{"id":17471,"date":"2020-12-05T15:26:27","date_gmt":"2020-12-05T09:56:27","guid":{"rendered":"https:\/\/swaritadvisors.com\/learning\/?p=17471"},"modified":"2020-12-09T12:37:16","modified_gmt":"2020-12-09T07:07:16","slug":"legal-requirements-to-register-a-small-firm-in-india","status":"publish","type":"post","link":"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/","title":{"rendered":"What are the Legal Requirements to Register a Small Firm in India?"},"content":{"rendered":"\n<p class=\"has-drop-cap\">In these modern times, starting up a business in India\nhas enhanced and become better notably. Development in the Indian economy has\nhelped the small firms to take the initiative of starting up their own\nbusiness. The government has also supported the small firms by introducing many\nschemes and other various initiatives to help them set their foot in the market\nand contribute towards the growth. One significant question that arises for the\nsmall or private firms to start a business is that what are the legal\nrequirements to register a Small firm in India?&nbsp;<\/p>\n\n\n\n<p>When a <strong><a href=\"https:\/\/swaritadvisors.com\/private-limited-company-registration\" class=\"text-primary\">private company<\/a><\/strong> is starting its business in manufacturing, retailing or service, the firm step to protect its business before entering into the market is to get itself registered. For a small firm, it is vital to get itself registered.&nbsp;<\/p>\n\n\n\n<p>Therefore, the write-up will talk about all the necessary\nrequirement to register a small firm in India.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_65 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a312b4ad99c0\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a312b4ad99c0\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Types_of_Business_Structures_in_India\" title=\"Types of Business Structures in\nIndia&nbsp;\">Types of Business Structures in\nIndia&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#One_Person_Company_OPC\" title=\"One Person Company (OPC)\">One Person Company (OPC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Limited_Liability_Partnership_LLP\" title=\"Limited Liability Partnership\n(LLP)\">Limited Liability Partnership\n(LLP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Private_Limited_Company_PLC\" title=\"Private Limited Company\n(PLC)&nbsp;\">Private Limited Company\n(PLC)&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Public_Limited_Company_PLC\" title=\"Public Limited Company\n(PLC)&nbsp;\">Public Limited Company\n(PLC)&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#What_are_the_Legal_requirements_to_register_a_small_firm_in_India\" title=\"What are the Legal requirements\nto register a small firm in India? \">What are the Legal requirements\nto register a small firm in India? <\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Obtaining_Digital_Signature_Certificate_DSC\" title=\"Obtaining Digital Signature\nCertificate (DSC)\">Obtaining Digital Signature\nCertificate (DSC)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Obtaining_Director_Identification_Number_DIN\" title=\"Obtaining Director\nIdentification Number (DIN)&nbsp;\">Obtaining Director\nIdentification Number (DIN)&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Filing_New_User_Registration\" title=\"Filing New User\nRegistration&nbsp;\">Filing New User\nRegistration&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Obtaining_a_certificate_of_Incorporation\" title=\"Obtaining a certificate of\nIncorporation&nbsp;\">Obtaining a certificate of\nIncorporation&nbsp;<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Other_documents_which_are_the_requirements_to_register_a_small_firm_in_India\" title=\"Other documents which are the requirements to register a small firm in India\">Other documents which are the requirements to register a small firm in India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/swaritadvisors.com\/learning\/legal-requirements-to-register-a-small-firm-in-india\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Types_of_Business_Structures_in_India\"><\/span>Types of Business Structures in\nIndia&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"One_Person_Company_OPC\"><\/span>One Person Company (OPC)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The Indian Government in 2013 introduced a new type of\nbusiness structure which is called One Person Company. A single owner or the\nproprietor now can start a small firm of his own. It helps a sole-proprietor to\ncontinue his business and still be a part of the corporate sector.&nbsp;<\/p>\n\n\n\n<p>Before this initiate taken by the Government, sole &#8211;\nProprietorship Company could not be incorporated, and a minimum of two\ndirectors were required to start a small firm.&nbsp;<\/p>\n\n\n\n<p>The members\/owners of this company have limited liability to shares brought by them in the company.