How to start a company in India?


India has one of the world’s fastest growing ecosystem. There are numerous factors like massive funding, growing domestic market, technology and innovation due to which India’s startup ecosystem has taken off. Five growing industries in India in 2020 are EdTech, HealthTech, FinTech, Gaming, and Data Security.


There are four main categories of companies in India. They are as follows:


1.      One Person Company: This type of registration is ideal for a company that has only one owner or founder. This allows the owner to be part of the corporate network.

Documentation Required:

·       Direction Identification Number

·       DSC

·       PAN Card

·       ID Proof of both director and shareholder 

·       Address proof of both the owner and the company

·       Rent Agreement (if any)


2.      LLP: It is a combination of both partnership and corporation. A company registered as LLP cannot get funding. Only private limited and public limited companies can get funding.

Minimum requirements to register a company as LLP:

·       At least two partners

·       At least one designated partner should be an Indian resident

·       If a body corporate is one of the designated partners, then it has to nominate a natural person

·       The partners need to obtain Direction Identification Number

·       Digital Signature Certificate of any of the Designated Partners

·       Address proof of partners and the office

·       ID proof of partners


3.      Private Limited: It is less transparent than public limited.

Minimum Requirements:

·       It requires minimum two members and two directors to register a private limited company in India. The same two shareholders can also be the directors.

·       It can have maximum 200 members.

·       Minimum capital requirement for a private limited company is Rs 100000.

·       Certificate for commencement of business is not mandatory for a private limited company

·       A company registered as a private limited company is required to mention private limited at the end of the company’s name.

·       Managerial remuneration cannot exceed more than 11% of net profits.

·       Documents required: DIN, DSC, PAN card, address proof, residence proof, Memorandum of Association, and Articles of Association.



4.      Public Limited: This type of a company is transparent as they need to share each and everything with public.

Minimum requirements:

·       It requires minimum three directors and seven shareholders.

·       It can have unlimited number of members.

·       Minimum capital requirement for a public limited company is Rs 500000.

·       Needs to issue a prospectus

·       Certificate for commencement of business is mandatory for a public limited company

·       A company registered as a public limited company is required to mention limited at the end of the company’s name.

·       There is no restriction on managerial remuneration.

·       Documents required: Id proof, Address proof, PAN card of all directors and shareholders, DIN, DSC, Utility Bill, NOC from the landlord, Memorandum of Association, and Articles of Association.


Steps to be taken to incorporate a company in India according to Ministry of Corporate Affairs are listed as follows:


1.      Selecting in order of preference a maximum of six names that is indicative of the main objectives of the company.

2.      Ensuring that the name does not resemble any other registered company’s name and also does not violate the provisions of emblems and names.

3.      Apply to the concerned RoC to ascertain the availability of name in eForm1 A by logging in to the portal. A fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant proposing the company has to be attached in the form. If proposed name is not available, the user has to apply for a fresh name on the same application.

4.      Once the name is approved, the applicant can apply for registration of new company by filing the required forms (Form 1, 18, and 32) within 60 days of the name approval.

5.      Arrange for the drafting of the memorandum and articles of association by the solicitors, vetting of the same by RoC and printing of the same.

6.      With appropriate stamp duty arrange for stamping of memorandum and articles.

7.      Get the Memorandum and the Articles signed by at least two subscribers in his/her own hand, his/her father's name, occupation, address and the number of shares subscribed for and witnessed by at least one person.

8.      Ensuring that the memorandum and articles is dated on a date after the date of stamping.

9.      Login to the portal and fill the following forms and attach the mandatory documents listed in the eForm (Form 1: Declaration of compliance, Form 18: Notice of situation of registered office of the company, and Form 32: Particulars of the Directors, Manager’s or Secretary)

10.  After processing of the Form is complete and Corporate Identity is generated obtain Certificate of Incorporation from RoC.


Additional steps to be taken for formation of a Public Limited Company:

To obtain Commencement of Business Certificate after incorporation of the company the public company has to make following compliance

        File a declaration in eForm 20 and attach the statement in lieu of the prospectus (schedule III) OR

        File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.

        Obtain the Certificate of Commencement of Business.


Average fees for incorporating a company in India:

The average cost of incorporating a company in India would be between INR 6000 to INR 30000 depending on the size of the company, number of directors, number of members, authorized share capital and Professional fees. Professional fees vary from company to company and depend on complexity of the task.


Incorporating a company in India involves a lot of documentation and can be a cumbersome process. We at HBF Direct Limited can help you to set up your company and ease the process for you. Let’s work together and we will help you grow!



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October 31, 2020

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October 31, 2020

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