Steps in Registering Startups

Steps To Register your Startup
Company
Submitted To:- Submitted By :-
Ms. Sumedha Tuteja Abhishek Rautela (09)
Abhishek Sharma (12)
Arihant Jain (26)
Anupriya Srivastav (46)
Ankit Gupta (39)
Satyajit chatterje (55)

INTRODUCTION
Registering your company is what will finally give your startup a legal existence. Before
registering it can be a sole proprietorship or a partnership but once you take the decision to
register, your company takes a life of its own and can be closed only by legal intervention.
Registering a Company is a long and tedious procedure though, which will be quite heavy
on both your pocket and on your time, if you want to do it all yourself. But none the less
becoming an owner of a registered company brings its own advantages and very less
disadvantages to you.

REASONS WHY YOU SHOULD REGISTER YOUR
COMPANY
1. Protection- against accidents, limited liability-therefore reduced financial loss, for
family and oneself in bad and unfavourable situations.
2. Product/Service
In case your Product /Service caused any harm to anybody, or your customer or you
partner caused a harm which you are not responsible but will be held responsible for.
Your company goes bankrupt in lawsuits and due payments. Its always better to safe
guard your company by registering it.

3. Raising money
If you grow above your friends and family support, you may need private equity or a venture
capitalist, who will make sure that they give money only to the registered companies most of the
times. All investors will look at protection of an incorporation and an exit strategy.
4. Perceptual existence
Existence of the company continues, no matter which director or member comes and goes. The
company is closed only when by complying with the provisions of Law. Also when you want to
transfer the entire shareholding to another person, it’s actually a very easy process and the easy
change in management and ownership which will save the time and money (stamp duty) of
promoters.

Rules for registering Private limited company
 Minimum two directors and two shareholders are required.
 Shareholders/directors cannot transfer their shares as per the articles of association.
 Maximum number of shareholders is limited to fifty.
 General public cannot buy shares or debentures of a private limited company
 Deposits is allowed only from the members and directors (or their relatives is
allowed)

PROCESS FOR REGISTER A STARTUP COMPANY
 1. Offline
 2. online

Step 1 : Apply for DIN (Director Identification Number) and DSC (Digital Signature
Certificate)
 Website : http://www.mca.gov.in/MCA21/index.html
 Amount : For DIN – 100 and for DSC – 400- 2650 (more details –
http://www.mca.gov.in/MCA21/certifying-new.html)
 Time : For DIN 1 Day and for DSC 4 Days

Step 2 : Get Company name approved and get certificate of
Incorporation
 You have to file basically 4 types of forms to get these two work done. first apply for company
name on
 FORM 1A and wait for the company name approval from ROC(Registrar of Company) and
then apply for
 certificate of Incorporation by filing FORM 1, FORM 18 and FORM 32.
 Website : http://www.mca.gov.in/MCA21/RegisterNewComp.html
 Amount : For name Approval 500, For Certificate 4000- 10000
 Time : For name Approval 2 days and for Certificate 7 days

Offline Step 3 to complete Step 2 :
 Scanned copies of the following has to be attached with the FORM 1 to get the Certificate of
 Incorporation mentioned above.
 Copy of Form 32 along with consent letters of Directors of the Company
 Signed and stamped copies of the Memorandum of Association(MoA) ( 200)
 Signed and stamped copies of the Articles of Association(AoA) ( 1000- 4000)
 Power of Attorney from subscribers on judicial stamp paper of 100
 Identification of subscribers
 must be attached to Form 1 mentioned above.

Documents required
 Memorandum of Association(MoA) – This documents should contain how much
capital you want to raise by issuing shares and what for that capital will be used for
present and future purposes.
 Articles of Association(AoA) – This defines the internal clauses and functioning of
the company. Once these to are prepared they are sent for verification to the registrar
and then they are stamped(stamp duty varies) and signed and sent to the concerened
registrar office.

