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Company Registration Online – How to Register a Private Limited company in India

Company Registration Online : Get company registration with expert assistance. Find out more on how to register a company in India here.

Updated on :  

08 min read

Confused about which company structure to choose? Try out our tool to decide!

Picking the right company structure for your business is as important as any other business-related activity. The right business structure will allow your enterprise to operate efficiently and meet your required business targets. In India, every business must register themselves as part of the mandatory legal compliance. Before we learn how to register a company, let’s try and understand the types of business structures in India.

Comparative List of Different Types of Business Structures in India

Here is a comparative list of the popular business structures in India.

Company typeIdeal forTax advantagesLegal compliances
Limited Liability PartnershipService-oriented businesses or businesses that have low investment needsBenefit on depreciationBusiness tax returns to be filed ROC returns to be filed
One Person CompanySole owners looking to limit their liabilityTax holiday for first 3 years under Startup India Higher benefits on depreciation No tax on dividend distributionBusiness returns to be filed Limited ROC compliance
Private Limited CompanyBusinesses that have a high turnoverTax holiday for first 3 years under Startup India Higher benefits on depreciationBusiness tax returns to be filed ROC returns to be filed An audit is mandatory
Public Limited CompanyBusinesses with  a high turnoverTax exemptions under Business tax returns to be filed. Mandatory Audits

What are the types of business structures in India?

Let’s try and understand the types of business structures available in India. Here is a list of some of them:

One Person Company (OPC)

Recently introduced in the year 2013, an OPC is the best way to start a company if there exists only one promoter or owner. It enables a sole proprietor to carry on his work and still be part of the corporate framework.

Limited Liability Partnership (LLP)

An LLP is a separate legal entity where the liabilities of partners are only limited only to their agreed contribution. An LLP is established under the Limited Liability Act, 2008 with the Registrar of Companies (ROC).

Private Limited Company (PLC)

A PLC in the eyes of the law is regarded as a separate legal entity from its founders  It has shareholders (stakeholders) and directors (company officers). Each individual is regarded as an employee of the company.

Public Limited Company

A Public Limited Company is a voluntary association of members which is incorporated under company law. It has a separate legal existence and the liability of its members are limited to the shares they hold.

You can choose what business structure suits your business needs best and accordingly register your business.

Other forms of business structures include Sole proprietorship, Hindu Undivided Family,  and Partnership firms. Please bear in mind, that these structures do not come under the ambit of company law. 

Why is it important to choose the right business structure?

It is important to choose your business structure carefully as your Income Tax Returns will depend on it. While registering your enterprise, remember that each business structure has different levels of compliances that need to be met with. For example, a sole proprietor has to file only an income tax return. However, a company has to file an income tax return as well as annual returns with the Registrar of Companies.

A company’s books of accounts are to be mandatorily audited every year. Abiding by these legal compliances requires spending money on auditors, accountants and tax filing experts. Therefore, it is important to select the right business structure when thinking of company registration. An entrepreneur must have a clear idea of the kind of legal compliances he/she is willing to deal with.

While some business structures are relatively investor-friendly than others, investors will always prefer a recognised and legal business structure. For example, an investor may hesitate to give money to a sole proprietor. On the other hand, if a good business idea is backed by a recognised legal structure (like LLP, Company, etc) the investors will be more comfortable making an investment.

How to choose a business structure while applying for company registration in India?

Let’s take a look at some important questions every entrepreneur must ask himself before he/she finally decides upon a business structure.

  • How many owners/partners will your business have?

If you are a single person who owns the entire initial investment required for the business, a One Person Company would be ideal for you. On the other hand, if your business has two or more owners and is actively seeking investment from other parties a Limited Liability Partnership (LLP) or Private Limited Company would suit you best.

  • Should your initial investment determine your choice of business structure?

If you want to spend less initially, it would be wise to go in for a Sole Proprietor, or HUF or Partnership firm. But, if you are sure that you will be able to recover the setup and compliance costs, you can opt for a One Person Company, LLP or a Private Limited Company

  • Willingness to bear the entire liability of the business

Business structures like sole proprietor, HUF, and partnership firm have unlimited liability. This means, in case of any default in loans, the entire money will be recovered from the members or partners in profit sharing ratio. The risk to personal assets is high in these cases.

Whereas, Companies and LLPs have a limited liability clause. This means that the liability of its members is restricted to the amount of contribution made by them or the value of shares each member holds.

  • Income Tax Rates Applicable to businesses

The income tax rates applicable to a sole proprietorship and a HUF are the normal slab rates. In the case of a sole proprietorship, the business income is clubbed with the individual’s other income. But in the case of other entities like partnership firms and companies a tax rate of 30% is applicable.

