Starting a Business in India

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STANDARDIZED COMPANY
Legal Form: Private Limited Company
Paid in Minimum Capital Requirement: None
City: Mumbai

Registration Requirements

No:	Procedure	Time to complete:	Cost to complete:
1	Obtain Director Identification Number (DIN)	1 day	no charge
2	Obtain Digital Signature Certificate	4 days	INR 400 to INR 2,650
3	Present name of company for approval to the Registrar of Companies (ROC); Get the Memorandum and Articles of Association vetted by the ROC and printed	2-3 days	INR 50
4	Make an application to the Superintendent of Stamps or an authorized bank requesting for stamping of the Memorandum of Association and Articles of Association.	1 day	INR 200 (for MOA) + INR 1000 (for AOA) for every INR 500,000 or part thereof + INR 100 (stamp paper for declaration Form 1)
5	Present the required documents along with the registration fee to the Registrar of Companies to get the certificate of incorporation	5-10 days	see comments
6	Obtain a company seal	3 days	INR 350
7	Visit an authorized franchise or agent appointed by National Securities Depository Services Limited to obtain a Permanent Account Number	7 days	INR 66 (INR 66 fee & INR 5 for application form if not downloaded)
8*	Obtain a Tax Account Number for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department	7 days, simultaneously with Procedure 7	INR 55
9*	Register with Mumbai Shops and Establishment Act, 1948	2 days, simultaneous with procedure 8	INR 1,500 + 3 times registration fee for Trade Refuse Charges
10*	Register for value added tax (VAT) before the Sales Tax Officer of the ward in which the company is located	12 days, simultaneous with previous procedure	INR 5,000 (Registration Fee) + INR 100 (Stamp Duty)
11*	Register for Profession Tax	2 days, simultaneous with procedure 10	no charge
12*	Register with Employees' Provident Fund Organization	2 days, simultaneous with procedure 10	no charge
13*	Register with ESIC (medical insurance)	1 day, simultaneous with procedure 10	no charge

* Takes place simultaneously with another procedure.

Procedure 1.

Obtain Director Identification Number (DIN)

Time to complete:

1 day

Cost to complete:

no charge

Comment:

The process to obtain the DIN (Director Identification Number) is as follows: - Obtain provisional DIN by filing application form DIN-1 online (www.mca.gov.in); provisional DIN is immediately allocated. The application form must then be printed and signed and sent for approval to the MCA by courier along with proof of identity and proof of address. - The concerned authority verifies all the documents and, upon approval, allocates a permanent DIN. The process takes approximately 4 weeks. - Within 30 days of receipt of the approved DIN, directors submit Form DIN-2 to the MCA along with the approved number of all companies of which they hold a director position. - The above companies submit DIN-3 attested by Company Secretary to concerned Registrar of Companies (ROC).

Procedure 2.

Obtain Digital Signature Certificate

Time to complete:

4 days

Cost to complete:

INR 400 to INR 2,650

Comment:

The Digital Signature Certificate can be obtained from six private agencies authorized by MCA 21 (Ministry of Corporate Affairs 21st century). For the purpose of using the new electronic filing system under MCA 21 Project the applicant needs to obtain a Class II Digital Signature Certificate. Company directors submit the prescribed application form along with proof of identity and proof of address. Each agency has its own fee structure which ranges from INR 400 to INR 2650.

Procedure 3.

Present name of company for approval to the Registrar of Companies (ROC); Get the Memorandum and Articles of Association vetted by the ROC and printed

Time to complete:

2-3 days

Cost to complete:

INR 50

Comment:

Company name approval must be done electronically. Under e-filing for name approval, the applicant can see the availability of the desired company name from the website of the MCA 21. The RoC electronically informs the applicant whether the name is available within seven days from the date of submission of the application. Once a name is approved, the Memorandum of Association and Articles of Association together with miscellaneous documents have to be filed within six months of the approval. In practice, if the proposed name is available the same is granted within 2 or 3 days.

Procedure 4.

Make an application to the Superintendent of Stamps or an authorized bank requesting for stamping of the Memorandum of Association and Articles of Association.

Time to complete:

1 day

Cost to complete:

INR 200 (for MOA) + INR 1000 (for AOA) for every INR 500,000 or part thereof + INR 100 (stamp paper for declaration Form 1)

Comment:

The application should be accompanied necessarily by the following: (i) Unsigned copies of the Memorandum of Association and Articles of Association. (ii) Payment receipt. Ensure that the copies submitted to the Superintendent of Stamps or to the bank for stamping are unsigned and no promoter or subscriber has written anything on it by hand. The Superintendent returns the copies, one of which is duly stamped, signed and embossed evidencing the payment of the requisite stamp duty. The rate of stamp duty varies from State to State. According to Article 10 and 39 of the Indian Stamp Act,1899, stamp duty payable on memorandum of association and articles of association for a company to be incorporated in Mumbai, Maharashtra is: AOA: Rs. 1000/- for every Rs. 500,000/- capital or part thereof subject to a maximum of Rs.50,00,000.00. Stamp duty for the MOA is Rs.200.00 Once the Memorandum and the Articles of Association of the Company have been stamped, the same is required to be signed by the Promoters of the Company including commencing with the name and description, father’s name, address, occupation and the number of shares subscribed for in their own handwriting which is duly witnessed. After signing the documents are to be dated. Declaration form 1: On Rs 100 stamp paper

Procedure 5.

