Do you want to open a new business? You need to go through a sequence of steps to get your business incorporated. There are documents to sort and laws to follow. Then there’s the GST filing to take care of! The company formation process can get complicated as there so are many stakeholders involved.
Solving the challenges of company formation, GST registration, and GST filing is not always easy. Although the GoI has simplified the rules and paperwork to a large extent, navigating them is still difficult. Don’t take on the headache of doing it all alone.
In this comprehensive guide, we’ll talk about everything you need to know about company formation and GST filing – the stakeholders, the laws, the business documents, and how the company incorporation process actually works.
Business Regulators
There are two major regulators who help you establish your business. These stakeholders are important because they give your business a legal standing. Their approval is mandatory for you to conduct business operations in India.
Here are the major business regulators:
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Ministry of Corporate Affairs
This is the ministry that regulates corporate affairs in India. Your business registration file has to be approved by the MCA to start your business. Along with business registration, the ministry also helps in resolving corporate disputes.
It implements laws like –
- The Companies Act, 2013
- The Companies Act,1956
- The Competition Act, 2002
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Registrar of Companies (RoC)
This office under the Ministry of Corporate Affairs is the implementing arm of the MCA. It provides the ‘Incorporation of business certificate’ to a company. All companies wanting to do business in India have to register themselves with the RoC.
RoC implements the provisions of the Companies Act and other associated Acts.
Laws and regulations
Multiple laws and regulations dictate the terms and conditions of registering a business. However, there’s one overarching legislation that matters the most.
If you’re in the company formation process, you only need to know about the following two laws and rules:
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Companies Act, 2013
This is the guiding legislation for all businesses in India. It details provisions on:
- Business registration
- Corporate management
- CSR activities
- Entity filing
- Penalties for misconduct
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Companies (Incorporation) Rules, 2014
These govern the incorporation of businesses under the Companies Act, 2013. It lists how to incorporate an OPC, application process, conversion of companies, name registration, and registered office.
Guide to Company Registration
Here is a step-by-step guide to company registration.
Company Name
Registering the company name is the first step in the company formation process. Here’s what you need to know as per the above two laws –
- Your company name must be unique. It shouldn’t resemble existing ones
- No plural versions of your existing companies
- No changes are allowed in the letter case, spacing, or punctuation marks
- You can’t translate existing company names to create a unique name
- No joining of two or more words in the existing name to create a new company name
- If your company has the words -bank, stock exchange, mutual fund, or insurance – you need separate approvals from the respective regulatory body
Pre-registration documents
After the name, comes the need to get your documents ready. Here are the documents needed to register your business in India:
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DSC
Under the Information Technology Act, 2000, you can authenticate your company documents online with digital signature certificates.
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DIN
The Director Identification Number is a unique number given to the directors of a company. You have to fill out the Simplified Proforma for Incorporating a Company Electronically (SPICe) form to get this number assigned to your directors.
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MoA
The Memorandum of Association (MoA) is one of the most important legal documents. It contains information about your company’s objective and its shareholders. Limit your business activities to your MoA statements.
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AoA
The Article of Association describes the internal rules and regulations of the company.
Business Type
Businesses are differentiated based on: the structure of the firm and the number of people involved. Here are the types of businesses you should know about:
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OPC
This is a one-person company. Only one individual is involved in such a business.
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Self-proprietorship
These are businesses owned by single individuals. There’s no partnership here.
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LLP
These are limited liability partnerships in which one partner is absolved from the misconduct of another partner.
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Private Ltd
This is a privately owned company. Private business owners hold the shares. All profits belong to the company.
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Partnership Firm
This is a firm where two or more partners are involved and divide the profits and shares among themselves.
Online registration
You can proceed with the company registration process when all your documents are ready. Here’s what you need to do when the above-mentioned documents are in order:
Create your account on the MCA Portal: Open the MCA Portal and create a user ID.
Fill out the SPICe+ form: After you’ve opened your account on the portal, fill out the SPICe+ form. Only a director with a relevant DIN can apply.
Submit the documents: You can submit all documents electronically when you’ve filled out the SPICe+ form.
Certificate of incorporation
After submission, your documents go through the scrutiny phase. The RoC office will conduct a thorough assessment of your documents and verify the details. You’ll receive the ‘Certificate of Incorporation’ once the verification and scrutiny is complete. This means your business is successfully registered.
GST Registration
The GST registration is a fairly simple process as you have a single GST portal to deal with. It does take time, however, to get the TRN and to submit all the documents online. Here’s what you need to get your GST registration done successfully:
- Visit the GST portal and go to the Services tab.
- Click on Registration and enter the details under New Registration
- You’ll receive the 15-digit TRN after the registration is complete
- There’s another form called Part B which you’ll have to fill out once you get the TRN
- Part B has 10 sections and each section has to be filled out diligently
- You’ll get the Application Reference Number (ARN) once you’ve successfully filled both parts. This confirms your GST registration.
Conclusion
Things like company registration, preparing company deeds, and filing tax returns can be complex. You need experts to handle the paperwork and documents for your business. Audit Inflo has the most seasoned finance and accounting professionals who take care of all your business needs. Be it preparing legally sound company deeds, company incorporation under the RoC, or GST registration and filing – we make sure your registration is done in time and you can focus on your business.