  • Plans of getting money from investors

As mentioned earlier, it is difficult to get investments when your business structure is unregistered. Entities like LLP and Private Limited Company are trusted when it comes to investment. Make sure you choose the right structure, seek the help of an expert so that you register under proper guidance.

How to Register a Company in India?

Registering a company in India is now a simple 4-step process-

How to Register a Company in India?

Step 1: Digital Signature Certificate (DSC)

As the registration process of the company is completely online, Digital signatures are required to file the forms on the MCA portal. DSC is mandatory for all the proposed directors and the subscribers of the Memorandum of Association (MoA) and Articles of Association (AoA).

DSC can be obtained from government recognised certifying authorities. The list of such certified authorities can be accessed here. DSC can also be obtained online in just two days from here. Class 3 category of DSC must be obtained by the directors and subscribers of MoA and AoA.

Step 2: Director Identification Number (DIN)

The Director Identification Number (DIN) is an identification number for a director and it has to be obtained by anyone who wants to be a director in a company. The DIN of all the proposed directors of the company along with the name and the address proof are to be provided in the company registration form. DIN can be obtained while filing the SPICe+ form, i.e. company registration form. 

SPICe+ is a web-based company registration form, through which DIN can be obtained for a maximum of three directors. If there are more directors in the company and they do not have a DIN, the company can be incorporated with three directors and it has to appoint new directors later on after incorporation. The appointed directors can obtain DIN by filing the DIR-3 form since only the proposed directors of an existing company can apply for DIN in the SPICe+ form.

Step 3: Registration on the MCA Portal 

To apply for company registration, the SPICe+ form is to be filled out and submitted on the MCA portal. To fill out the SPICe+ form and submit documents, the director of the company has to register on the MCA portal. After registration, the director can log in and will obtain access to the MCA portal services which include filing e-forms and viewing public documents.

The company must also reserve its name by submitting two proposed names in the Part-A of the SPICe+ form. The reservation of the name is essential because if the company name is similar to the name of an existing/registered company, LLP, trademark or it contains words prohibited under the Companies (Incorporation Rules) 2014, the SPICe+ form will get rejected.

If the SPICe+ form gets rejected due to non-approval of the company name, the applicant has to re-file another SPICe+ form for the reservation of a new name by paying the prescribed fee. However, after the approval of the name filed in Part-A of the SPICe+ form, it will be reserved for a period of 20 days within which the company must fill Part-B of the SPICe+ form and submit the form online. The applicant must provide the details of the company and directors in the Part-B of the SPICe+ form, attach documents, attach DSC, check the form and submit it.

Step 4: Certificate of Incorporation

Once, the registration application is filled and submitted along with the required documents, the Registrar of Companies will examine the application. Upon verification of the application, he will issue the Certificate of Incorporation of the Company.

The Certificate of Incorporation is issued with PAN and TAN as allotted by the Income Tax Department. An electronic mail with a Certificate of Incorporation as an attachment along with PAN and TAN will also be sent to the applicant.

With this, we have covered the basics of how to register a company.

Documents required for Company Registration

The general documents that are to be submitted for registration of LLP, One Person Company, Private Limited and Public Limited Company are as follows:

Documents of the Directors and Shareholders of the company/ Partners of the LLP

  • Proof of identification of all the company’s directors and shareholders (partners in case of LLP). Any one of the below documents can be submitted as proof of identification:
    • Pan card
    • Aadhar card
    • Driving license
    • Passport 
  • Proof of address of all the directors and shareholders (partners in case of LLP). Any one of the below documents can be submitted as address proof:
    • Latest telephone bill (not older than 2 months) 
    • Latest electricity bill (not older than 2 months)
    • Bank account statement having address 
  • DIN (DPIN in case of LLP) and DSC of all the directors (partners in case of LLP)

Documents of the Company/LLP

  • Proof of registered office of the company. The below documents must be submitted as address proof of the company:
    • Tenancy/rental agreement between the landlord and company/LLP
    • Letter or NOC from the landlord of his/her permission to use the office/premises as the LLP’s/company’s registered office. 
    • Sale deed of the company/LLP office premises in the name of the company/LLP
  • The Memorandum of Association (MoA) which contains the objects of the company for which the company is going to be incorporated and the liability of the members of the company.
  • The Articles of the Association (AoA) which lays down the by-laws on which the company will operate.

For more details about documents required for incorporating a One Person Company, read our article on documents required for one person company registration.

For more details about documents required for incorporating a Private company, read our article on documents required for private limited company registration.

For more details about documents required for incorporating a Public company, read our article on documents required for public limited company registration.

For more details about documents required for incorporating an LLP, read our article on documents required for LLP registration.

How ClearTax Helps in Simplifying Company Registration Process?

