How to Register a Startup in India: A Step-by-Step Guide

India has rapidly become a thriving ecosystem for startups and budding entrepreneurs. In 2022 alone, the Department for Promotion of Industry and Internal Trade (DPIIT) recognized over 26,000 startups across the country. This surge in entrepreneurial activity reflects a growing desire among Indians to break free from the conventional 9-to-5 work culture and venture into creating something new and unique.

The journey of launching a startup begins with a compelling idea, but turning that idea into a tangible business requires official registration to start operations. However, many entrepreneurs find the registration process daunting. This article is here to guide you through the step-by-step process of registering a startup in India, ensuring that you can focus on building your business without unnecessary confusion. Let’s dive in and explore how to register your startup in India.

How to Register a Startup in India: Types of Companies

The Companies Act of 2013 provides incorporation, regulation, and company winding-up information. Under this Act, you can register various types of companies in India. Each type of company has its unique features, ownership structures, and legal requirements. The process of how to register a startup in India requires knowledge of these specifics to ensure hassle-free registration.

The following are a few types of companies under the Companies Act of 2013:

1. Private Limited Companies
2. Limited Liability Partnerships
3. Partnerships
4. Proprietorship Companies
5. Public Limited Companies
6. One-Person Companies

To register a business under any of these categories, obtaining a Director Identification Number (DIN), a Digital Signature Certificate (DSC), and submitting the required paperwork to India’s Ministry of Corporate Affairs (MCA) is required.

1. One Person Company (OPC)

One Person Company (OPC) is a type of private company that needs only one director for incorporation. OPCs are ideal for sole proprietors who want to enjoy the benefits of an LLP. The registration process for an OPC is like that of a private limited company.

OPCs have certain limitations, such as:

1. The inability to raise funds through public offerings.
2. The need to convert to a private limited if the company’s turnover exceeds a certain limit.

2. Private Limited Company (Pvt. Ltd.)

A Private Limited Company (Pvt. Ltd.) is the most common type of company registered in India. It is a company that has 2 to 200 Directors. Only the owners of a Pvt. Ltd. have ownership status. Its shares cannot be traded or made available to the public.

Pvt. Ltd. companies are ideal for small and medium-sized businesses. Unlike LLPs, Pvt. Ltd. companies have certain advantages over other types of companies. They have a separate legal entity status and can raise funds from investors.

3. Public Limited Company (PLC)

A Public Limited Company (PLC) has 7 or more shareholders. The total number of stakeholders is unlimited. Shares of a PLC are available to the public. It can raise capital from the public through an initial public offering (IPO).

PLCs are subject to more regulatory requirements than Pvt. Ltd. companies. They have certain advantages over other types of companies. PLCs can raise large amounts of capital, thus, attracting a wide range of investors.

3. Other Categories

1. Section 8 Companies: These are non-profit organizations. They promote art, science, commerce, education, religion, charity, and social causes.
2. Producer Companies: These need 10 or more shareholders. They engage in agriculture, animal husbandry, or other similar activities.
3. LLPs: These are hybrid entities that combine the features of a Pvt. Ltd. and a partnership. LLPs have the advantage of limited liability. They also enjoy the status of a separate legal entity and the flexibility of a partnership.

How to Register a Startup in India: Eligibility Criteria

How to register a startup in India? The company must be a “Business Entity.” The company must be registered under the following criteria:

1. Private Limited Company
2. Partnership Firm
3. Limited Liability Partnership (LLP)
4. One Person Company (OPC)
5. Proprietorship and Public Limited Companies are not eligible to register as startups.
6. The age of the company must be less than 10 years old. Biotechnology startups must be under 15 years old.
7. It must have an annual turnover of less than Rs. 100 crores in any preceding financial year.
8. It must focus on innovation, technology, commercialization of new products or services, and intellectual property.
9. It must be certified by the Inter-Ministerial Board (IMB) and set up by the Department of Industrial Policy and Promotion (DIPP).
10. It must be capable of scaling, generating employment, and creating wealth.
11. It must be registered in India with at least 50% of its shares held by Indian residents.