Present the required documents along with the registration fee to the Registrar of Companies to get the certificate of incorporation

Time to complete:

5-10 days

Cost to complete:

see comments

Comment:

After the stamping of the MOA and AOA, 3 copies along with the following documents are required to be scanned and uploaded on the MCA-21 Portal: - The stamped copies of the MOA and AOA - Copy of the Form-32 along with the consent letters of the Directors of the Company, who are appointed therein. - Form-1 - application and declaration for incorporating of a Company and printed on non judicial Stamp paper worth INR 20. - Form 18-evidencing the address proof of the Company. - Form-1A-evidencing the name approval. - Copy of challan evidencing the fee with respect to above mentioned forms. - Power of Attorney from the subscribers in favor of any person for making corrections on their behalf in the documents and papers filed for registration .This must be on non judicial stamp paper of INR 100. - Identification of the subscribers by way of copy of driving license, passport, voters identity or ration card. These documents, in addition to their online uploading, are also to be filed in original with the ROC. Once the documents are uploaded and confirmation of payment of fee is received from the Bank by the ROC, it processes the papers in order of their receipt. A software ensures that the queue can not be jumped by ROC. The fees paid to the Registrar for registration are scaled according to the amount of the authorized share capital of a company as stated in its memorandum. The schedule is as following: For registration of a company whose nominal share capital does not exceed Rs.100,000: Rs. 4,000. For registration of a company whose nominal share capital exceeds Rs.100,000, the above fee of Rs.4,000 with the following additional fees regulated according to the amount of nominal capital:- - Rs. 300 for every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.1,00,000 up to Rs.5,00,000; - Rs. 200 for every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.5,00,000 up to Rs.50,00,000; - Rs. 100 for every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.50,00,000 up to Rs.1 crore; - Rs. 50 for every Rs.10,000 of nominal share capital or part of Rs.10,000 after the first Rs.1 crore. The above stated fees is required to be paid in the office of the ROC by way of a Demand Draft/ Treasury Challan. The DD has to be drawn in favor of either the office of the concerned ROC or in favor of the Pay and Accounts Officer, Department of Company Affairs, Mumbai. In the present case the total amount of fees (including the filing fees of the forms filed) to be paid in the office of the ROC for getting the company registered with an authorized share capital of Rs.1,00,000 approximately would be Rs.4,800/- Schedule of ROC filing fees for the Articles and for the other forms l, 18 and 32: - Rs. 200 In respect of a company having a nominal share capital of Rs. 100,000 or more but less than Rs. 500,000; - Rs. 300 In respect of a company having a nominal share capital of Rs. 500,000 or more but less than Rs. 2,500,000; - Rs. 500 In respect of a company having a nominal share capital of Rs. 2,500,000 or more.The ROC will then scrutinize the documents filed by the Company and if necessary the authorized person will on intimation make the necessary corrections under his initials. The authorized person will be provided the Obtain the Certificate of Incorporation of the company from the office of the ROC. The company can commence its business on getting incorporation certificate from ROC. The other procedures given below can be done after the business is started.

Procedure 6.

Obtain a company seal

Time to complete:

3 days

Cost to complete:

INR 350

Comment:

Procedure 7.

Visit an authorized franchise or agent appointed by National Securities Depository Services Limited to obtain a Permanent Account Number

Time to complete:

7 days

Cost to complete:

INR 66 (INR 66 fee & INR 5 for application form if not downloaded)

Comment:

Under the Income-tax Act, 1961, each person is required to quote his Permanent Account Number (PAN) for tax payment and Tax deduction Account Number (TAN) for depositing tax deducted at source. The Central Board of Direct Taxes (CBDT) has instructed banks not to accept any form for tax payments (challan) without the PAN or TAN, as the case may be. The Permanent Account Number (PAN) is a 10-digit alphanumeric number, issued in the form of a laminated card, by an Assessing Officer of the Income Tax Department. The Income Tax Department has outsourced PAN allotment to UTI Investors Services Limited. The outsourcing was done as a means to speed up the allotment PAN. Any authorized franchise or agent appointed by National Securities Depository Services Limited can accept and process Permanent Account Number application. If done through a service center, a period of 14 days is allowed for making an application. The application for PAN is to be made on form 49A along with a certified copy of the certificate of registration issued by the ROC along with proof of address and identity. The fee for processing of PAN application and ‘Request for New PAN Card or/and Changes or Correction in PAN data’ is Rs. 60 (plus applicable taxes).PAN forms can be obtained from TIN Facilitation Centers (TIN-FCs) or freely download from www.tin-nsdl.com

Procedure 8.