Step 4 : Apply for PAN(Permanent Account Number) and TAN(Tax Account Number)
for your registered company.
 For More detailed explanation on how to apply for the same read this article – APPLY for
TAN in 4 easy steps
 Website : https://www.tin-nsdl.com/
 Amount : For PAN – 94 and for TAN – 62
 Time: 7 days

This whole process may take 30-40 days, there are other formalities to be completed like
getting a rubber stamp for your company, register for VAT and professional Tax,
Employees provident fund and medical insurance etc. But unlike Public Limited
Company you can start your operations once you get the Certificate of Registration and
finish rest of the work simultaneously.

7 STEPS TO REGISTER YOUR STARTUP WITH STARTUP INDIA
 Step 1: Incorporate your business
 You must first incorporate your business as a Private Limited Company or a
Partnership firm or a Limited Liability Partnership
 You have to follow all the normal procedures for registration of any business
like obtaining the certificate of Incorporation/Partnership registration, PAN, and
other required compliances.

Step 2: Register with Startup India
Then the business must be registered as a startup. The entire process is simple and online. All
you need to do is log on to the Startup India website and fill up the form with details of
your business and upload certain documents.
Step 3: Documents to be uploaded (in PDF format only)
a) A letter of recommendation/support
A letter of recommendation must be submitted along with the registration form. Any of the
following will be valid-
(i) A recommendation (regarding innovative nature of business) from an Incubator
established in a post-graduate college in India , in a format specified by the Department
of Industrial Policy and Promotion (DIPP);
OR

(ii) A letter of support by an incubator, which is funded (in relation to the project) by Government of India
as part of any specified scheme to promote innovation;
OR
(iii) A letter of recommendation (regarding innovative nature of business), from an Incubator, recognized
by the Government of India in DIPP specified format;
OR
(iv) A letter of funding of not less than 20% in equity, by any Incubation Fund/Angel Fund/Private Equity
Fund/Accelerator/Angel Network, duly registered with SEBI that endorses innovative nature of the
business;
OR
(v) A letter of funding by Government of India or any State Government as part of any specified scheme
to promote innovation;
OR
(vi) A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the
nature of the business being promoted.

b) Incorporation/Registration Certificate
c) Description of your business in brief
Step 4: Answer whether you would like to avail tax benefits
Startups are exempted from income tax for 3 years. But to avail these benefits, they must be
certified by the Inter-Ministerial Board (IMB). Start-ups recognized by DIPP, Govt. of India
can now directly avail IPR related benefits without requiring any additional certification from
IMB.

Step 5: Finally, you must self-certify that you satisfy the following conditions
a) You must register your new company as a Private Limited Company, Partnership firm or a
Limited Liability Partnership
b) Your business must be incorporated/registered in India, not before 5 years.
c) Turnover must be less than 25 crores per year.
d) Innovation is a must– the business must be working towards innovating something new or
significantly improving the existing used technology.
e) Your business must not be as a result of splitting up or reconstruction of an existing business

Step 6: Immediately get recognition number
That’s it! On applying you will immediately get a recognition number for your startup. The
certificate of recognition will be issued after the examination of all your documents.
If document is not uploaded/wrong document uploaded or a forged document has been
uploaded then there shall be to a fine of 50% of your paid-up capital of the startup with a
minimum fine of Rs. 25,000.

Step 7: Other areas
a) Patents, trademarks and/or design registration
If you need a patent for your innovation or a trademark for your business, you can easily
approach any from the list of facilitators issued by the government. You will need to bear
only the statutory fees thus getting an 80% reduction in fees.
b) Funding
One of the key challenges faced by many startups has been accessing to finance. Due to
lack of experience, security or existing cash flows, entrepreneurs fail to attract investors.
Besides, the high-risk nature of startups, as a significant percentage fail to take-off, puts
off many investors.
In order to provide funding support, Government has set up a fund with an initial corpus of
INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4 years (i.e. INR
2,500 crore per year). The Fund is in the nature of Fund of Funds, which means that it
will not invest directly into Startups, but shall participate in the capital of SEBI registered
Venture Funds.

Steps in Registering Startups

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