Registering your company is an easy task to do. You can do this by following these easy steps given below:
Firstly, you have to get a Digital Signature Certificate if you do not have one. It is a form which is issued by government. For that, the person has to visit registration authority to confirm their identity.
Then apply for Digital Identification Number which can be obtained in 2 ways:
- For the people who want to be the director of a new company they must fill the for SPICe. However, only 3 directors can apply for this.
- This is the process who wants to be the director of that company which already exists. For this, they have to fill the form DIN3 and should have identity proof like Aadhar card, Pan card etc.
Next comes the step of applying for your organization’s name, but before applying you must keep few points in your mind that are:
- The name which is undesirable for Central Government’s opinion can’t be registered.
- The name of the company must end with limited if its liability is limited. Also, it should end with private limited if the business is private.
- The name which is chosen for the business must not be similar to any other organization.
The person should also apply for Personal Account Number (PAN) and Tax Deduction and Collection account number (TAN).
Documents required to apply for registration:
- Affidavit on a stamp paper.
- You should provide proof of your office address; rental agreement is preferred.
- You also have to provide a certificate of approval if anything in the name of your business requires it.
- NOC (No Objection Certificate) should also be provided by the owner.
- Address proof of the owner is also required.
Private Limited Company (PLC)
A private limited company is a business organization which is controlled by a small group of people. Under the company act, 2013 these types of organization the liability of owner depends upon the shareholders and the it can have only 50 shareholders at maximum. It is also preferred a lot for the startups as it offers an opportunity and growth because of its structure. They can also avail the various funding options like Private equity, ESOP and more.
Types of Private Company:
- Capital based: As the private companies can be registered with or without capital, the companies which have some capital with them comes under the section of the Memorandum of Association of the company
- Liability based: Most of the private companies have limited liability although it’s their choice to have limited or unlimited liability. This means the liability of the members either can be limited in number or unlimited.
- One Person Company: These are the companies who have only one shareholder and are not willing in sharing the rights.
Advantages of Private Limited Company:
- It has less chance of loss of personal assets because the liability is limited. It simply means that the individual is responsible for the same amount of liability that he has contributed in.
- As the Private Limited Company is a separate entity from its owner, so the creditors and debtors can only take legal action on companies’ assets and can’t do anything for personal assets of owner.
- It is an easier task for the owner to sell equities of the company and raise the fund without increasing any liability.
- It provides you ‘Perpetual succession’ feature which means the business is uninterrupted by the death or exit of a member. It continues with the current members without any legal procedure.
- The reliability of the company also increases as the details of the company are already registered to Ministry of Corporate Officers (MCO).
Disadvantages of Private Limited Company
- The registration process of Private Limited Company is a lengthy process and might take 10-15 days to complete.
- As Private Limited Company minimum demands for at least 2 persons, so the sole ownership of the company is lost.
- It requires lot of conformance to be done after the company is incorporated. Some of them are:
- Board meetings should be held regularly.
- Also, general meeting needs to be conducted on a regular base.
- It becomes necessary for them to get their accounts audited.
- They have to maintain records for all of their monetary transactions to submit it to the Ministry of the Corporate offices every year.
Winding up of the Private Limited Company requires a lot of time and money to be invested.
Public Limited Company
A Public Limited Company is a company that allows general public to purchase their shares and has limited liability. As its liability is limited, so they are not responsible for any loss occurred to them. They are required to have at least 5 lakh rupees for paid up capital. They release prospectus for the public holding its share which shows information regarding everything going on with the company.
Eligibility criteria setup for Public Limited Company
- Among all the directors it’s necessary for one to be the resident of India
- Other than the directors, it’s necessary to have 7 members in the company
- It should have a unique name
- It does not require any minimum capital but it does require share capital of 5 lakh rupees
Documents required for registration
- Identity proof for both citizens of India as well as of foreign members
- Address proof of all the directors
- You also have to provide the address proof of your office
- Other then all of these you also have to submit NOC and DCS
Advantages of Public Limited Company
- Public Limited Company is more reliable and trustworthy for the investors which led to increase in their credibility.
- One of the major benefits that it has is they do not have to pay high amount of income-tax.
- Initial Public offerings helps Public Limited companies to complete the capital requirement required by them.
- As these companies have a lot of members so the probability of loss is almost nill.
Disadvantages of Public Limited Companies
- They have lot of restrictions and can’t work independently.
- The owner doesn’t have much of the rights due to the vast range of shareholders.
- Very small amount of Profit is given due to the increase in number of ownerships.
- They have to show all the financial books to common people.
