When setting up a new business you would like to start giving your service or selling your product immediately so as to begin receiving returns very soon. And it is in deed possible (at least that's what I did), but you must take care that your legal frame is in place as early as possible; if you don't, you will have one more worry (and perhaps a headache) to cope with when your project is already running.Mainly, what you will need is to register your company with the ROC (Registrar of Companies) of your city. Or, if you would like to start in a smaller (and more economical) scale you may register a Partnership Firm or a Sole Proprietorship (in fact, I'm about to start a new business this way... later on will be converted into a Private Limited).
Registering your company is not really difficult and you can do great part of it on your own. But if you are willing to spend some few extra thousands of Rupees by giving out the work entirely to a Certified Company Secretary (or just CS) the process would be really smooth... in fact, it's the best thing to do. In my case the process was made longer because I didn't know about CS (which eventually becomes essential) and went instead through a lawyer. The lawyer I chose is a wonderful man but that was not the right way to go, hence the project got delayed.
In brief, the steps to registering your Private Limited company are the following:
- Get a digital signature
- Get a DIN (Director identification number) for your directors.
- Apply to ROC for the name of your company (Form 1A). You can know availability here.
- Draft MoA (Memorandum of Association) and AoA (Articles of Association)
- Stamping and payments required for documents
- Submit Forms 1, 18 and 32 along with the documents stamped and signed earlier.
I will go through each of these steps, mainly telling you about my experience as well as giving links to a site which I have found, written by experts which will help you further. To know about all these steps in general, do visit this other site by clicking here.
By the way, regarding experts (a CA, CS, lawyer or anybody else)... before you meet them, try to do your homework, i.e. read and learn as much as possible from other sources (Google searches, blogs, etc) on your own. This way, when you meet the expert you won't be lost in the many words and high-fi sounding terms which they will use.
very interesting, this will help others as you to get a "confortable" and stable situation at India.
ReplyDeleteAll the best in your new adventure, and hoping you won't suffer the mondial crisis.
Really good info man!!!!!!!!!! Had no clue so googled as usual and stumbled upon you..... Thanks man, I'm definitely informed now, thanks to you :)
ReplyDeleteChanak
I have posted a reply to a doubt on this topic at: http://mumbaientrepreneur.blogspot.com/2009/04/start-working-asap.html
ReplyDeleteThe doubt said:
Here u write….When setting up a new business you would like to start your service or selling your product immediately so as to begin receiving returns very soon…
U r right in some sence but clear me one thing if we r going to develop a software company or some what a web development company,then do u think it is possible to start the service(or starting a project)exactly before registration of the firm.
Or in general, for a product based firm it will be tough to set up the machinery before any legal process.
Hi Javier,
ReplyDeleteSince property rates are very expensive in Mumbai. Is it possible to form a Pvt. Ltd. company at a rented location? If not can one submit his/her house address during the formation process and operate through the rented space?
Could you kindly check with your sources (Secretary, CA) about the same and revert back.
It'll be of great help, as is your blog.
Thanks,
Allan.
Hello Allan,
ReplyDeleteIt is certainly possible to have the registered office of the company at rented premises. In fact, not even the lease and license agreement must be in the name of the company. The ROC will do the residence checking on their own by sending a registered mail to the company that must be received by an authorized company representative.
Thus, if you register your company with registered address as per your own house, which let's say is rented out in your dad's or your wife's name, there won't be any problem at all.
I hope this is useful to you.
Regards,
Javier
Hi Javier,
ReplyDeleteYour response rightly answered my question. Thanks a lot.
Just to let you know. My residence (owned by my parents) is like 45 minutes (by train) away from the office space that I'm planning to rent. That too, I'd be renting a small section of the entire office.
My query is that if I go ahead and register a Pvt. Ltd. company with the 'rented space' as my office address, will I:
1. Be able to change the 'Registered Office Address' to a,
a. New one (once I buy my own space) and/or,
b. Say rent another space?
2. Would the rented space be considered (by the Govt. officials) as the company's own real estate asset or do I have fill additional forms?
Since I am new to the entire process, a resourceful guidance from helpful individuals like yourself is greatly appreciated.
Allan.
Hi Javier,
ReplyDeleteYour response rightly answered my question. Thanks a lot.
