filing fees for the articles
and for the other forms (l, 18, and 32):
a. INR 200 for a company with authorized share capital of more than
INR 100,000 but less than INR 500,000;
b. INR 300 for a company with nominal share capital of INR 500,000
or more but less than INR 2,500,000;
c.INR 500 for a company with nominal share capital of INR 2,500,000 or
more
Source: trak.in website
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