One Person Company
One-person company is company which has only one member as its shareholder. These types of companies are formed when the founder is only one. Several entrepreneurs prefer OPCs due to the advantage given to them. While registering it’s necessary for them to register a nominee also and as there is only one member so it does not promote perpetual succession. As it’s in the hand of Nominee to accept or decline the proposal of sole member after the death of owner.
Its registration process is no different from the other way of registering company as it’s a part of Private Limited Company.
Minimum requirements for One Person Company
- It at least required one person who will act as member and shareholder
- There should be 1 nominee
- You don’t need any minimum share capital
- A confirm registered place for OPCs
Advantages of One Person Company
- OPC does not have a lot of agreement burden and are provided with some exemptions.
- OPC is organized sector of the company due to the only 1 member. This allows the company to invite more banking facilities.
- Despite being an OPC, it allows them to have a limited liability. This is one of the major reasons why early business startups are OPC.
- They don’t have to conduct board or general meetings.
- All the bank institution prefers to give loans to the OPC then the proprietorship business.
- In the OPC complete control of all the powers is in the hands of owner.
Disadvantages of One Person Company
- As there is only 1 member it becomes hectic sometimes to control all the things.
- This type of business is only suitable for small scale.
- It can’t invest in anyplace other than banking institutions
- One Person Company does not have perpetual succession, so the nominee will be in charge of the company only after the owner retires or in case of his death.
- A person can’t register more than one company and nominee can also not be registered in any other company.
It is a type of organization in which the main motive of business is to earn profit with minimum 2 members. The member of the firm is individually known as Partner, so the firm is called Partnership Firm.
Features of the Firm:
- It can have minimum 2 or maximum 10 members to start the organization.
- There is a written agreement which is signed by all the members. The agreement has information regarding the profit of shares, responsibility of liability etc.
- The registration of firm is not necessary but still advised to deal with the future conflicts.
- The ratio of profit and loss is decided by the members only.
- The company has unlimited liability and all the members are responsible for all the debts and losses.
- If a partner wants to take a decision, he/she first requires having the consent of all the partners.
Advantages of Partnership Firm
- As the registration is not necessary, so the forming a Partnership Firm is an easy task to do.
- Just because more than one person is responsible for the company, it has a large number of resources.
- Managing the firm becomes easier because the whole work load is not on only person and is distributed equally to all of them.
- The risk of loss is not on one person and is divided to all the members according to the ratio.
- As it does not have a large number of members, so all the partner have flexibility in operation. They can change any police in the company anytime with the permission of all the members.
Disadvantages of Partnership Firm:
- There is not much stability in the organization, any members’ death or retirement can even cause dissolution of the firm.
- Since the liability is unlimited of the partners so, for covering the debts and losses can even cause them to risk their own property.
- As all the members have equal right in the company, so if there is distrust among the partners it can lead company in heavy losses.
- Maximum number of members allowed is 10 so the capital is very limited.
- One of the major disadvantages of Partnership Firms is it does not have a legal status.
Limited Liability Partnership (LLP)
It’s a type of partnership where the liability of some or all the members is limited. The partners in LLP are not responsible for any other partners’ mistake. They are different from other Partnership Firms because of their limited liability. According to Limited Liability Partnership Act, 2008 partnership and partner is a separate legal entity
Features of the Firm
- There is a similar trait to the company that is it’s also a separate legal entity.
- To start an LLP there is no minimum capital requirement.
- To start the LLP needs minimum 2 members but there is no maximum limit. The organization has choice to hire as many members as they want.
- All companies, be private or public, needs to get their account audited but this rule does not apply on LLP.
Advantages of Limited liability Partnership
- It has a lot of flexibility and can change or amend their rules anytime.
- LLP can also make 2 companies work under them.
- Personal assets of the partners are at no risk because of the limited liability.
- It completely depends upon the partners how to increase the funds or utilize them.
- All the people of professional degree like CA, CS and doctors likes to be part of Limited Liability Partnerships.
Disadvantages of Limited Liability Partnership
- As the company has to submit its financial accounts to the company house which can disclose the income of each member.
- You have to collect all the profit in the same financial year and can’t save for the future.
- One of the major disadvantages is, if the LLP is formed with only 2 person and one decides to leave the partnership the company will be dissolved. This is the reason why always minimum 5 partners are preferred for partnerships.
- Personal details, like address, are registered with Company office. If any individual claims for the address of any member it will be provided, which may not be promoted by some partners.
Sole proprietorship refers to a form of business organization which is owned, managed, and controlled by an individual. This type of business style is best suited for small scale and where the customers demand personalized services and artistic goods. This business form is not extensive which means it does not fluctuate in price and demand drastically.
