Before converting the business proprietorship to a private limited company, one should have substantial knowledge about How to register a company in India. Most of the entrepreneurs get huge enthusiasm for starting their business, but what they often lack is the knowledge about rudimentary legalities that could be fatal in the future if not handled properly at the very start. Whenever you start to venture into a journey of entrepreneurship, registering your company is worth considering. Some steps are mentioned below that you should follow to register your company.
Conversion of Sole Proprietorship
Most of the entrepreneurs set up their businesses with Sole Proprietorships, as a sole trader or partnership business, personal assets of the proprietor or partners are at risk in the event of a failure of the business, but this is not the case for a Company. A corporate form of organization has its separate legal entity hence, in case of any unfortunate events like business failures, etc., the personal assets of the businessman are always secure.
Another important characteristic of a private limited company is perpetual succession. It is a popular saying that the directors may come and go, the members may come and go, but the existence of a company remains forever. Hence in order to grow their business, a company form of entity has always been the first choice for the entrepreneurs.
In order to avail the benefits offered by Corporate form of entity entrepreneurs tend to convert their entities into Companies, this conversion of a sole proprietorship to a company requires an agreement that has to be executed between the two entities to sell the business, at the terms as may be agreed between the parties.
How to Set Up a Pvt. Ltd. Company in India?
The newly introduced procedure of company registration provides ten different services, which are –
- Name Reservation
- DIN allotment
- Incorporation of a new company
- Profession Tax (in Maharashtra)
- Bank Account Opening
Therefore, in a way, it does save a lot of time, cost, and procedures for starting a private limited company registration.
Anyways, let’s get back to our six golden steps of beginning your life as an entrepreneur. Let’s get started.
Digital Signature Certificate
Before you do anything else, the first thing, which you need to acquire to start your own company, is the DSC (Digital Signature Certificate) of the Director and Subscribers to MOA.
You can obtain the DSC from the Certifying Authorities. However, before you do so, make sure to keep your original supporting documents (passport-size photo, PAN card, Address proof, etc,) as well as some self-attested copies of them.
Giving an Application for Name Approval
Once you are done with the DSC procedure, then you will have to make an application in the Form SPICE + A. It will help you to reserve a distinctive name for your organization. The new sections that have been included in the form are –
- Type of the company
- Class of the company
- Category of the company
- Subcategory of the organization
- The main division of the industrial activities of the company
- Analysis of the main division
- Particulars of the Proposed Name (a maximum of two)
Filling Up of the Online Form SPICE + Part B
After the Name has been approved, you will have to fill up the Form SPICE + Part B. Here, you will have to provide all the fundamentals with respect to the Director and Promoters of the company, it’s Registered Office, and Share Capital details. Alongside this, you would also have to apply for PAN and TAN for your organization. After scrutinizing and submitting the form online, you’ll have to fill up four new forms, which are – INC – 9, Agile Pro, Spice AOA, and Spice MOA.
The INC-9 form, which mainly deals with the shareholders and the directors, is generated automatically with all the complete details through Form Spice Part B.
Submitting Form Agile Pro
With this form, you can apply for the registrations under EPFO, GST, Bank Account Number, ESIC, and Professional Tax. Keep in mind that the registration under Bank Account opening, EPFO, and ESIC is mandatory with company registration. Nonetheless, the Professional Tax Registration will only be mandatory if your company has a registered office in Maharashtra. Lastly, GST registration is optional.
The submission of Form Agile Pro will be verified by an OTP, which will be sent on the registered mobile number and e-mail ID. Once this step of private limited company registration is over, you will, then, move on to the next step, which is SPICE AOA and MOA.
e-MOA and e-AOA
The Form of INC-33 caters to MOA (Memorandum of Association), while the INC-34 Form refers to AOA (Articles of Association). The MOA of an organization mainly talks about its scope of operations. On the other hand, AOA states how the company will carry the operations while following the laid Act.
It is actually one of the easiest steps in private limited company registration. However, keep in mind that the MOA and AOA need to be physically signed if the company has any foreign subscribers.
Summing Up Everything
After you have submitted all the forms thoroughly, you will, then, download them, affix the DSCs on each of them, and upload them together as linked forms. So, these are the steps that you need to follow to finish your private limited company registration in a proper and correct manner.