Just to let you know. My residence (owned by my parents) is like 45 minutes (by train) away from the office space that I'm planning to rent. That too, I'd be renting a small section of the entire office.
My query is that if I go ahead and register a Pvt. Ltd. company with the 'rented space' as my office address, will I:
1. Be able to change the 'Registered Office Address' to a,
a. New one (once I buy my own space) and/or,
b. Say rent another space?
2. Would the rented space be considered (by the Govt. officials) as the company's own real estate asset or do I have fill additional forms?
Since I am new to the entire process, a resourceful guidance from helpful individuals like yourself is greatly appreciated.
Allan.
Hi Allan,
ReplyDeleteYou can change your registered address at any time to any other premises (rented or owned). In fact, it is not even completely needed to change your registered address. Many companies keep as registered address the first office at which they had operations even after shifting several times, many at times not working at that place any longer... (perhaps you have noticed something like "Corporate ofice" and "Registered address" in their mailing info)
However, you must always make sure that you will get the mail coming from ROC or RBI which will always be address to your registered office. Thus, if you don't change the registered address, you must keep a link with that place. At times it is better not to change because, in case of shifting address again, you may not be so confident of being able to keep the link with that address, but you are able to keep the link with the very first registered address. Anyhow... case to case.
Regards,
Javier
Fantastic!
ReplyDeleteJavier, I must say. You are a very helpful person.
Thanks a lot, once again.
;-) I'm glad you find it helpful!
ReplyDeleteAll the best for your enterprise!
Hi Javier,
ReplyDeleteHow are you?
Kinda curious about this - Forming a Pvt. Ltd. is a time consuming process (2-3 months or so, though I'm not sure of the actual time-frame).
And since I'm planning to get started after mid-December.... do you think it would be good to register the firm's trademark beforehand, and resume services. And then go in for a Pvt. Ltd. via CA, a month later?
If so, just for registering the Trade Mark could you kindly help me with the answers for the following:
1. How many days does the entire process (Trademark registering) consume?
2. Appropriate cost (single service firm)?
3. Do I need to hire a CA, or can this be done single-handedly (like you've mentioned of your own preference of doing as much as on your own).
Looks like I've turned you into my personal advisor. :) Nonetheless an advisory business could do good for you.... since you like helping people, don't you think so?
Look forward to hearing from you soon.
Allan.
Hi Allan,
ReplyDeleteI don't know much about TMs, but I do think that you don't need them so as to start working, unless you have a product or service which is very unique and you would hate seeing being copied by somebody else. In that case, then you will want the TM whether you have the Pvt. Ltd. or not.
I think the best is that you start working on selling and producing you product or service as soon as you have ready your business plan. The registering of the Pvt. Ltd. can be worked out in parallel and you need not wait for it so as to start selling.
Javier,
ReplyDeleteYou are so very precise about TM, even in the absence of Pvt. Ltd. Thus, formation of Pvt. Ltd. on parallel lines would be the right option.
The only hurdle would be that of approaching customers in the absence of a registered Company. Nonetheless I'd try and work a way out.
It's been kind of you to answer my queries. I hope I've not troubled you with my questions.
Once again,
Thank you.
Allan.
Allan, I think most clients do not research whether your company is registered or not, they don't even ask. And if they ask, you can always say that the process is open and it should be finished in "a-couple-of-weeks-time". Everybody knows that it may take a little longer than that, but they are at peace because you are onto it. And as long as they can get the service or product well done and within their budget, they will have no qualms. The only problem could be the invoice, but if you tell them that you will give it to them as soon as the company is ready, that will be before the end of the Financial Year... they shouldn't worry about it.
ReplyDeleteI am glad to know the steps for registering the private limited company. I am opening my new company from next month. Everything has been planned. I also decide the digital signature for it as well..
ReplyDeleteHi.
ReplyDeleteJavier,
I am willing to register a company for outsourcing housekeeping staff, i.e. my company will take house keeping contracts in commercial establishments, the staff strength will be 20 -30 initially, the firm will be under partner ship, so please guide me.
hello..
ReplyDeleteI started with cotton dress materials exhibition rom home. Now planning to start on FBpage.
I would asking clients to send me the price of materials in my savings account.