&nbsp;<\/p>\n\n\n\n<p>The advantage of setting up of this type of company is\nthat it is easy to manage this type of business structure, the owners can\neasily get a loan from the bank as such type of company is given a legal\nrecognition under the company law.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Limited_Liability_Partnership_LLP\"><\/span>Limited Liability Partnership\n(LLP)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A Limited Liability Company is a separate legal entity\nand the partners in such a company have limited liability only to the agreed\ncontribution made by them in the company.&nbsp;<\/p>\n\n\n\n<p>LLP is a flexible business structure and separates\npersonal and business liabilities. It is a business structure only for a\nlimited period and is not accountable for any debts in the business like other\nbusiness structure.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Private_Limited_Company_PLC\"><\/span>Private Limited Company\n(PLC)&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A Private limited company is a type of company which\nconsists of a minimum of 2 members and a maximum of 200 members. The funds\nunder this company cannot be raised from the public, and therefore the company\ncannot publicly issue shares.&nbsp;<\/p>\n\n\n\n<p>Since the company itself is recognised as a separate\nlegal entity from its owners, no paid-up capital is required to start with this\ntype of company. The liability of the owners of the company is only limited to\nthe share brought by him\/her in the company.&nbsp;<\/p>\n\n\n\n<p>Also, the shares can be easily transferred to the other\npersons, and the company can issue debentures to the public and receive funds\nfrom them.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Public_Limited_Company_PLC\"><\/span>Public Limited Company\n(PLC)&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>It is a type of company consisting of voluntary\nassociation of members and is incorporated under the company law. The liability\nof the members is limited to the shares they brought into the company. The\ncompany is a separate legal entity from its members.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Legal_requirements_to_register_a_small_firm_in_India\"><\/span>What are the Legal requirements\nto register a small firm in India? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A certain procedure has to be followed to get a company\nregistered under the Companies Act 2013. There are four legal requirements to\nregister a small firm in India.&nbsp;<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter is-resized\"><img decoding=\"async\" loading=\"lazy\" src=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/12\/Legal-requirements-to-register-a-small-firm-in-India.png\" alt=\"Legal requirements to register a small firm\" class=\"wp-image-17529\" width=\"486\" height=\"486\" srcset=\"https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/12\/Legal-requirements-to-register-a-small-firm-in-India.png 1000w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/12\/Legal-requirements-to-register-a-small-firm-in-India-150x150.png 150w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/12\/Legal-requirements-to-register-a-small-firm-in-India-300x300.png 300w, https:\/\/swaritadvisors.com\/learning\/wp-content\/uploads\/2020\/12\/Legal-requirements-to-register-a-small-firm-in-India-768x768.png 768w\" sizes=\"(max-width: 486px) 100vw, 486px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Obtaining_Digital_Signature_Certificate_DSC\"><\/span>Obtaining Digital Signature\nCertificate (DSC)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The private company must apply for the DSC. It is an\ne-signature which helps to complete the company registration process online in\nIndia. It takes almost two days to get a DSC after submitting the necessary\ndocuments.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Obtaining_Director_Identification_Number_DIN\"><\/span>Obtaining Director\nIdentification Number (DIN)&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The second step is to obtain a <a href=\"https:\/\/swaritadvisors.com\/learning\/director-identification-number\/\" class=\"text-primary\"><strong>director identification number<\/strong><\/a>. According to the amendment act 2006, it is important to obtain a DIN. The director of the company needs to file a DIN e-form which can be taken from the official State of Ministry of Corporate Affairs.&nbsp;<\/p>\n\n\n\n<p>After receiving the DIN the director must intimate it to\nthe members of the company about it through DIN-2 form. The company later then\nneeds to inform the Registrar of Corporate regarding all the DIN of the\ndirectors through DIN-3 form.&nbsp;<\/p>\n\n\n\n<p>Any changes in the DIN can be done by the director\nthrough DIN-4 form. Such changes include details like the address, contact no.\nName etc.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Filing_New_User_Registration\"><\/span>Filing New User\nRegistration&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The next step is to create an account on the <strong>MCA portal<sup><a href=\"http:\/\/www.mca.gov.in\/\" class=\"text-primary\"><strong><em>[1]<\/em><\/strong><\/a><\/sup><\/strong> or registered user account for filing the e-form, making transactions, online fee payment etc. as a registered user.