Setting up a company is easy. You just need the required legal documents and then you are good to go. But in reality, it may be more complicated than it seems at first sight. That’s because setting up your own company can involve a number of steps, many details and tedious tasks and it’s not just about selecting the right delivery challan format. Even if you have an accountant who helped you create your initial business documents, establishing your new company may not be that easy due to multiple requirements and processes which have to be followed correctly. So here in this article, we will try to explain it all. But before we tell you the steps to register the company let’s take a quick look at the different company structures possible:
What are the different types of company structures?
One Person Company (OPC)
One Person Company is a type of business structure that has been used by individuals to start their own businesses. OPC is a concept where the owner creates a legal entity, which is basically a separate legal entity and can be owned by an individual. It is important to note that this type of company does not have any employees or employees and therefore, the owner will only have limited liability in case he or she makes any mistakes or accidents during the operations of the company.
Limited Liability Partnership (LLP)
LLP is one of the most common business structures in India, as it allows for multiple partners to share profits and losses and even liabilities in case there are any accidents or mistakes made by one of them during the operation of their respective companies. LLP also allows for multiple partners from different countries to work together as one larger group within India itself.
Private Limited Company (PLC)
A private limited company is a type of legal entity created under the Companies Act, 2013 (Section 25) wherein one or more persons owns the shares in such company but it does not have any employees, shareholders or other stakeholders outside the persons who own the shares therein, i.e., there are no directors or managers involved in running such companies; all decisions will be taken by owners only when required by law
Public Limited Company (PLC)
A public limited company is a legal entity, which is registered with the Registrar of Companies. It can be publicly traded and is usually owned by a consortium of investors or shareholders. The shares of the PLC can be divided into two types: ordinary and preference shares. The holders of ordinary shares have rights over their profits while the holders of preference shares have rights over their losses. Public limited companies are similar to private limited companies with one major difference being that they are listed on the stock exchanges.
Important steps for registering a company
- The first step in setting up a company is to acquire a Digital Signature Certificate(DSC) from the Department of Trade and Industry (DTI). To acquire this certificate, you will need to submit an application form, along with payment for the appropriate fees. The DSC will be valid for one year from the date of issue.
- Go to the Ministry of Corporate Affairs (MCA) website, and click on “Register a new company”.
- On the next page, fill in all the details and submit them to the government.
- Once your registration is approved, you will receive a company number along with a Company Identification Number (DIN) which is necessary for opening bank accounts and filing Annual Returns with the MCA. This is also the step where you should start learning about the tax-related rules and things like oltas challan. You can visit Khatabook to learn more about the steps to be followed after setting up the company and different tax norms and challans.