Startups are newly established businesses that can be started by one individual or group of individuals. They either develop new products/services or make innovative changes in the existing products/services in something better. India is a treasure of talent. To improve the Indian economy and attract talented entrepreneurs, the government takes many steps to promote startups. Startup India Scheme is initiated under the leadership of Prime Minister Narendra Modi.
A Private Limited company is a group of shareholders and capital made up of shares. An individual who has shares becomes the owner of the company and it can be transferred or sold. Business assets are separate from personal assets. Every shareholder is only responsible for his or her share of the total capital. They have to maintain records such as financial transactions, meetings, audits, etc.
It is of three types:-
A company limited by shares
A company limited by guarantee
It is an agreement in which there are more that one individual is involved. The profits, roles, and responsibilities are divided in the proportion defined in the partnership agreement. In the case of loss, every individual is responsible solely. Even personal assets can be used to recover the losses.
Limited Liability Partnership
This concept is introduced in 2009. An LLP functions as a structured business model. It is a separate legal entity and business assets are separate from the partner’s personal assets. Every partner has defined maximum liability according to his or her share capital in the Limited Liability Partnership.
In a sole proprietorship, there is only one person’s involvement and responsibility for the entire business. He or she has to bear all losses. Even personal assets can be used to recover the losses. Businesses and owners are not separate from each other. Any profit from business adds to the owner’s income for tax purposes.
One Person Company
OPC or One person company introduces in companies act 2013. It supports entrepreneurs who want to start a venture and allows them to create a single person economic entity. The main advantage of OPC Registration is that there can be only one member whereas two members are required for incorporating and maintaining a Private Limited Company or an LLP.
Section 8 Company
It is an organization that is registered as a Non-Profit Organization (NPO). NPO/company has its objective of promotion of arts, commerce, charity, education, protection of the environment, science, social welfare, sports, research, religion and intends to apply its profits, if any, or other income in promoting its objects. It functions exactly like a limited company including all the rights and obligations that come with such a company. However, it cannot use the words “Section 8” or “Limited” in its name.
Steps For Startup Company Registration India
If you are planning to apply for a startup (company registration)or a new business in India then there are some official procedures for it. Nowadays, all the documentation process is online. You do not need to go to the government office for every procedure and query. MCA (Ministry of Corporate Affairs) maintains official records of the company registration.
To make the process easy and quick, form ( INC-29 ) introduces. Company registration has merged a few steps such as DIN,Incorporation Application, and Business Name Approval into a single step or process.
There is an essential requirement of the Digital Signature Certificate in a Company. This is the first step towards registration. In this, you have to apply for the digital signatures of the directors or DSC. DSC is a valid e-signature on the documents and submits online. This is the safest way and helps you complete the new company registration online. There are some provisions given by The Information Technology Act, 2000. It emphasizes for use of Digital Signatures and is submitted in electronic form for documents. It is to ensure the security and authenticity of the documents filed electronically. All such filings are done under MCA 21 e-governance program.
It Normally takes 2 days to obtain DSC after submitting the documents.
STEP 2: INC-29 FORM PREPARING AND FILING
Now the next step towards Startup company registration India is INC- 29 form. This form requires certain documents for its preparation. Below are some documents regarding the INC-29 form which is as follows:-
Director’s Identification Number ( DIN number )
Memorandum and Articles of association ( MOA & AOA )
Registered office verification
Appointment letters and declaration
When you prepare your INC-29 form with the required documents, you have to file the forms for company formation. After that, you can move to the next step.
STEP 3: INCORPORATION CERTIFICATE
After submitting all the forms you will get an Incorporation certificate. It is the legal document relating to the formation of a company or startup business.