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REGISTER A COMPANY
IN INDIA
MAKE IN INDIA
February 2015
ONLINE
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REGISTER A COMPANY
Introduction
1. Business Organisations / Company
2. Proprietorship
3. Company
4. Common Terminology
5. One Person Company (OPC)
6. Private Limited
7. Public Limited
8. Other Companies
9. Partnerships
10. Limited Liabilty Partnerships (LLP)
Registration Process
11. Terminology
12. Non Resident Indians (NRIs)
13. Considerations for Entrepreneurs
14. Cost
15. Frequently Asked Questions
Author
Paras Mehra
ONLINE
INTRODUCTION
We, on a daily basis interact with many entrepreneurs, inspire with
many ideas of theirs, and the kind of imagination they carry is really
awesome. But, in almost every case, we notice that they all lack the
legal part or even the basic knowledge about the legal environment.
Due to this, they sometimes end up either paying huge penalties or
paying to the professional who takes advantage of their lack of
knowledge about the subject.
Guide to Registering Companies in India is the initiative of
Quickcompany.in to pour the basic knowledge about the forms of
business, registering companies and also about the legal environment
in which they will work in future.
Paras Mehra
paras@quickcompany.in
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COMPANY
PROPRIETORSHIP
PARTNERSHIP
We have noticed that startups tend to choose their company type in a rush
(generally, a Private Limited Company) which not only costs more, but
also keeps them away from many legal benets.
Choosing the right business organisation for you depends on your needs
and requirements. While there is not set formula to do so, this guide aims
to help you put in the right direction.
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FORMS OF BUSINESSES
COMPANY
PROPRIETORSHIP
PARTNERSHIP
PUBLIC COMPANY
PRIVATE COMPANY
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2. Proprietorship
The sole proprietorship is the simplest business form under which one
can operate a business. The sole proprietorship is not a legal entity. It
simply refers to a person who owns the business and is personally
responsible for its debts.
A sole proprietorship can operate under the name of its owner or it can do
business under a ctitious name, such as TransCorp Enterprises. The
ctitious name is simply a trade name--it does not create a legal entity
separate from the sole proprietor owner and also there may be chances
that someone might steal your trade name because it is unregistered.
The sole proprietorship is a popular business form due to its simplicity,
ease of setup, and nominal cost. A sole proprietor need only register his or
her name and secure local licenses, and the sole proprietor is ready for
business.
In case the sole proprietor or, even one of the employees is involved in a
business-related accident in which someone is injured or killed. The
resulting negligence case can be brought against the sole proprietor
owner and against her personal assets, such as her bank account, her
retirement accounts, and even her home.
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3 Company
Company is a simple form of business that can handle the complexity of
the modern needs. It is basically like a person, it has its own identity,
dierent from the owners. Once created, it has a perpetual (ever lasting)
life even if the founder of the companies die, it will have no impact on the
company. A company has almost all the legal rights of an individual,
except for the right to vote and certain others.
Company is a customised form of business that can handle the complexity
of the modern needs.
As per the norms, there should be at least one director who should be a
resident of India. Every company name ends up with the word limited
which means that the company has limited
liability.
PUBLIC
COMPANY
At least 2 persons
are needed
At least 7 persons
are needed
Minimum Capital
one Lakh
Minimum Capital
one Lakh
ONE PERSON
COMPANY
Minimum Capital
ve Lakh
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4. Common Terminlogy
SHARES
are a unit of ownership. If a company has 10,000 shares, it means that the
ownership has been divided into 10,000 units. The more number of
shares the person holds, the more the hold of the share owner.
DIRECTORS
manage the aairs of the company. Company is a separate legal entity but
it cannot function itself, it needs someone to do job on its behalf, the
persons who do this job are called directors.
SHAREHOLDERS
are the people who invest money/time/skill into the business. Any person
who owns shares is called a share holder. Shareholders do not necessarily
govern the company, nor are they allowed to interfere in the business until
unless the directors are failed to do their job.
SHAREHOLDING AGREEMENTS
are contracts which are established between the shareholders to agree
upon certain terms between the business organisation
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6 Private Limited
Private company is the most preferred form of business. Private company
can be form by two persons. Private company is the ultimate form of
business, because in this form, owners can do any type of complex
business transaction as they like. For e.g. they can issue ESOPs, raise
capital by selling stakes etc.
According to Entrepreneur.com, it has been noticed that valuation of
business increases by 4 to 5 times, if the startup has been incorporated as
a Private Limited Company
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7 Public Limited
Public limited Company is the biggest and the most powerful form of
business in India.
According to Entrepreneur.com, Public limited companies gives the trust
that you are doing something big and also they have noted that the
valuation of business increases by 10 to 15 times.
It needs at least seven persons to form the company. Public company can
go to public for funds. It can raise any type of nance; can enjoy any type of
legal relaxation. Public companies in India are only permitted to list their
shares in the stock markets.
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8. Other Companies
NON BANKING FINANCIAL COMPANIES (NBFC)
The companies whose main objective is to provide loan and accept
deposits from the public are generally known as NBFCs. These types of
companies are required to be registered with the Reserve Bank of India
(RBI).
