How to Start a Company
Believe it or not, but every one of us have thought of owning a business at least once in our life. The reason for this could vary.
For some it is a passion, for some it is because of some unique idea in mind and for some it could be because of the frustration from the current job.
However, the harsh reality is not all of us take the risk of starting our own business, mostly because of the fear of failure or lack of money.
If you are reading this article, it means you have already overcome your fear and ready to take the first step towards your dream, ie incorporating your Company.
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So, without any further ado, let me give you step by step details, which I followed to incorporate callnall.com. Before I start, a piece of advice.
If you don’t feel confident with the steps mentioned here, please seek a professional assistance so as you don’t waste much time in registration process.
So here are all the steps to incorporate a company:
- Obtain Digital Signature Certificate (DSC): – A company must have at least two members to start. All the members must have a valid Class III DSC before applying for company registration.
So far you must have decided that who are going to be the founding members, so you know how many DSCs you will need. A simple google search will show you all the vendors near you with whom you can apply for DSC.
- Register DSC with MCA: – Once you have got your DSC, you need to associate your DSC in the website of Ministry of Corporate Affairs (MCA). Simply go their website and associate your website as an Authorized Representative.
Please remember that once your company is registered and you have received your DIN (we will see this in later steps), you will need to again associate your DSC on MCA website, but this time as Director.
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- Create an MCA Account: – Now go back to MCA website and create an account. For all the documents to be submitted, you will need an MCA account.
- Fill Online Forms: – The next step is to fill an online form for company incorporation, after you log in to MCA portal. Please note the below points for filling the form.
- Name: At this point you must have finalized name for your business. So, at the beginning of the form you will be urged put a name for your company.
- You will have to run a quick check to see if the name is available. If available, you will have two options. First, submit the name request right away and fill the rest of the form after name approval, or second, submit the name approval along with the rest of the form
- Forms: All the applicable forms are filled online. The forms to be filled are
- SPICe+ : This form will contain name request in Part A. You will also need to create a small document to give a rational behind the proposed name.
In Part B you will need to fill all the information about company and the members, like names, address, authorized share capital, subscriber capital etc.
The same will be used to apply for the Direction Identification Number (DIN) for the first directors of the company along with the PAN/TAN application.
In this form you will also see a computation of stamp duty, based on your state, that will be paid at the time of submission of form. This form will be digitally signed by the main applicant and a practicing CA, CS or CMA.
- SPICeMoA: If you already have prepared a Memorandum of Association (MoA) for your company, then you don’t need to fill this form. If not, you can choose a standard MoA format based on the type of your company, available on the MCA portal itself. The form must be digitally signed by all members and a practicing CA, CS or CMA.
- SPICeAoA : Just like MoA, you can also choose Article of Association (AOA) from the options available on MCA portal.
This should also be digitally signed by all members and a practicing CA, CS and CMA.
- AGILEPRO : This is another mandatory form which is used to apply for current bank account opening, ESI/EPF registration, professional tax registration and GST registration.
Although it is mandatory to register under ESI/EPF at the time of registration but you don’t need to comply with their rules until you have crossed threshold limit of number of employees that triggers the applicability of these two. GST registration through this form is optional.
- SPICeINC9: This is a self-declaration by directors and must be digitally signed by them.
All these forms will need to be downloaded before putting digital signatures.
- Supporting Documents: Following documents will need to be attached along with the application. These documents will be attached in SPICe+ Part B.
- Identity and address proofs for all member, which includes PAN, Adhaar, passport, driving license, bank statement, etc.
- Address proof for company’s registered address: This will include property ownership papers, rent agreement etc.
- Utility bills like electricity, water, gas etc., where the name owner of property should be there.
- NOC from property owner to allow the usage of property as registered address of the company.
- Submit the Forms and Pay Fees: Once you have all the forms ready, you just need to submit them. After the submission you will need to pay the statutory fees as computed in SPICe+ form. Once paid, you will be given an application number to trace your application.
If all the documents are in order, your company will be registered as fast as in 24 hours or may be sooner. Congratulations, you are the owner of a company now. Now you need to focus on the business.
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Just a word of caution. When I registered for callnall.com, I didn’t get my GST registration for over one month.
So, I made a separate application on GST portal and received the GST number with 7-10 days. The application made via AGILEPRO was actioned only after five months and I filed for cancellation as I already had a GST number.
I would advise you to apply for GST number separately in stead of AGILEPRO if you are expecting your GST transactions to start soon as without GST number you won’t be able to claim GST input.
How to Start a Business in India: A Simple, Step-by-Step Guide
Himanshu Joshi is a member of Institute of Chartered Accountants of India and Chartered Institute of Management Accountants (London).
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He has worked in the field Finance and Accounts for over 14 years. He is the founder of UKPG Tech Pvt Ltd, the parent entity of callnall.com.