To start up a new business is like a challenging proposition in India. It can bring benefits for both the company and the economy at large. Yet, starting a new company under the legal procedure, it is essential to know about Act 2013. Moreover, local and foreign investors can register many types of business companies.

As a general review, most Indian companies registered as private limited companies, and it has become a common way to start a business at the initial level. There is a simple and easy way that had introduced by the Indian government to enhance the economy.

Steps Involve for Starting a New Company:

1-Checking the Company Name Availability:

Before starting a new company, you must have to check the availability of your proposed name. Thus, the Ministry of Corporation introduced the RUN web application to check the system's availability.

2-Acquiring a Director Identification Number (DIN):

A Director Identification number is a certain number that provided to the potential directors of companies. However, one DIN allots to one or two directors, which is enough to use it for multiple companies.

3-Getting a Digital Signature Certificate:

It is an electronically generated certificate that uses for validation and identification of holders of companies. However, only approved government agencies can issue this certificate.

4-Acquiring company Seal for Official Documentation:

A company seal is mandatory for stamping official papers of companies. It helps to identify the company quickly by its seal.

5-Acquiring a Permanent Account Number (PAN)

Form 49A requires the application of PAN. This PAN application may also fill online, but some documents need to send physically. Moreover, it delivers to your address by official post.

6- Acquiring a Tax Account Number:

TAN is a unique number issued by the txt department. All the tax recoveries will proceed by this PAN number of the company. For this purpose, Form 49B must have to fill to get TAN.

The time required to register the company:

The starting of a new company takes around seven working days for DIN, Name, and Incorporation. But using the MCA application form, the process has become much faster as all documents dragged in a single application. It is a good step for creating a new company in India in a much quicker way.

Advantages of Starting a New Company:

Raising Capital:

Even though starting a new company has come with compliance requirements, it helps owners raise funds through equity. Moreover, they also limit liability at the same time.

Legal benefits:

When the company registers, there are many benefits to making it legal. It means that the company is responsible for its assets and liabilities, and shareholders don't have to worry about losing. Because they always get their profits.

Trustworthiness:

All companies registered under the 2013 act with the Register of Companies (ROC) in India. Through the Ministry of Corporation, you can check the details of the company. Moreover, you will have all the information regarding the company's director. There it is trustworthy to create a new company in India.

Limited Risk:

The personal asset of a shareholder of a new company has limited liability. It increases the company liability by paying from shareholders. In contrast, the shareholder takes less risk than the company owners, which is the best advantage.

Continuous Existence:

A company doesn't lose its perpetual succession after being legally registered. A company can maintain its existence irrespective of the changes in membership or shareholder’s death.

Different type of Companies:

Private Limited Company
Public Limited Company
Limited Liability Company
Unlimited Liability Company
Non-Profit Organization
 

Frequently Asked Questions (FAQ):

Is it challenging to start a new company in India?

No, It is not difficult to start a new company in India because of its comfortable and straightforward way procedure. Moreover, you can register your company online.

What are MOA and AOA?

MOA is a Memorandum of Association that refers to under section 2(56) of the companies ACT 2013. It also defines the powers and objects of the company.

AOA stands for Articles of Association that refers to under section 2(5) of the companies ACT. It defines the rules and regulations of companies.

Is there a limit on the number of directors that can use DIN?

Yes, there has a limit on the number of directors. Only three directors can use the integrated form for allotment of DIN.

In what circumstances physical copies of MOA and AOA requires?

It requires an individual first subscriber out of India or foreign subscribers who don't have a business visa.

Are PAN and ADHAR necessary?

No, on 27th July 2016, the companies third amendment rule introduced to relax the company owner for mandatory attachment of identity and residence proof.

 

Drafted By:
CS.A.Maniraj.,B.Com.,ACS.,CA(Fin), Independent Director 
Certified CSR Professional., Certified GST Professional