With ClearTax, you can establish your company seamlessly in just 10 days (subject to departmental approvals). Our company registration package includes:

  • Name approval of your company
  • Obtaining DIN for two directors
  • Filing SPICe+ form
  • Payment of Stamp Duty for authorized capital up to Rs.1 lakh except for the states of Punjab, Madhya Pradesh and Kerala
  • Issuance of Incorporation Certificate along with PAN and TAN
  • Opening of current account for your company

The company registration from ClearTax is completely online and thus, you can save time and money as you do not have to visit our office. Plus, you can register your company in just 4 simple steps, which are:

Step 1: Purchase the plan

Purchase our company incorporation plan that suits you the best. You can even chat with our experts by entering your email, phone number and clicking on the ‘Request a Callback’ button. You can also contact us by sending an email with your queries at enquiries@cleartax.in. Our experts will contact you and clear all your queries.

Step 2: Upload the documents to our website

Upload the required documents on our website. The uploaded documents are will be stored safely in our vault and 100% privacy is maintained.

Step 3: Document verification by our experts and signature of documents

Our experts will verify the documents uploaded by you. You will need to attest your signature on the documents. 

Step 4: Our experts will file the form on the MCA portal 

Our experts will file the company incorporation form on behalf of you on the MCA portal. After the company incorporation form is filed on the MCA portal, the ROC and the respective departments will verify the forms submitted by our expert. The verification process takes around 10 days (subject to departmental approval and reverts from the respective departments). 

Our experts will follow up with the respective authorities till you receive the Incorporation Certificate. After the verification process is complete, you will receive the Incorporation Certificate along with PAN and TAN in about 10 days.

Checklist for Company Registration

  • Minimum number of directors/partners, which are as follows: 
    • Minimum of one director for OPC 
    • Minimum of two directors for PLC
    • Minimum of  three for Public Limited Company
    • Minimum of two partners for LLP
  • Minimum number of members in a company, which are as follows:
    • Minimum of one member for OPC
    • Minimum of two members for PLC
    • Minimum of seven members for Public Limited Company
  • DSC for all designated directors/partners.
  • DIN for all directors of a company/DPIN for all designated partners of LLP.
  • Name of the company/LLP, which is not similar to any existing name of a company, LLP or trademark.
  • Authorised capital in case of an OPC, PLC or Private Limited Company.
  • Capital contribution by the partners of the LLP, in the case of LLP.
  • MoA and AoA in case of an OPC, PLC or Private Limited Company.
  • LLP agreement between the partners, in the case of LLP.
  • Proof of registered office of the company/LLP.

What is the Cost of Company Registration?

Plan amount for OPC Registration – ₹6999*

Plan amount for LLP Registration – ₹6999*

Plan amount for PLC Registration – ₹7999*

* Prices shown above may vary. Please click here to contact our experts for complete pricing details.

Cost of Public Limited Company Registration – Rs.10,000 – 30,000*

*The cost varies depending on the authorised capital, professional fees, stamp duty and the number of directors and members.

Benefits of Company Registration in India

A company registration provides many advantages. A licensed company makes it genuine and enhances the business’ credibility.

  • Protects against personal obligation, and defends against other threats and losses.
  • Builds goodwill and also supports more customer attraction
  • Gives reliable investors bank credits and good investment with ease.
  • Provides cover of the responsibility to protect the company’s assets
  • Bigger commitment to wealth and greater stability
  • Increases the ability to develop and grow large

For a detailed understanding of the advantages of obtaining a company registration, read our article on the Advantages of Company Incorporation.

Name and Capital of the Company

  • Selection of Company Name

The name of the company should be proposed in the Form SPICe+ 32 application. Only one preferred name along with the significance of keeping that name can be given in the Form SPICe+ 32 application.

The type of entity and one proposed name for the company is to be entered for reserving the name of the company. The proposed name should not be similar to the existing name of any company or LLP or Trademark. If the name gets rejected, another name can be submitted by applying another Form SPICe+ 32 application and paying the prescribed fees. 

An OPC should have the name in the form of “XYC (OPC) Private Limited”. Similarly, a private company should have the name in the form of “XYZ Pvt. Ltd.” and a public company name in the form of “XYZ Limited”.

  • Capital of the company

There is no requirement of minimum paid-up capital to start a private limited company or a one-person company. However, the public limited company must have a minimum paid-up capital of Rs.5 lakh.

The paid-up capital means the amount of money a company has received from shareholders in exchange for shares of the company. It is created when a company sells its shares in the market directly to investors, usually through an Initial Public Offering (IPO).

The authorised capital of any company must be Rs.1 lakh. The authorised capital means the maximum amount of share capital that the company is authorised by its Memorandum of Association to issue to its shareholders. The authorised capital must be mentioned in the MoA.