Do I need to register a brand name or company name?
Once registered do I need to appoint CA to look after tax ad all?
for how much income in a year will I be taxed?
do I need to open a current acc in the bank ?
u may reply back a vrindakv@gmail.com
thanks
Hi Vrinda,
ReplyDeleteThis could be considered a sole proprietorship, hence no real need of registering it as a company.
However, I do advise you contact a good and reliable CA that will guide you through the taxation matters.
The taxation, being a sole proprietorship would be simply as a personal income for a self-employed person, the company itself need not be taxed, especially because it is not registered.
The current account would give you business advantages over savings account, but is not strictly needed.
Cheers!
Hello Venkyfriends,
ReplyDeleteDo let me know how can I help you... I'll be glad to give a hand if I can.
Regards,
Javier
PS. Sorry for the late reply...
hey for the info...but if i m keeping a name for my brand i need to findout that noone else has it ? rite?
ReplyDeletealso do u have idea wat the limit after which i shall be taxed
vrinda
With regards to brand name... well, yes, you could register a trade mark, but that's different from registering your company. The registration of your company's name is with ROC, which is different from the brand name for which you should contact a trade mark specialist (I have no experience on this, although I have received dozens of calls from such "specialists" offering me their services).
ReplyDeleteThe limits for taxation would be as per personal income slabs... I've done a quick google search, and got this site, I believe the info is right: http://finotax.com/income-tax/slabs
Oh, sorry, that link shows the FY 2012-13 which is over... but I hope it gives you an idea!
DeleteHi Javier,
ReplyDeleteSo was reading some stuff and found this interesting blog written by you. This is very informative.
Hi,
ReplyDeleteThanx indeed for the information u put up here. However I m planning to open a small business, and need to register the same . Is there any possibility tht I could have a word with u personally. U information has helped a lots, but just want to be sure before my start up
Pls can u mail me or let me ur contact no
Hello Jovy... I'll be glad to try helping you... You can write me on javier.blog[at]ecam.co.in
ReplyDeletehey hey plz help mi .. i wanted to register my PR( Public Relation ) co. in mumbai.. where i have to go for dis registration process .. wer i gate all dat form wich require for registration process.. plz do help me
ReplyDeleteHello Tejashree! Would be a pleasure to try helping you!
DeleteWith regards to the process in general, you can check this and some of my other posts... if you need something in specific, depending on how much you have advanced, do send me an e-mail and maybe we can talk on the phone or SKYPE.
Cheers!
BTW... just in brief, the most important thing that you will have to do, will be to contact a good CA and CS, according to the budget that can take care of the process. But it is important that you understand the process so that you don't go blind through it.
DeleteHi,
ReplyDeleteIt depend what u want to form. Properitorship firm is least cost. For which u need Ghumata license, Service tax registration and your own PAN.
Rgds,
Vikas
Hi Javier,
ReplyDeleteAm planning to start retail store in Mumbai soon. This will be a proprietary organization. Apart from that I am planning for a SME loan from SIDBI.
At of now I have not leased any store.
Kindly guide me whether I have to lease a store first and then start looking for acquiring a BMC trade License or how do I go?.
Do I need to take help from a CA right from the current stage?.
Please guide me.
Regards
Manoj
Hi Manoj,
DeleteI do not have much experience on the BMC Trade License, so I can't tell you much on that.
But I do suggest you get help from a good CA soon. This way you won't get into trouble from the very beginning which you could later on pay for at later stages.
In any case, I suggest you move on with your business, while at the same time work out the formalities... i.e., don't let your business be stopped due to paper work.
All the best,
Javier
Hi,
ReplyDeleteMe along with 3 friends are planning to start a business which is into filmmaking and shooting corporate films since we are cinematographers who have the talent. We don not have a office since we work on projects. But we have given our team a name. Do we have to register this? There are many who use their talent to work on freelance. So this requires registration with the ROC? Please advice. Thanks.
Hey, no, you don't need registration at ROC. If you have given a name to your team, you will need to open an account in that name so that you can receive payments on that name... unless you prefer to get the payments towards the individuals' teams.
DeleteIn theory, to open the account under your team's name, you will not need ROC registration... just find the right bank where you don't get an bank guy who doesn't know it.
All the best for your business!