A Simple Guide to Company Registration in India
Selecting the appropriate business model is a strategic step that can actually influence the direction in which your venture takes you into this vital Indian market. Easy and direct control is provided by a sole proprietorship, but in a partnership, tasks would be split among owners. If there is potential for expansion in the near future, then a Limited Liability Partnership or a Private Limited Company would be advisable to limit liability. OPC is ideal for individual companies. Consider your goals and resources; and let Bizpole assist you!
Understanding the Legal Rules
Choosing the right business structure forms the foundation of company registration in India. This serves as a momentum that will be carried all the way through to even possible closure, ensuring that your business runs square and transparently. This serves as a momentum that will be carried all the way through to even possible closure, ensuring that your business runs square and transparently
Choosing the Proper Business Structure
Before you get the registration process underway, you must decide the correct business structure. Some of the common ones include:
- Limited Liability Partnership
Best Suited For: Service-based businesses that require flexible partnerships.
Legal Requirements:
Minimum Partners: 2 (No upper limit).
Designated Partners: At least 2, one must be a resident of India.
LLP Agreement: Must define roles, profit-sharing, and management.
DIN (Director Identification Number) & DSC (Digital Signature Certificate) for designated partners.
Annual Compliance:
- Annual Return (Form 11)
- Statement of Accounts & Solvency (Form 8)
- Income Tax Return
Audit Requirement: Only if turnover exceeds ₹40 lakh or capital contribution exceeds ₹25 lakh.
Tax Benefits: LLPs are taxed at 30% (plus cess), but no separate tax on profits distributed to partners other than TDS.
-
Private Limited Company
Best Suited For :
Startups and growing businesses planning to raise investment (VCs, Angel Investors).
Businesses needing a formal structure with a professional image.
Companies aiming for scalability and long-term expansion.
Entrepreneurs looking to separate personal and business liability.
Legal Requirements :
Minimum Directors: 2 (Maximum 15).
Minimum Shareholders: 2 (Maximum 200).
Registered Office Address: Mandatory.
DIN (Director Identification Number) & DSC (Digital Signature Certificate) for directors.
MOA & AOA: Define company’s objectives and internal rules.
Annual Compliance and Audit are Mandatory, regardless of turnover
Tax Benefits :
Tax holidays for three years under the Startup India policy.
Tax rates are starting from 22%
-
One-Person Company
Best Suited For :
Solo entrepreneurs wanting full control with limited liability.
Freelancers or consultants who want a corporate structure.
Small businesses planning to scale gradually.
Individuals who prefer a company structure over a proprietorship for better credibility.
Legal Obligations:
Single Shareholder: Only one person can own the OPC (must be an Indian resident).
Nominee: Mandatory to appoint a nominee who will take over in case of the owner’s death/incapacity.
Director: The owner can act as the sole director, but an OPC can have up to 15 directors.
Registered Office Address: Mandatory.
DIN (Director Identification Number) & DSC (Digital Signature Certificate) required.
Annual Compliance:
- Annual Return (Form MGT-7A)
- Financial Statements (Form AOC-4)
- Income Tax Return
Audit: Mandatory, even if revenue and sales are Nil.
Tax Benefits:
Corporate Tax: 22% (plus surcharge and cess) under the new regime.
Deductible Expenses: Business expenses like rent, salaries, depreciation, marketing costs, etc.
Carry Forward Losses: Allowed if the ownership remains unchanged.
Startups (recognized by DPIIT): OPCs can also avail tax holidays and other startup benefits
-
Public Limited Company
It is the best option for companies that intend to raise funds from the public.. Tax benefit can be received through several tax exemptions.
Legal Requirements:
- Minimum Directors: 3 (No maximum limit).
- Minimum Shareholders: 7 (No maximum limit).
- Registered Office Address: Mandatory.
- DIN (Director Identification Number) & DSC (Digital Signature Certificate) required for directors.
- Prospectus: Mandatory to issue when raising capital from the public.
- MOA & AOA: Must define company objectives and internal rules.
- Statutory Compliance:
- Annual Return (Form MGT-7)
- Financial Statements (Form AOC-4)
- Income Tax Return
- Board meetings: Minimum 4 meetings a year.
- Statutory Audit: Mandatory, regardless of turnover.
- Secretarial Audit: Required if turnover exceeds ₹250 crore or paid-up capital exceeds ₹50 crore.
Tax Benefits:
- Corporate Tax: 22% (plus surcharge and cess) under the new regime.
- Deductible Expenses: Salaries, depreciation, rent, marketing, R&D costs, etc.
- Capital Raising Benefits: Easier to attract investors and raise funds via IPO (Initial Public Offering).
- Carry Forward Losses: Allowed with ownership continuity.
Key Considerations:
- High Compliance Costs: More regulatory requirements and strict governance rules.
- Loss of Control: Founders may lose majority control if too many shares are issued to the public.
- Increased Transparency: Financials and operational data become public records.
- Credibility & Access to Capital: Easier to raise funds from banks, investors, and the public.
Comparison
| Structure | Best For | Legal Requirements | Tax Benefits |
| Limited Liability Partnership (LLP) | Professionals, service businesses, and SMEs needing flexibility | Minimum 2 partners, LLP agreement, annual returns & audit (if turnover > ₹40 lakh or capital > ₹25 lakh) | No DDT, partner’s share exempt, deductible business expenses |
| One Person Company (OPC) | Solo entrepreneurs need limited liability and a corporate image | 1 shareholder, 1 nominee, mandatory annual compliance and audit | Corporate tax at 22%, deductions on business expenses, tax holidays for eligible startups |
| Private Limited Company (Pvt Ltd) | Startups, high-revenue, and investor-funded businesses | Minimum 2 shareholders, 2 directors, annual filings, statutory audit | Corporate tax at 22%, deductions on business expenses, tax holidays for eligible startups |
| Public Limited Company (PLC) | Large businesses seeking public investment and expansion | Minimum 7 shareholders, 3 directors, statutory & secretarial audit, public disclosures | Corporate tax at 22%, easier access to public funds. |
Steps to Register Your Company
Once you’ve chosen your structure, follow these simple steps to register your company with Bizpole:
- Reserve Your Company Name:
Use the SPICe+ Part A form to make sure your desired name is unique and follows the rules. - Get a Digital Signature Certificate (DSC):
This is needed to sign documents that you will submit to the Ministry of Corporate Affairs (MCA).
- Prepare Memorandum and Articles of Association (MOA & AOA):
- MOA: States the goals of your company.
- AOA: Lists the rules for managing your company and is required for legal compliance.
- Submit the Application Form:
Submit the application with required documents and information after affixing DSC. - Receive Your Certificate of Incorporation:
Once the MCA checks your documents, you will get your Certificate of Incorporation, which includes your Company Identification Number (CIN), PAN, and TAN.
Continuous Compliance after Registration
After registering your company, there are several compliance tasks to follow. Some of these are for instance appointing an auditor, filing annual returns, and tax compliance. Non-compliance may end up costing your company its legality and threatening relationships with clients. Bizpole can help you go through all the compliance requirements smoothly, therefore ensuring your business remains in good standing.
Starting your venture in India is both exciting and full of potential. With countless opportunities and experiences that shape the foundation for your new venture, understanding legal requirements and business structures provides you with a much stronger basis for your dream company.
Bizpole makes the registration process easy and manageable. Step confidently into the business realm—your registration is just the beginning!
