Author - Associate Kantika Mukherjee
The definition of ‘Company’ signifies an enterprise which is formed under the Companies Act, 2013. The procedure of company registration relies upon the type of the company, which can be a Private Limited Company or Partnership Firm, Limited Company or Sole Proprietorship.
Partnership Company is quite similar to a sole proprietorship. The main difference between partnership and sole proprietorship is that more than one individual is involved in a partnership. There is a legal partnership agreement where the roles, duties and the share of each partner are explicitly defined. Thus, the profit earned by the company is shared among partners according to the legal partnership agreement, and if there are losses, every partner is personally responsible.
Documents required for the registration:
The Statement should be signed by all the partners of the corporation and need to be verified by affidavit in a specified manner.
There are two types of Partnership businesses, registered and unregistered Partnership firm. It is not obligatory to register a Partnership firm; though, it is advisable to register a Partnership firm owing to the added advantages. Partnership firms are created through drafting a Partnership deed amongst the Partners.
The Limited Liability Partnership is a separate legal entity from the partnership entity, in which the business assets are separate from the personal assets of the partners. The personal assets of partners are not put at danger. In case the business experiences losses, as the maximum legal responsibility of every partner is defined by his share capital in the entity.
Documents required of partners:
Documents required of LLP:
Obtaining Digital Signature Certificate (DSC) for the Partners
For getting DIN (Director Identification Number or Designated Partner Identification Number) for the Partners of the LLP, a Digital Signature Certificate (DSC) is needed. Therefore, a Digital Signature Certificate for the proposed Partner should first be obtained.
Obtaining Director Identification Number for the Partners
Once, Digital Signatures are received for the Partners, application for Director Identification Number (DIN) could be made. DIN registration commonly takes place immediately and in a few cases, additional documents are required to be submitted towards the DIN Cell for approval of the DIN application. DIN as well as DPIN are synonymous and could be used interchangeably. Each individual could have only one DIN.
Obtaining Name Approval
Once two DPIN’s are available, application for reservation of name could be made towards the MCA. It is vital for the promoters to remember the LLP Naming Guidelines and propose appropriate names for the LLP in the application, to make certain a speedy approval. Once, the application for reservation of name has been submitted towards the MCA, it would be processed through the Registrar of Companies (ROC) in the State of Incorporation.
When the name approval application is accepted through the MCA, an LLP name approval letter would be issued to the proposed Partners. The Partners then have 60 days for filing the required incorporation documents as well as register the LLP. If the LLP is not formed within 60 days of name approval letter, the approval for a name for the LLP shall have to be re-obtained.
When filing for the formation of LLP, the documents showing possession of the registered office shall be required. Once prepared, the registered office related documents with the signed subscriber’s sheet should be filed with the MCA for LLP registration in India.
If the application for LLP Registration is acceptable, the Registrar will issue the incorporation certificate. When the incorporation certificate is issued, the LLP would be considered towards being registered and application for PAN for the LLP could be made. The Partners of the LLP then have 30 days’ time for filing the Partnership Agreement of the LLP with the MCA. If the LLP Partnership Agreement is not filed within 30 days, a penalty shall be applicable.
In this form of business, a single individual handles the entire business operation. He is the only individual to enjoy profit and bear loss. There is no specific law that directs sole proprietorship. Proprietors of such corporations have unlimited business liability. This involves that owners personal assets could be attached to meet business liability claims. It is not possible towards transferring the ownership of a Sole Proprietorship from one individual to another.
The documents required for Sole Proprietorship
The following documents required are:
Utility Bill of the business place
KYC documents of the Bank
A license issued through the Shops and Establishment Act
Income Tax Returns of the Proprietor
Any 2 of the documents could be submitted for the Bank Account opening with the Identity and Address Proof of the proprietor.
Applying for PAN. If an individual already has one this step is not needed.
The next step is naming the business.
There is no formal registration needed, but the next step is to open a bank account in the name of commerce.
An individual could also register as a Small and Medium Enterprise (SME) under MSME Act, though not compulsory, it is beneficial towards being registered under the same.
An individual could also register for GST if the turnover goes beyond Rs 20 lakh.
One could also get a Shop and Establishment registration done.
A private limited company is a corporation which is privately held for small businesses. The legal responsibility of the members of a Private Limited Company is limited towards the number of shares respectively held by them. The shares of Private Limited Company are not to be publicly traded. Private Limited Company could be of three types: Company limited by shares; Company limited by guarantee and Unlimited Company
Documents Required For Company Registration
1. Application of DSC and DPIN:
All the partners are required to apply for Digital signature and DPIN. The digital signature is an online signature utilized for filing and DPIN refer to Directors PIN number issued through MCA.
2. Name approval:
The partners need to provide 3 different options for the corporation name to MCA of which one would be selected. Names provided must ideally be unique and suggestive of corporation business.
3. MOA and AOA submission:
After the name is approved, applicants are required to draft Memorandum of association as well as Articles of Associate.
4. Get the incorporation certificate:
It usually takes 15- 25 days to form a Private limited company and obtain the incorporation certificate. Incorporation certification is evidence that the corporation has been created. It also includes the CIN number.
5. Apply for PAN, TAN and Bank account:
An applicant then needs to apply for PAN and TAN. PAN and TAN are received in seven working days. After this, the applicant could submit the Incorporation certificate, MOA, AOA and PAN with a bank to open a bank account.
Thus, it could be said that in India, every business should register themselves as part of the compulsory legal compliance. However, registering a business name is a vital step and it offers a variety of protections.
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