What is the process of Business Registration?

1. Choosing the Business Structure:

First, you need to decide the type of business entity you want to establish. Common types include

1. Sole Proprietorship

2. Partnership

3. Limited Liability Partnership (LLP)

4. Private Limited Company

5. One Person Company (OPC).

Breakdown:

Sole Proprietorship: A business owned by a single individual where there's no distinction between the owner and the business.

Partnership: A business owned by two or more individuals sharing profits and liabilities.

LLP: A partnership where some or all partners have limited liabilities, protecting personal assets from business debts.

Private Limited Company: A business entity owned by shareholders with limited liability and a separate legal existence from its owners.

OPC: A company with only one member who acts as both the owner and director, with limited liability.

2. Obtaining a Digital Signature Certificate (DSC):

For companies and LLPs, DSC is a requirement for filing registration forms electronically. It's a secure digital key that certifies the identity of the holder.

Breakdown:

DSC stands for Digital Signature Certificate. It is a secure digital key that certifies the identity of an individual, business, or website. It ensures the security and authenticity of documents submitted electronically.

3. Acquiring Director Identification Number (DIN):

For registering a company, every director needs to have a DIN. It's a unique identification number

Breakdown:

DIN is a unique number assigned to an individual who is appointed as a director of a company, ensuring that every director has a unique identity and legal status.

4. Filing for Name Approval:

You must propose a unique name for your company or LLP and file for approval with the Ministry of Corporate Affairs (MCA) through the RUN (Reserve Unique Name) service. The proposed name should not match or closely resemble the name of an existing company or LLP.

Breakdown:

The Ministry of Corporate Affairs (MCA) is a government body in India responsible for administering the country's corporate affairs, including the regulation and governance of corporations and businesses.

RUN, or Reserve Unique Name, is a service provided by the Ministry of Corporate Affairs (MCA) in India.

5. Drafting Memorandum of Association (MOA) and Articles of Association (AOA):

For a company, these are the primary legal documents. MOA states the objectives for which the company is formed. AOA lays down the rules and regulations for the internal management of the company.

Breakdown:

MOA: A legal document that outlines the fundamental conditions upon which a company is allowed to operate.

AOA: A document that specifies the regulations for a company's operations.

6. Registration with the MCA:

Submit incorporation forms and documents, including details of the company's registered office, directors, and shareholders, to the MCA. This is the official process of getting your company registered with the government’s company registry.

7. Obtaining a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN):

After incorporation, you need to apply for PAN and TAN for tax purposes.TAN is required for businesses deducting or collecting tax at source.

Breakdown:

PAN is a unique 10-character alphanumeric identifier used for all financial transactions and tax purposes. A 10-digit alphanumeric number issued to entities that are required to deduct or collect tax on payments made by them under the Indian Income Tax Act, 1961.

8. Opening a Bank Account:

Open a bank account in the name of your business to handle financial transactions.

A business bank account separates your finances from your business transactions.

9. Goods and Services Tax (GST) Registration:

If your turnover exceeds a certain threshold or if you’re involved in inter-state supply, you must register for GST.

Breakdown:

Goods and Service Tax (GST) is a comprehensive indirect tax levied on the supply of goods and services in India.

For Goods: The threshold for mandatory GST registration is a turnover exceeding ₹40 lakhs (₹40,00,000) in a financial year. However, for special category states (like North Eastern States, Himachal Pradesh, Uttarakhand, and Jammu & Kashmir), this limit is ₹20 lakhs (₹20,00,000).

For Services: The threshold is ₹20 lakhs (₹20,00,000) across India. In special category states, the same threshold of ₹20 lakhs applies.

10. Additional Registrations and Licenses:

Depending on your business type, additional registrations like Shop and Establishment Act License, Professional Tax, Import Export Code, FSSAI license for food businesses, etc., may be required. These are specific permits and licenses for operating in certain sectors or regions, complying with the local laws and regulations.