NIDHI COMPANIES
companies which can accept deposits from members only and can
provide loan to members only are known as Nidhi Companies. Only Public
limited companies can be formed as Nidhi Companies.
NGO
are special categories of companies registered under section 8 of
Companies Act, 2013. NGO are the organizations which are formed for
nonprot making. NGOs need to be registered with the income tax
authorities.
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9. Partnerships
A business organization in which two or more individuals manage and
operate the business. Both owners are equally and personally liable for
the debts from the business. Partnerships are easy to form. There is no
minimum capital requirement. Only two people are needed to
incorporate the partnership.
FEATURES
Atleast two peoples are needed
Registered Partnership deeds
No minimum capital requirements
In case terms are not decided, then it shall be governed by Indian
Partnership Act
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11 Terminology
11.1 Digital Signature (DSC)
it can be understand as a signature which is done electronically. We all do
Manual signatures by Pen, but we cannot sign on computers, therefore, to
sign any electronic document we need a digital signature. Digital
signatures are also protected with the PIN. It
generally takes 1-2 days with a cost Rs.800 to Rs.1500
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Individual
DSC
of the Directors/Partners
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14. Cost
with QuickCompany, you only pay for the services you use. All our services
have an honest and transparent cost structure.
If you have a case where an existing CA dropped you and left your
company registration incomplete, we can pick up from where he left and
on top we will not charge your for the work already completed.
OPC
PVT LTD
LLP
PRIVATE LIMITED
REGISTER NOW
REGISTER NOW
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DSC FOR 1
DSC FOR 2
DSC FOR 1
NAME APPROVAL
NAME APPROVAL
NAME APPROVAL
MOA / AOA
MOA / AOA
LLP AGREEMENT
REGISTRATION
REGISTRATION
REGISTRATION
CERTIFICATE
CERTIFICATE
CERTIFICATE
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Q. I want to start a small business selling packed desi ghee in big bazaar
and other malls and online under a brand name. Please suggest what
legal licenses and rm registration formalities required and will u be
able to take care all these?
A. First of all, you need a business organization to work under, you may
choose like one person company (if you are a single person, this is a best
option for you, because it involves least cost and least compliances. Yes
we provide a single solution to all our customers, and we will take care of
all your responsibilities.
Q. I am in service industry and want to open in my wife's name. What
required a bank account (type?) pan card(?) or what other document.
Would I be able to put my home address in my company address?
A. Yes, you can open in your wife name, the documents required to open
an OPC can be seen from the documents required section of this guide
and the total cost involve in the process. Yes you can use your
home address as your corporate address.
Q. Should I go for sole proprietorship for tax benet? Or OPC? Is there
any legal license also required starting food business (ghee) and would
you also help in this regard?
A. In our view, you must not go for sole proprietorship rather you should
opt for One Person Company (OPC). OPC is a new concept and it is actually
a wonderful substitute for proprietorship. No, initially you don't need any
license, but when you will cross the 10 lakh revenue, and then you will
have to apply for VAT registration (we will provide you with the solution)
Q. My website domain is www.abcaxyz.com, can I get the company
registered with the same name? Or will there is any problem if the
domain name is dierent from the company name?
A. If the specic name is available then you might get the name.
However, it will have no eect if you get the company name dierent
from the domain name. Companies like lenskart.com has there domain
name dierent from the company name. Your domain name is your brand
name; you can get it secure by applying for a trademark.
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Q. Can Pvt Ltd raise money from crowd funding sites for particular
projects since no funding from Public is mentioned in your doc?
A. You can raise any private funding including seed funding, but you
cannot raise funds from public through Public oer.
Q. Your document says No investments allowed in OPC, Means?
A. In OPC, investment is not allowed, as there cannot be two shareholders.
OPC can raise loan funds, but cannot raise investments including seed
funding etc.
Q. Doc requirement says PAN+Registered address proof (Registered
sale deed), but for residence proof it requires ElecBill,Tele Bill,Mobile
Bill,Bank Statement. if I want to use my Residence as Oce then what?
only Sale deed will do?
A. No both will be required
Q. What is the means of 1 lakh capital? Does it requires in the form of
CASH or it can be adjusted by Assets that I will bring in like (Laptop,
Modem, Softwares etc)
A. 1 lakh capital means the minimum capital that you are required to bring
into the business. After incorporation, you will have to bring 1 lakh into the
bank account of the company, which you can use it for business purpose.
It is like moving the money from one pocket to another.
You can bring it in kind as well, but it is always advisable to bring
money in account rst and then adjust it against the assets you bring.
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Acknowledgement
We at Quickcompany are committed to excellence of service and
promoting entrepreneurship in India.
We have an honest and transparent pricing structure, where you know
before hand exactly what you are paying and the services ocered..
Further, we provide you with a Guarantee of 100% Satisfaction.
Thanks and Regards
QuickCompany.in
MAKE IN INDIA
paras@quickcompany.in
agam@quickcompany.in
Address
91SpringBoard, Plot 23
Maruti Industrial Area,
Sector 18, Gurgaon, Haryana 122015
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