Compliances to be followed by the Company

Once, the company is registered there are certain compliances to be followed by the company annually. The company needs to follow compliances such as the Company is required to appoint its first auditor within 30 days of incorporation In the first board meeting. Every company must conduct a minimum of 4 board meetings during the calendar year at stipulated intervals.

It has to maintain and file of profit and loss account, annual return and balance sheet every financial year together with an auditor’s report before the due date with the Registrar of Companies. Every company is required to maintain certain Statutory Registers.

For more details about compliances to be followed by the company, read our article on Compliances under the Companies Act 2013.

The company needs to file certain annual forms with the Registrar of Companies. Details of all forms along with the due date of filing these forms are given in our article ROC Compliance Calendar.

Summary

Company registration involves a lot of processes. Before registering a company one should decide on the structure of the company, i.e. if the company is to be registered as an OPC, LLP, PLC or Public Limited Company. After deciding on the structure, the company name must be decided and the directors of the company need to obtain DIN and DSC before applying for company registration. 

After choosing the company name and obtaining DIN and DSC, the company registration form must be filed on the MCA portal. The SPICe+ form, i.e., the company registration form, must be filled, and the required documents must be uploaded and submitted online on the MCA portal along with the prescribed fees. After verification of the SPICe+ form, the ROC will issue the company incorporation certificate. The incorporation certificate is proof of registration of the company and the company will come into existence as a separate legal entity.

Frequently Asked Questions on Company Registration

Where can I register my company?

If you intend to register a new company in India, you must submit an application to the Ministry of Corporate Affairs (MCA). You make the application online at the MCA portal remotely too. For registration, you’ll need a Digital Signature Certificate(DSC), and Director Identity Number(DIN), among other things.

What happens if my company name is already taken?

The Ministry of Corporate Affairs (MCA) maintains a record of registered company names, you’ll have to access that directory and check if your company name is already registered. If the company name appears in the company registration directory, you’ll have to choose another name. If you have already made an application, you’ll have to make another application for a different name that is previously not registered.

Can a foreign national be a director of a company?

Yes, as per the Indian company law, a foreign national can be a director of a company registered in India. However, he must fulfil all the criteria laid down in the Act. The most important being allotment of a Director Identification Number (DIN).

Any person, including a foreign national, appointed as a Director cannot act in the capacity of a Director unless he/she gives it formally in writing. This can be done by filing Form DIR-2 within 30 days of being appointed as the director.

How many days does it take to register a company?

The new changes brought about by the MCA have made it easy to register companies of any nature with the government. Provided that you have all your documents in place, it can take anywhere between 10 – 15 days to register your company formally.

Is a physical presence of a person needed for company registration?

The entire process is completed online, so you don’t have to be present at any particular place for registration. A scanned copy of the documents must be submitted via mail. At the business address, they receive the company incorporation certificate from the MCA.

How do I check if my company is registered or not?

You can check the status of the company registration on the MCA website. To check the status of your company, you need to go to the ‘MCA Services’ tab and select the ‘View Company/LLP Master Data’ from the drop-down list. Then enter the company’s CIN and click ‘Submit’. The exact status of your company will be displayed.

Is the company registration process completely online in India?

Yes, the company registration is completely online. A company or an LLP can be registered only through the MCA portal. The scanned documents of the company/LLP are sent by mail to the MCA and they are processed at the Central Registration Centre (CRC) which acts as a dedicated back office for Company and LLP Registration process. Upon completion of registration, the company/LLP receives a digitally signed Certificate of Incorporation which can be verified by all the stakeholders on the MCA website.

Does a private limited company have continuous existence?

Yes. Since a private limited company has perpetual succession, it has continuous existence. Perpetual succession means a company will continue to be a legal entity irrespective of the death of the founder/promoter or any director of the company. Thus, a company will be in existence until it is dissolved for the reasons stated in the Companies Act, 2013 or until the Board and shareholders decide to wind up or close the company.

Is it necessary to have a company’s books audited?

Yes. Every company, whether private or public or one person company, must mandatorily conduct statutory audits of its books. The company must get its book audited every year from the auditor of the company and the audit report must be submitted by the auditor to the Board before conducting the company AGM.

What are articles of association and memorandum of association?

The articles of association lays down the internal rules and regulations of the company. It consists of the appointment of directors, audit and accounts, borrowing powers, winding up process, etc. The memorandum of association contains the five essential details about the company, which are company name, registered office, liability of members, object for which the company is formed and capital details. The articles of association are subordinate to the memorandum of association of a company. 

Can the director of a private limited company be a salaried person?

Salary is not directly provided to a director of a private limited company. However, the Companies Act, 2013 provides that directors can be given remuneration by the company. Remuneration means any money or its equivalent given to the director for the services rendered by him. Thus, the salary provided to a director will be known as remuneration provided by the company for the services rendered by him/her.

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