One of the most recommended ways to set up an IT business in India is by starting a Private Limited Company because of many good reasons. The shareholders have limited liability with specific restrictions based on the ownership. In a private limited company registration, the directors may not be the same from shareholders, which decreases their liability.
No matter what you choose when you register your IT company in India, it is important that you follow the law to avoid getting penalized. In addition, you must have a team that trusts your vision. When it comes to looking for prospects, closing deals, having an investor’s meeting, and product development, your team must be ready for the hustle.
Read more to find out how you can register an IT company in India:
Choose The Right Business Structure
You must choose the right business structure because your income tax return is based on it. As you register your company, keep in mind that each business structure has varying levels of compliance that must be met. For instance, if your IT company will only be under sole proprietorship, you only need to file an income tax return.
A company must file an income tax return and yearly returns at the registrar of companies. The books of the company accountant must be audited yearly.
If you are a foreigner investor, you will find some other business structure to be more friendly to foreigners, but you might want to consider investing in a Limited Liability Partnership company. This type of business structure has a known legal structure, making you more comfortable to invest.
Checklist For India Company Incorporation
- There must be two directors – If you will choose a private limited company, you must have at least two directors and up to 15 directors. Among them, one must be an India resident.
- Choose a unique name – The business name you come up with must be unique. There must be no existing companies or trademarks in India that match the name.
- Minimum capital – There is no minimum amount of capital for you to register your company. Your IT company must have a capital of at least Rs. Lakh that is authorized.
- A registered office – Your company’s registered office does not necessarily have to be a commercial space. It can even be a home you rented, but your landlord must give a NOC.
Registering Your It Company
- You must acquire a Digital Signature Certificate (DSC)
India’s Information Technology Act, 2000 includes provisions of using digital signatures when you submit documents electronically to make sure the documents filed are authentic and correct.
- Get a Director Identification Number (DIN)
The Director Identification Number concept was first introduced with the 266A to 266G of Companies (Amendment) Act, 2006.
- Create an MCA portal account
Go to new user registration – mca.gov.in
- Apply or incorporate your company that will be registered
Documents You Will Need
When you conduct India Company Incorporation, you must provide a proof of identity and address. Your proof of identification and address is needed for the company directors and shareholder incorporation.
The organization needs a registered office if you will do online registration. You must have the latest energy bill or water bill or tax receipt which you must send to confirm your admission to the registered office. Aside from the tenancy agreement, you must ask your landlord to give you permission if you will use it as the company’s registered office. Your landlord must provide a letter to state that they are allowing you.
Submit a proof of identity of the directors and subscribers to the share capital.
Foreigners must submit a notarized copy of their passport, and this is mandatory. All the documents they submit have to be valid. The proof of residence documents such as bank statements or electric bills must not be older than two months.
Needed Proof Of Registered Office Documents
- Latest bill or bank statement. It could be the telephone, mobile, gas, or electricity bill
- Notarized scanned copy of rental agreement written in English
- Scanned copy of a no-objection letter from the landlord
- If you own the property, a scanned copy of the property or sale deeded written in English must be submitted
If you need assistance in your IT company registration in India, you can contact 3E Accounting India to help you with the company registration process.