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Obtaining_a_certificate_of_Incorporation\"><\/span>Obtaining a certificate of\nIncorporation&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The last step is to obtain a certificate of\nincorporation. It is a legal document that makes the formation of the company\nvalid and brings it into existence.&nbsp;<\/p>\n\n\n\n<p>It includes the following information<\/p>\n\n\n\n<ul><li>The\ncorporation&#8217;s name along with its abbreviation<\/li><li>The\ndetails such as name, address etc. of the managers, secretary and proposed\ndirectors<\/li><li>A\nstatement about the business purpose<\/li><li>The\nregistered office address and the name of the registered agent&nbsp;<\/li><li>Number\nof shares authorized to be issues and description of different types of stocks\nthat can be issued by the company if more than one type&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Other_documents_which_are_the_requirements_to_register_a_small_firm_in_India\"><\/span>Other documents which are the requirements to register a small firm in India<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul><li>A PAN Card copy of directors of the company.<\/li><li>Valid Address proof of all the directors in any form like Voter ID, Driving License, Aadhar Card, Utility bill, Passport, Bank statement.<\/li><li>Passport-size photographs ( 3 each).<\/li><li>Signature<\/li><li>Consent from all the Directors in DIR-2 form, along with DIN details and DSC.<\/li><li>A declaration by subscribers and directors in Form INC-9.<\/li><li>proof of the registered office address of the company ( Anyone from registered title document\/sale deed in the name of the company\/Recent Utility Bill).<\/li><li>For a rented office- NOC from the owner for using the property as a registered office address, Notarised Rent or Lease agreement.<\/li><li>Sale deed in case the property is owned.<\/li><li>Tax identification number.<\/li><li>Copy for board resolution or formal authorisation for the use of company name or trademark.<\/li><li>MOA or Memorandum of Association.<\/li><li>AOA or Articles of Association.<\/li><li>Latest copy of an energy bill or the property tax receipt or water bill must be sent to confirm admission to the registered <a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/esic-registration\"><strong>ESIC registration<\/strong><\/a><strong>&nbsp;<\/strong><\/li><li><strong><a class=\"text-primary\" href=\"https:\/\/swaritadvisors.com\/iec-registration\">Import Export Code<\/a><\/strong> (IEC) where a business is involved in import-export.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Company Registration provides many advantages to new\nentrepreneurs. All these legal requirements to register a small firm are very\nnecessary because not only it enhances the credibility of a small firm, but it\nalso protects it from menaces as well. It builds goodwill and reputation of the\nbusiness and helps to attract the attention of the customers as well.&nbsp;<\/p>\n\n\n\n<p>Registration helps the small business to protect the assets of the company and provide great stability to the firm. It helps the small firms to develop as it creates a positive competition which encourages them to grow more.<\/p>\n\n\n\n<p><b>Also, Read:<\/b> <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/swaritadvisors.com\/learning\/start-a-small-finance-company-in-india\/\">https:\/\/swaritadvisors.com\/learning\/start-a-small-finance-company-in-india\/<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In these modern times, starting up a business in India has enhanced and become better notably. Development in the Indian economy has helped the small firms to take the initiative of starting up their own business. The government has also supported the small firms by introducing many schemes and other various initiatives to help them [&hellip;]<\/p>\n","protected":false},"author":25,"featured_media":17477,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[60,168],"tags":[1032],"_links":{"self":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/17471"}],"collection":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/comments?post=17471"}],"version-history":[{"count":9,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/17471\/revisions"}],"predecessor-version":[{"id":17732,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/posts\/17471\/revisions\/17732"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media\/17477"}],"wp:attachment":[{"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/media?parent=17471"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/categories?post=17471"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/swaritadvisors.com\/learning\/wp-json\/wp\/v2\/tags?post=17471"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}