Home Finance Company Registration in India: Why and How?

Company Registration in India: Why and How?

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Running a business requires more than marketing your products and services to the target audience. Most new entrepreneurs often overlook the legal aspect of things. It is essential to register a business before starting any operations. Now, there are multiple business structures that one can choose from, and it’s vital to choose the right one. Choosing the correct structure can save you a lot of money. A reliable company registration India consultant can help you find the most suitable structure after evaluating your business’s needs, objectives and budget. Read on to learn more about company registration in India.

The need for company registration 

Registering a company to conduct business in India is required by the law. You can’t officially operate a business without registering the same. Different business structures are available to choose from, including Private Limited Company, Public Limited Company, Partnership Company, Limited Liability Partnership, Sole Proprietorship, and One Person Company. There are numerous advantages of registering a company; let’s look at some prominent ones. 

1. Separate legal entity

When you register a company, the legal identity of you and your business is different. A company acts as a separate legal entity. This distinction is a blessing in most cases. A company can sue or be sued as an artificial person. This artificial person has its own rights, assets, liabilities, etc. In case of any significant losses, the business owner’s private assets are not confiscated. 

2. Perpetual succession   

The term perpetual succession is associated with endless existence for incorporated companies. It means a company will continue to exist forever until its legally dissolved. In case of unfortunate events, like the death of a business owner, the company will not cease to exist. 

3. Limited Liability 

A registered company has limited liabilities, meaning the business owners have limited liability with reference to the company’s debt. In case of significant losses, business owners’ liabilities will be confined to the face value of shares owned. It will not affect their personal assets or gains in any way. In some cases, business owners might sign an unlimited liabilities agreement. 

4. Branding 

If you want to create a sustainable business, it’s essential to focus on branding. Registering your business is a mandatory step for creating a renowned brand. Brand recognition can help to build a long-term and profitable business. 

5. Transfer of ownership 

Registering a company makes it easier to transfer ownership. The shareholder of a company can freely transfer their shares to anyone. A signed copy of the share transfer form and a share certification is needed to allocate the ownership. At times, situations can demand a transfer of ownership and registering a business makes it highly convenient. 

How to register a company in India?

Registering a company in India is mandatory if you want to start business operations. There are different parameters that need to be considered before registering a business. Let’s quickly look into what all needs to be done to register a company. 

1. Choosing the right business structure 

As discussed earlier, there are various business structures in India. Each has its pros and cons. Therefore, evaluating the advantages and disadvantages is crucial to choosing the right structure. Some critical factors to consider to find a suitable business structure include the number of owners, initial investment, income tax rates, liabilities, etc. 

2. Obtaining the Digital Signature Certificate (DSC)

Once you have decided on the business structure, it’s time to obtain the DSC. The digital signature certificate is needed to authenticate and verify company documents. It’s basically the digital version of physical signatures. The Ministry of Corporate Affairs lists DSC certifying authorities from where one can obtain the DSC. 

3. Name approval filing 

It is crucial to check for the availability of the company name. You will have to find alternatives if a different business already uses the proposed name. 

4. Obtain DIN and file for incorporation 

Obtaining the Director Identification Number (DIN) is the next step in the company registration process. The DIN is a unique identification number offered to the prospective directors of a company. The final step is to file for incorporation using the SPICe forms and other supporting documents. 

Final words
A company registration India consultant can smoothen the registration process. They can help you find the best fit depending on your business’s needs and objectives.

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