How to Register a Startup in India- A Step-by-Step Guide!

India is the new ecosystem for startups and budding entrepreneurship, in 2022 alone DPIIT recognized over 26 thousand startups in India. This shows that the people of India are ready to get out of the regular 9-5 culture and start something new and something of their own. The journey of starting a startup begins with an idea, but the actual materialization of your business will happen when you have registered it and can begin your operations. And it’s here in the registration process many entrepreneurs become confused but don’t this whole article is here to explain to you how to register a startup in India. So, let’s get started

Types of Companies Under the Companies Act, 2013

The Companies Act of 2013 provides incorporation, regulation, and company winding-up information. Under this Act, you can register various types of companies in India. Each type of company has its unique features, ownership structures, and legal requirements.

The following are some types of companies under the Companies Act of 2013:

1. Private Limited Companies
2. Limited Liability Partnerships
3. Partnerships
4. Proprietorship Companies
5. Public Limited Companies
6. One-Person Companies

Obtaining a Director Identification Number (DIN), a Digital Signature Certificate (DSC), and submitting the required paperwork to India’s Ministry of Corporate Affairs (MCA) are all steps in the process of registering a business under any of these categories.

1. One Person Company (OPC)

One Person Company (OPC) is a type of private company that needs only one Director for incorporation. OPCs are ideal for sole proprietors who want to enjoy the benefits of an LLP. The registration process for an OPC is like that of a private limited company.

OPCs have certain limitations, such as:

1. The inability to raise funds through public offerings.
2. The need to convert to a private limited if the company’s turnover exceeds a certain limit.

2. Private Limited Company (Pvt. Ltd.)

A Private Limited Company (Pvt. Ltd.) is the most common type of company registered in India. It is a company that has two to 200 Directors. Only the owners of a Pvt. Ltd. have ownership status. Its shares cannot be traded or made available to the public.

Pvt. Ltd. companies are ideal for small and medium-sized businesses. Unlike LLPs, Pvt. Ltd. companies have certain advantages over other types of companies. They have a separate legal entity status and can raise funds from investors.

3. Public Limited Company (PLC)

A Public Limited Company (PLC) has seven or more shareholders. The total number of stakeholders is unlimited. Shares of a PLC are available to the public. It can raise capital from the public through an initial public offering (IPO).

PLCs are subject to more regulatory requirements than Pvt. Ltd. companies. They have certain advantages over other types of companies. PLCs can raise large amounts of capital, thus, attracting a wide range of investors.

3. Others

1. Section 8 companies: These are non-profit organizations. They promote art, science, commerce, education, religion, charity, and causes.
2. Producer companies: These need 10 or more shareholders. They engage in agriculture, animal husbandry, or any other similar activities.
3. LLPs: These are hybrid entities that combine the features of a Pvt. Ltd. and a partnership. LLPs have the advantage of limited liability. They also enjoy the status of a separate legal entity and the flexibility of a partnership.

Eligibility Criteria to Register a Startup

How to register a startup in India? The company must be a “Business Entity.” The company must be registered as one of the following:

1. Private Limited Company
2. Partnership Firm
3. Limited Liability Partnership (LLP)
4. One Person Company (OPC)
   Proprietorship and Public Limited Companies are not eligible to register as startups.
5. The age of the company must be less than 10 years old. Biotechnology startups must be under 15 years old.
6. It must have an annual turnover of less than Rs. 100 crores in any preceding financial year.
7. It must focus on innovation, technology, commercialization of new products or services, and intellectual property.
8. It must be certified by the Inter-Ministerial Board (IMB) and set up by the Department of Industrial Policy and Promotion (DIPP).
9. It must be capable of scaling, generating employment, and creating wealth.
10. It must be registered in India with at least 50% of its shares held by Indian residents.
    Once registered as a startup, companies can have access to various government benefits and incentives.

Documents Required to Register a Startup

For startup registration in India, you must submit the following documents to the authorities:

1. Director Identification Number (DIN)
   A DIN is a unique identification number allotted to a director of a company. All directors must get a DIN before registering a company.
2. Digital Signature Certificate (DSC)
   A DSC authenticates the identity of a person who signs an electronic document. At least one of the company’s directors should have a valid DSC.
3. Memorandum of Association (MoA)
   The MoA is a legal document that sets out the company’s constitution and objectives. It must have the signatures of all subscribers to the company’s share capital.
4. Articles of Association (AoA)
   The AoA is a legal document defining the company’s internal management and operations. It must have the signatures of all the subscribers to the company’s share capital.
5. PAN Card
   A PAN card is a mandatory document for all directors of the company.
6. Address Proof
   You must submit the company’s registered office address proof. This includes the electricity bill, telephone bill and lease agreement.
7. Identity Proof
   Identity proof of all directors, such as a passport, Aadhaar card, or voter ID card, must be submitted.
8. Certificate of Incorporation
   In case of existing incorporation, submit a copy of the Certificate of Incorporation.
9. Tax Registration
   The company must register for tax, such as GST, if applicable.

Ensure that all the mandatory documents are complete and accurate before submitting. This will help avoid any delays or rejections in the registration process.

How to Register a Startup in India?

How to register a startup in India can be a daunting task, but following the right procedure can make it a hassle-free process. The following is a step-by-step guide on how to register a startup company in India:

Step 1: Acquire a Digital Signature Certificate (DSC)

With a DSC, you can file documents online for company registration for startups. The process to get a DSC is as follows:

1. Visit the website of a government-approved agency that issues DSCs. These could include eMudhra, Sify, and NSDL.
2. Submit the required documents, such as identity and address proofs.
3. Complete the verification process.
4. Once the verification process is complete, the applicant receives their DSC.

Step 2: Acquire a Director Identification Number (DIN)

Each director of the company needs a unique Director Identification Number (DIN). The process for a DIN is as follows:

1. The director needs to fill and file Form DIR-3 on the MCA portal.
2. Along with the form, submit the directors’ identity and address proofs.
3. Once approved, the director receives the DIN.

Step 3: Register on the MCA Portal

The next step is to register the company on the MCA portal by filling out the required forms. The process to make a new registration on the MCA portal is as follows:

1. Log in to the MCA portal and click on “New User Registration”.
2. Enter the required details, such as name, email address, and mobile number, and submit the form.
3. Once registered, you will receive the login credentials in your registered email address.

Step 4: Acquire an Incorporation Certificate

Once approved, the Registrar of Companies (RoC) issues an Incorporation Certificate. It is a legal document that certifies that the company is registered. The process to receive the Incorporation Certificate is as follows:

1. Submit the MoA and the AoA on the MCA portal.
2. The Registrar of Companies (RoC) will verify the documents and approve the application.
3. Once the application is approved, the Incorporation Certificate will be issued. Thus, the company is registered.

Registering a Startup in India Made Easy

Registering a startup in India requires careful planning and attention to detail. It can take many weeks to finish the procedure. Although time-consuming, establishing a company is worth the wait. The steps outlined in this article can help entrepreneurs set up their startups. You can follow these steps and do a bit more research on other necessary information related to your niche of startup.

Innovative, low-investment ideas for the hidden entrepreneur in you! Explore our guide on Business ideas.

Read Related Reads:
How to Register A Company In India: A Step-by-step Comprehensive Guide
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The Rise in Entrepreneurship: Top 10 Startups in India

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