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How to start a Company in India and its benefits?

September 16, 2010

With the Indian economy going great guns and poised to measure up to the other Asian tiger, China, India, with the world’s second largest population, is the toast of the world. More and more business owners and corporate houses from the world over are setting up shops in India in a bid to take advantage of the surge in her economy and the large chunks added to her formidable middle class. This section has the purchasing power and is growing by the day.

START a COMPANY in India: www.IndiaCompanyLtd.com

Primarily, for company formation and registration in India, get the draft Articles of Associations and Memorandum prepared as you bring in the application money and get the directors appointed. You need to have at least 2 directors for a private limited company registration. You can form a company by going to the website of the MCA (Ministry of Corporate Affairs in India) at: http://www.mca.gov.in by paying a fee of INR 500 to register a private or a public limited company’s name as the first step.

After you get the name approved, you need to submit Form 23 along with a Board resolution copy and pay the registration fees. Fees are dependent on the share capital and to get an incorporation certificate, fill out Form 1B. Once you log in to the MCA website, the process and guidelines are simple and easy to follow. Form 32 needs to be filled out for appointment of directors and Form 18 for address proof. After you complete these formalities, you can get the incorporation certificate within a month’s time.

Form 2 needs to be submitted to RoC for share allotment and Form 5 in the event of an increase in share capital. You can submit forms online at the MCA website with digital signatures of the authorized signatories. Director Identification Number or DIN forms can be easily downloaded from the site, filled out and sent to the Noida office of the MCA.

The director has to notify the details of the DIN by filling out a DIN 2 form and for informing the RoC, it requires a DIN 3 form. After completing all these formalities your company is established, but you need to complete some other registrations for doing business in India. After the incorporation procedure, your company needs to get a TIN or a taxpayer’s identification number and a CST number from the website of the Commercial Tax Office.

For companies that are into the services industry, registration for service tax is necessary. You can do that at the website of the Central Excise Commissioner or at http://www.servicetax.gov.in. You would need a PAN number for the company permanent account number for income tax purposes by submitting both Forms 49A and 49B and you can check out their website for details.

For tax deduction at source, you would need a TAN or company tax deduction account number from the income tax department. If your company would be involved in import and export, you need to get an import export code number or an IE number.  There are steps to go about it and you can check the website http://www.ap.nic.in/jdgft/iec.htm for details about getting it done. It is primarily important for any business that your company wants to do in overseas trade. It is applicable both for import and export trade.

Patent registrations can be done at the office of the Controller of Patents, Designs and Trademarks with the help of Form TM1 at ipindia.nic.in. You have to pay INR2500 as fee for a ten year validity of patents. It is only after you get the trademark that you can use the R symbol on the brands that you manufacture or market in India.

From all financial transactions, you need to open a current account with a bank and share certificates can be issued by submitting Form 2. For filling up physical forms, get rubber stamps made of your company.  From transparency with shareholders, get an agreement done.

To conclude, one must not forget to acquire all the requisite documents from the MCA for running the company. To mention these documents would have Memorandum of Association, Articles of association and Incorporation Certificate.

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