Once registered as a startup, companies can have access to various government benefits and incentives.

How to Register a Startup in India: Documents Required

To register a startup in India, you must submit the following documents:

1. Director Identification Number (DIN): A DIN is a unique identification number allotted to a director of a company. All directors must get a DIN before registering a company.
2. Digital Signature Certificate (DSC): A DSC authenticates the identity of a person who signs an electronic document. At least one of the company’s directors should have a valid DSC.
3. Memorandum of Association (MoA): The MoA is a legal document that sets out the company’s constitution and objectives. It must have the signatures of all subscribers to the company’s share capital.
4. Articles of Association (AoA): The AoA is a legal document defining the company’s internal management and operations. It must have the signatures of all the subscribers to the company’s share capital.
5. PAN Card: A PAN card is a mandatory document for all directors of the company.
6. Address Proof: You must submit the company’s registered office address proof. This includes the electricity bill, telephone bill, and lease agreement.
7. Identity Proof: Identity proof of all directors, such as a passport, Aadhaar card, or voter ID card, must be submitted.
8. Certificate of Incorporation: In case of existing incorporation, submit a copy of the Certificate of Incorporation.
9. Tax Registration: The company must register for tax, such as GST, if applicable.

Ensure that all mandatory documents are complete and accurate before submitting. This will help avoid any delays or rejections in the registration process.

How to Register a Startup in India?

The process of how to register a startup in India can be a daunting task, but following the right procedure can make it a hassle-free process. The following is a step-by-step guide on how to register a startup company in India:

Step 1: Acquire a Digital Signature Certificate (DSC)

With a DSC, you can file documents online for company registration for startups. The process to get a DSC is as follows:

1. Visit the website of a government-approved agency that issues DSCs. These could include eMudhra, Sify, and NSDL.
2. Submit the required documents, such as identity and address proofs.
3. Complete the verification process.
4. Once the verification process is complete, the applicant receives their DSC.

Step 2: Acquire a Director Identification Number (DIN)

Each director of the company needs a unique Director Identification Number (DIN). The process for a DIN is as follows:

1. The director needs to fill and file Form DIR-3 on the MCA portal.
2. Along with the form, submit the directors’ identity and address proofs.
3. Once approved, the director receives the DIN.

Step 3: Register on the MCA Portal

The next step is to register the company on the MCA portal by filling out the required forms. The process to make a new registration on the MCA portal is as follows:

1. Log in to the MCA portal and click on “New User Registration”.
2. Enter the required details, such as name, email address, and mobile number, and submit the form.
3. Once registered, you will receive the login credentials in your registered email address.

Step 4: Acquire an Incorporation Certificate

Once approved, the Registrar of Companies (RoC) issues an Incorporation Certificate. It is a legal document that certifies that the company is registered. The process to receive the Incorporation Certificate is as follows:

1. Submit the MoA and the AoA on the MCA portal.
2. The Registrar of Companies (RoC) will verify the documents and approve the application.
3. Once the application is approved, the Incorporation Certificate will be issued. Thus, the company is registered.

Startup Registration Benefits

• Startups are exempt from paying income taxes for three years if they obtain Inter-Ministerial Board (IMB) certification.
• Startups can qualify for government tenders since they are free from the ‘previous experience/turnover’ requirement.
• Startups registered under the Startup India scheme can self-certify their compliance with nine labor and three environmental legislation.
• Startups approved by DPIIT can list as sellers on the Government e-Marketplace, India’s largest e-procurement platform.
• Startups can readily raise funds from investors, including Venture Capitalists (VCs) and Angel Investors.
• Startups can process patents and other intellectual property rights for a far lower charge.

How to Register a Startup in India: Key Takeaways

The process of how to register a startup in India requires careful planning and attention to detail. It can take many weeks to finish the procedure. Although time-consuming, establishing a company is worth the wait. The steps outlined in this article can help entrepreneurs set up their startups. You can follow these steps on how to register a startup in India to begin your journey to success. do a bit more research on other necessary information related to your niche of startup.

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