Obtain a Tax Account Number for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department

Time to complete:

7 days, simultaneously with Procedure 7

Cost to complete:

INR 55

Comment:

TAN or Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting or collecting tax. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan and TDS/TCS certificates.The provisions of section 203A of the Income-tax Act require all persons who deduct or collect tax at source to apply for the allotment of a TAN. The section also makes it mandatory for TAN to be quoted in all TDS/TCS returns, all TDS/TCS payment challans and all TDS/TCS certificates to be issued. Failure to apply for TAN or comply with any of the other provisions of the section attracts a penalty of Rs. 10,000/-. An application for allotment of TAN is to be filed in Form 49B and submitted at any of the TIN Facilitation Centres meant for receipt of e-TDS returns. Addresses of the TIN FC are available at www.incometaxindia.gov.in or http://tin.nsdl.com. The processing fee for the both the applications (new TAN and change request) is Rs. 50 (plus applicable taxes). Income tax is levied by the national government. since the outsourcing, any authorized franchise or agent appointed by National Securities Depository Services Limited can accept & process Tax deduction Account Number application.

Procedure 9.

Register with Mumbai Shops and Establishment Act, 1948

Time to complete:

2 days, simultaneous with procedure 8

Cost to complete:

INR 1,500 + 3 times registration fee for Trade Refuse Charges

Comment:

A statement containing the name of the employer and the manager, the postal address of the establishment, the name of the establishment if any and the category of the establishment must be sent to the Inspector of the local area together applicable fees. According to Section. 7 of the Bombay Shops & Establishments Act. 1948 it is a obligatory to register the establishment under the Act. Under Sec. 7(4) the employer is obliged to get his establishment registered in the prescribed manner within 30 days from the date of which the establishment commences its work. According to provisions of Sec.7(1) it is required to submit to the concerned Shop Inspector under jurisdiction the prescribed form 'A' together with prescribed fees for registration of establishment. Pursuant to Sec. 7(2) on receipt of statement in form 'A' along with prescribed fees, on being satisfied about the correctness of the statement, the Registration certificate for registration of the establishment is issued in form 'D' in accordance with the provisions of Rule-6 of the Maharashtra Shops & Estts. Rules 1961. Registration fees Rs. (Alongwith Form 'A') Establishments having no employees 50.00 Establishments having 1 to 5 employees 150.00 Establishments having 6 to 10 employees 300.00 Establishments having 11 to 20 employees 600.00 Establishments having 21 to 50 employees 1,500.00 Establishments having 51 to 100 employees 3,000.00 Establishments having 101 or more employees 4,000.00 In addition, a sum three (3) times the registration and renewal fee per year is charged as Trade Refuse Charges (TRC) under the provisions of Mumbai Municipal Corporation Act, 1888.

Procedure 10.

Register for value added tax (VAT) before the Sales Tax Officer of the ward in which the company is located

Time to complete:

12 days, simultaneous with previous procedure

Cost to complete:

INR 5,000 (Registration Fee) + INR 100 (Stamp Duty)

Comment:

VAT tax registration will be effective from the date of application. In the State of Maharashtra, from April 1, 2005, Sales Tax has been replaced by VAT and for VAT registration Form 101 is filed. Further, the authorized representative signing the said application is required to be available at the Sales Tax office on the day of verification of the application. Accompanying documentation included, certified true copy of the MoA and AoA of the company, registered office address proof of the company, antecedents of Directors copy of the office premises agreement as proof of the place of business (in Mumbai), copy of registration certificate under Mumbai Shops and Establishments Act, 1948, copy of Income Tax order, if any and PAN card, bank current A/c. number, original challan of payment of registration fees, two passport size photograph of the authorized signatory, and board resolution authorizing the signatory to sign the application form, appear before the Sales Tax Officer and to complete the formalities related to registration

Procedure 11.

Register for Profession Tax

Time to complete:

2 days, simultaneous with procedure 10

Cost to complete:

no charge

Comment:

According to section 5 of the Profession Tax Act, every employer (not being an officer of Government) liable to pay tax and shall obtain a certificate of registration from the prescribed authority . The company is required to apply in Form I to the registering authority. The registration authority for Mumbai Area is situated at Vikarikar Bhavan, Mazgaon, Mumbai.The application should be supported with the documents such as address proof, details of company registration number under Indian Companies Act,1956,details of head office, if the company is a branch of company registered outside the state,company deed, certificates under any other Act.etc. depending on nature of business.

Procedure 12.

Register with Employees' Provident Fund Organization

Time to complete:

2 days, simultaneous with procedure 10

Cost to complete:

no charge

Comment:

Provident Commission (part of local labor authority). Procedure: Fill in application. The applicant is then allotted a social security number. The Provident Fund Registration is focused on delinquency under reporting or non-reporting of employment strength. Provident Fund Registration is optional if employee strength is not more than 20.

Procedure 13.

Register with ESIC (medical insurance)

Time to complete:

1 day, simultaneous with procedure 10

Cost to complete:

no charge

Comment:

In terms of section 2(A) registration is the process by which every employer/factory and its every employee employed for wages, is identified for the purpose of the Scheme, and their individual records are set up for them.-The employers registration form is Form 1A and Employers cansubmit application online for registeration under ESI Act. 1948