Features of Sole proprietorship
- The business is completely managed by a single person.
- It does not require lengthy legal process to start the business and if the owner wants to close it, it’s also an easy process.
- It has unlimited liability so in case if business losses, if the business assets are not sufficient to meet all business liabilities, the proprietor may have to sell his personal property.
- As it’s a Sole Proprietorship, the owner has to bear all the losses and enjoy all the profits by himself.
- The control of the company is only in the hands of owner. He can do whatever he wants without anyone else’s consent.
- Law states that business and the owner are not separate legal entity.
- Since there is only one owner and manager, if something happens to him the business might get closed.
Advantages of Sole Proprietorship
- The decision-making process is very easy because of the single person
- There is no chance for leak of information of the company.
- The process for making closing the company is easy.
- The profit is not to be shared with anyone so, owner gets all of it.
- The owner has more flexibility in decision making process.
Disadvantages of Sole Proprietorship
- Since the owner is an individual so the amount of resources is limited.
- The business is not long running as it will be closed after the death of the owner.
- Sole proprietors might also have to sell their own assets in order to fill the losses occurred because of the unlimited liability.
The owner has to manage everything in the company like purchasing, financing, selling, accounting etc.
The producer company smoothens the process of making co-operative business as companies and to convert the existing co-operatives into companies. It is also said to be the business body of farmers to expand their business and live a good life. According to the Companies Act, 1953 minimum 10 individuals or 2 institutions can form a producer company whose aim is one of the following:
Activities that can be done by Producer Company
- Processing the products of its members
- Sale, supply or manufacture of any of the members’ equipment.
- Educate producer members on them on mutual assistance.
- Covering the process of produce or producer.
- Promoting the methods of mutuality.
- Taking care of the welfare of members.
- Any other service that promotes mutual assistance or helps the members.
Advantages of Producer Company
- The members will receive the amount for the products and services supplied as per decided by the directors.
- The members will be entitled to the profit in the ratio of their shares.
- They get many facilities provided by the banks.
- They are also entitled to the many tax benefits.
Disadvantages of Producer Company
- They do not have enough capital to be invested.
- The members are also mostly not well educated as most of the farmers included in it didn’t have much exposure to it.
- The management of the company is not well managed as most of the members are uneducated.
- Many members don’t play their duties sincerely.
- Due to many members there is a lack of secrecy.
Permanent Account Number (PAN)
PAN card consists of 10-digit code which consists of both alphabets and number. It is allotted to all the citizens of India who are responsible for paying tax. It’s issued by Income Tax department of India along with the help of NSDL (National Security Depositary Limited) and UTI ITSL. Pan cards can be availed by any type of person who belongs to either one of these categories.
- PAN card for Indian individual.
- PAN card for Indian companies.
- PAN card for foreign individual.
- PAN card for foreign companies.
PAN card issuing started back in the year 1972 under Income Tax act, 1961 and was made a compulsory document for all tax payers in the year 1976.
Eligibility criteria for Applying
All the citizens who are above 18 can apply for PAN card but it’s a necessary document for those who pay tax like:
- The person who is accountable for paying tax.
- Business owners who are getting over 5 lakh turnover every year.
- People who are in the business of import and export and are giving duty tax or any other tax.
- All organizations, trust or association of any type.
How to apply for Pan registration
- Visit the official website of NSDL
- Then select on PAN card
- Fill all the required details like name, age and other things
- After entering your mobile number, it will send an OTP. Enter the OTP and click on submit.
- Then it will open a page asking how you want to submit your documents.
- It will show 3 options that are:
- Submit digitally through E-KYC and E-sign.
- Submit scanned images through E-sign.
- Forward documents physically.
- After selecting the option, you may proceed through the guided way.
- Whichever method you will choose will end at payment. When you have completed the payment, you will receive an acknowledgement number. Through this acknowledgement number you can check the status of your PAN card application online.
If you want to fill offline then you have to visit your areas’ PAN card office and ask for the application. When the application is submitted with required attached documents you will receive the acknowledgement number.
Documents required to apply for PAN card
For address proof:
- Aadhar card
- Driving license
- Passport of the spouse
For ID proof:
- Ration card
- Arms’ license
For Date of Birth proof
- Birth certificate
- 10th or 12th class certificate
Any document from each category is enough to fill the form of PAN card and some identity card may work for all categories like Aadhar card, Voter ID, Driving license and passport..20000
Tax Deduction and Collection Account Number (TAN)
TAN number is 10-digit code consisting of both alphabets and numbers. The TAN is required for all those people who are responsible for deducting or collecting the tax. TAN helps in filing TDS/TCS/Annual Information Returns, payment challans, and certificates.
