In this article we will give you basic information to help you understand the company formation process in India. As such the company formation process is pretty straight forward and can be registered online. It can cost you anywhere from INR 12,000 to INR 20,000 based on the service provider you go with. In most cases the company setup will take 20-30 days and in some major cities it will only take 7 days to set your company up. If the company you are forming is going to be simple, then you can do it yourself. If not we suggest hiring an experienced service provider such as vakilsearch.com or elagaan.com. In any case, below are the steps to form a Private Limited Company in India.
There are 3 basic criteria in forming a Private Limited company in India.
Get a Director Identification Number, also called DIN Number
Each Private Limited Company needs to have at-least 2 Directors and each of the directors need to have a director identification number. In order to obtain a DIN number, you need your passport photo, your bank card and identification with proof of address such as voter's id, passport, drivers licence, etc.
Ensure the Name of your company is approved
Your company name must obey a pre-defined naming guideline. In general it has two parts, the first part is the Unique Name of your organization and the second part spells out the nature of your business. Here are some examples:
Tata Steel Private Limited – Here Tata is the unique name, while Steel implies that they manufacture steel.
Infosys Technologies Private Limited – Here Infosys is the unique name and Technologies imply that this company is in the technology industry.
Submit proof of Registered Address of your business
Registered Office Address must be printed on your certification of Incorporation and must be your headquarters. This can be a rented property or owned by you. If it’s rented, you are required to submit a rental agreement and a no objection letter for your owner. On the other hand, if you own the property then, depending on your jurisdiction you’ll need to submit an electricity bill in your name or a property tax bill or the document detailing the sale of your property in your name in addition to a no-objection letter from you.
Once you have completed the 3 steps, you will be required to submit a memorandum of association (MOA) and article of association (AOA). These documents outline the nature of your business. If you follow these steps, company formation in India is a breeze.
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