Company Formation in India | Company Registration - Smartcorp
                     COMPANY FORMATION IN 
INDIA
Company formation, the benefits one attain after registering the 
company is discussed in this article in a simpler way.
• Company formation is the most common types of legal entity 
in India. The word “company "refers to a business organization 
that makes, buys, or sells goods or services in exchange for 
money. Before registering your business you should come to a 
clear idea about what kind of business you are doing. Then, 
while registering your firm, we should remember that each 
business that its own structure and also has different levels of 
amenability that an organisation should meet. For instances, a 
sole proprietor should file only income tax return, even 
though the company has to file an income tax returns as well 
as annual returns with the registrar of companies. The account 
of the company should be maintained regularly and audited 
every year.
• Chiefly, it is important to select the right 
business structure while doing company 
registration. An entrepreneur should be 
well –known about the legal compliance he 
is going to deal with. An investor can 
hesitate to give money to a sole proprietor. 
On the other hand, if a good business idea 
is assisted by a recognized legal 
organisation like LLP, Company, etc. the 
investors will be more comfortable while 
making an investment.
• In India, registering a company is also 
known as formation of business or 
incorporation of company. The company 
filing can be done in 10-15 working days. 
The various registrations are: Private 
Limited Company, Limited Liability 
Partnership (LLP), Proprietorship Firm, 
Partnership firms, Section 8 Companies, 
Nidhi companies.
Company Formation -short 
review
• Company Formation – reasons:
Moreover, the company registration protects your firm from personal 
liability for risks and losses. It also attracts and gains more customers. It 
creates better image and responsibility among those firms in the markets. 
The organisation becomes more trusted and respected .
• It is very convenient to exit or sell the business, due to less 
documentation and cost. In particular, if you are a single 
person who offers the entire initial investment needed for the 
business, a One Person Company will be suited for you.
• On the other hand, if your business have two or more owners 
and is actively looking for investment from Limited Liability 
Partnership (LLP) or Private Limited Company will be your 
suitable structure. In fact, the business formation depends on 
what are your expansion plans, future team size, funding 
requirements and business vision. To register for a company in 
India, one has to follow the rules, guidelines, and complex 
process. This is because changing in the laws and rules and in 
the company act, 2013.
Company formation- things to 
be considered:
• The process of company filing:
• Consequently, the process of company formation is common 
for all types of organisations. At the past, it has been a long 
and tedious process for registration. However, the time period 
various from one organisation to another. The NBFC can be 
obtained in 7 working days. For the registering the private 
limited company various documents are needed and it should 
be submitted to the registrar of the related districts.
• Unique company name
First of all, the name of the company defines the types of 
business it belongs to. The name should be unique, easy to spell, 
meaningful and it should specify the business goals. Once, if the 
name is chosed it is easy to proceed for further steps.
• Precise company category:
However, a right firm category is the future of the business. If 
you having minimum 2 shareholders and 3 directors then, the 
company should be under the category of 
private limited company. The right choice of category helps in 
the business growth.
Documents Required for 
Company Registration
Directors and Shareholders Documents
Passport size photograph
PAN Card copy (mandatory)
Proof of Identity (Any one of the below)
• Passport
• Aadhar Card
• Driving License
• Voter ID
Proof of Identity 
• Bank Statement
• Electricity Bill
• Telephone Bill
• Mobile Bill
Registered Office Address Proof Documents
Office Property Ownership/Rental documents
Address Proof of Registered Office Premises
Company formation- types:
• Private limited company:
In other words, a private limited company is one of the easiest ways to start 
a business in India. It is considered as best form of business because it 
secures personal assets. It is most recommended form of business for start-
up in India to rise funding, ESOPs etc. Minimum of 2 and a maximum of 50 
directors are needed to start a private limited company.
• It is governed by the MCA (Ministry of Corporate Affairs) 
under the companies act, 2013. In private limited companies 
are treated as separate entity, and the firm is completely 
responsible for all its debts. The company can open a bank 
account on his own name and the shares can be transferred 
easily.
• Requirements for Private Company Registration
• For instances, Minimum two people are required to start a 
private limited company in India. The investment of capital 
amount should within 2 months of the company incorporation
. Students over 18 years of age can form any type of company 
in India. Employees are not allowed by their employers to 
form a company and be a director. They can hold shares but 
cannot take position as director.
• If you have an idea of opening a company in India, then check 
your employment agreement and seek permission from the 
respective employer. The private limited company can be 
started with even Rs.5, 000. Once if the incorporation process 
is over, proceed with the necessary registrations like GST. This 
is due to the fact that without tax license the business is 
considered as an illegal one.
• Public limited company
Although, a public limited company is the largest form of business 
entity available in India. Public limited company is a large company 
and is formed in order to rise funding from public through IPO etc. 
There is no limit on maximum numbers of members however, after 
500 members, SEBI approval is needed. Public limited company 
registration requires 7 persons to start.
There is no minimum capital requirement; one can start with even 
Rs.5, 000. The first step is to prepare for DSC and DIN. This can be 
done within one to two days. Thereafter, you need to file for name 
approval. The first word of the name should be unique and name 
should end with the words “Limited.” After the name approval, the 
next step is to file for incorporation via spice form INC 32. Further, 
PAN and TAN are not required to be filed separately.
• One Person Company
For instance, One Person Company registration can be done when one person 
is the member of a company. That one person will be the shareholder of the 
company .The benefits of a private limited company are separate legal entity, 
protecting personal assets from business liability, and perpetual succession. 
An OPC is classified into a private company under Companies Act, 2013. In 
case ,the paid  share capital exceeds fifty lakh rupees or its average annual 
turnover then the three consecutive financial years exceeds two crore rupees, 
then the OPC has to be converted into private or public company.
• Key Features of One Person Company (OPC)
In other words, only one person can be a member or 
shareholder. The minimum paid share capital can be Rs. 1 lakh. 
In case of death of the shareholder, then the nominee or the 
other person becomes the member of the company. There will 
be no need to have any Annual general meeting each year. It is 
easy to get loans from the banks. In an OPC, there are chances 
for a company to make contract with the shareholder or 
directors. Directors rent and can earn interest are deductible 
expenses.
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