How to apply for TAN
- Firstly, you have to visit the official website of income tax.
- Select the option ‘register yourself’
- Then on the next screen provide you PAN card number and click on continue.
- Then fill the form and after the registration is completed you will get your TAN number.
After registration how to know your TAN
When your TAN registration is done then you have to follow these steps to know your TAN Number:
- Visit the official website of income tax.
- Select the option ‘Know your TAN’
- Choose the option of deducted and state you are living in.
- Provide your name and an OTP will be send on you registered mobile number.
- After this you can see the TAN.
Difference between PAN and TAN
PAN card is asked to have it by every citizen of India who pays tax. However, the TAN is required for the people who are responsible for deduction of tax (TDS) or collection (TCS).
Partnership (partnership-reg) can be formed orally but it may lead to dispute in future, so registration of the partners is preferred. The registration process is explained below Step by step.
Documents required of Partners
- Pan card of partners
Aadhar card, driving license or any other document as address proof.
Documents required of firm:
- PAN card of the firm. If you don’t have a PAN card you can apply for it on the official website of
- Address proof of the firm. Rental agreement, 1 utility bill1 and NOC from the landlord if the place is rented. If the place is owned by one of the partners then 1 utility bill and NOC from the owner.
Then you have to get created a Partnership deed of 2000 rupees which will be signed by the all of the partners.
Shop establishment registration
Shop establishment registration is not a hard task you just require below listed documents:
- PAN card
- Photo of the shop owner and one photo with shop
- Rent agreement if rented
- 1 utility bill
Document of shop which will be required:
- MOA (Registration Certificate)
- List of the Trustees/Member of Trust
- Registered Address and proof thereof
- Resolution of society regarding starting of business
- List of the Chairman and Member of co-operative society
- List of Directors and Nomination of Directors (Resolution)
- Copy of Registration Certificate given by Charity Commissioner
- Certificate of Incorporation, Commencement Certificate under the corporate act
- Partnership Deed that contains name of partners, signature of partners, name and percentage of partnership
- RBI Permission Copy
- RTO Transport Permit
- Copy of Collector Permission
- License From Agriculture
- Food Licence from concern authority
- The Food and medicines Administration License
- No objection certificate from department of local government for the Cybercafe
- IEC certificate for Import-Export business
- Certificate issued by SEBI for share broker
- Licence from local department for Security Services
- No objection certificate by Municipal corporation for floor mill and masala mill
- Copy of Excise license for wine shop, Beer bar and Restaurant
- No objection certificate from Municipal Commissioner, Fire Brigade, Collector and local department.
FAQs On Business Registration
No, it’s not mandatory to provide the documents while applying for name.
It doesn’t take long you may get it in 4 days after completion on registration process.
Yes, it can be done easily at registrar’s office
Yes, you just must follow the procedures according to Companies act,2013.
It’s allowed for any foreigner to be shareholder of any company.
The maximum limit is of 15 members.
Yes, a foreigner can be one of the directors of company
No, they are not preferred due to the lack of ownership.
No, as it has only one member so the person should be citizen of India.
Yes, it’s necessary
Yes, you can change your Nominee at any time.
Director of the company is responsible for signing the final statement of company.
No, it depends upon the ratio of profit and loss decided among them.
Yes, it has lot risks and the major one of them is that it can even cause termination of company.
The tax is to be paid by the all the partners individually.
Yes, any company whether a private or public can be converted into LLP.
No, a listed company can’t be converted into an LLP.
The profit is counted as the income of owner.
Yes, it can be passed to someone else at the time of the previous owner retiring.
No, it’s not necessary but if the owners want to then he can.
No, as it’s a Sole proprietorship no one can purchase share in it.
There is no maximum limit, company can have any amount of member.
According to Company act, 1953 the producer company was started to promote the business of farmers.
You don’t have to pay any fees for the form but for registration you have to pay 110 rupees.
Yes, you can get it through applying online or visiting the office.
Yes, if you don’t have a PAN card you have to pay 30% tax on you wealth and saving if you don’t have one.
It nearly takes one month.
Yes, you have to pay fine of rupees 10,000.
It is the responsibility of NSDL to provide you TAN.
It contains information like profit-loss ratio, which person is what kind of partner and many other important information regarding them.
It generally takes 3-4 days.
It generally takes 14-15 days to register a shop.
No, it’d different in different state.