Company Registration and Firm Incorporation in Delhi NCR

Which business structure should I choose in India?

Start with three questions. Will you bring in co-founders, employees with stock options or outside investors? Is there a real risk of liabilities larger than what you are putting in, from customers, lenders or regulators? And how much yearly compliance are you willing to pay for? A business that answers yes, yes and "whatever it takes" is a private limited company. A business that answers no, no and "as little as possible" can start as a proprietorship or partnership.

Most people fall in between. Two chartered accountants or architects setting up a practice usually want an LLP: they get limited liability, the partners can share profits flexibly, and the compliance is lighter than a company's. A sole founder building a product who wants a company from day one, without bringing in a token second shareholder, can use a One Person Company (OPC). A family trading business with known customers and suppliers may be perfectly well served by a partnership firm with a carefully drafted deed.

Do not choose a structure only because it is cheapest to register this month. Investors in India generally invest in private limited companies, not in LLPs or partnerships, and banks often treat a company's balance sheet differently. Changing structure later is possible, but it involves fresh filings, transfer of assets and contracts, stamp duty in some cases and tax advice. If you expect to raise money within two years, register a company now.

Private limited, LLP, OPC, partnership and proprietorship compared

A plain comparison of the five common structures. Compliance and tax treatment change from time to time; your chartered accountant should confirm the tax position for your case.

How do I register a private limited company? The SPICe+ process in plain terms

A private limited company is registered online through the MCA's integrated form called SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus). It has two parts. Part A is for reserving the company's name. Part B is the incorporation application itself, filed with linked forms: the electronic memorandum of association (e-MoA), the electronic articles of association (e-AoA) and a form called AGILE-PRO-S, through which you can also apply for GST registration, EPFO and ESIC registration and a bank account.

The proposed directors need digital signature certificates (DSCs). Directors who do not already have a Director Identification Number (DIN) can be allotted one through the same form. Once the application is approved, the Central Registration Centre issues the certificate of incorporation with the company's Corporate Identity Number (CIN), along with the company's PAN and TAN. Stamp duty on the memorandum and articles is paid through the form, at the rate fixed by the state where the registered office is.

The process is the same whether the office is in Delhi, Noida, Ghaziabad or Gurugram, but the state matters for stamp duty and, later, for the ROC that has jurisdiction (the ROC for Delhi and Haryana, or the ROC at Kanpur for Uttar Pradesh), the NCLT bench that hears the company's disputes (see corporate lawyer in Delhi on which bench covers which state), and some state registrations.

Company registration step by step

This is the usual sequence for a private limited company. The same pattern, with fewer people, applies to an OPC.

1. Decide the essentials

   Settle the name options, the main business activity, the registered office, the authorised and paid-up capital, the shareholding split and who will be directors. Write these down; changing them after filing means a fresh round.

2. Get digital signatures

   Each proposed director and subscriber gets a DSC from a licensed certifying authority, which requires identity verification. Names on the DSC, PAN and Aadhaar should match exactly, or the filing will be rejected.

3. Reserve the name (SPICe+ Part A)

   You can propose names through Part A, which is checked against existing companies, LLPs and the rules on undesirable names. You can also file Part A and Part B together, but a rejected name then holds up the whole application.

4. Draft the memorandum and articles

   The MoA states the objects; the AoA sets the internal rules on share transfers, board powers, quorum and meetings. Standard articles work for some companies, but founders who have agreed on vesting, pre-emption or reserved matters should have those written into the articles.

5. File Part B with the linked forms

   Fill in director and subscriber details, the registered office with proof, the capital structure, and the linked e-MoA, e-AoA and AGILE-PRO-S forms. Pay the government fee and stamp duty online.

6. Respond to queries and receive the certificate

   The Central Registration Centre may raise queries or ask for resubmission. Once approved, you receive the certificate of incorporation with CIN, PAN and TAN, and can open the bank account and start the post-incorporation steps.

How long does company registration take, and why do applications get rejected?

When the documents are in order and the name is clearly available, registration can be completed in a matter of days. When there are queries, it can take a few weeks. We cannot promise a date, because approval depends on the Central Registration Centre's workload and how it views the name and documents.

Rejections and resubmissions usually come from a handful of causes: a name too similar to an existing company or a registered trademark, a name using words that need special approval, a mismatch between the name on the DSC and the PAN, an address proof that is too old or does not match the NOC from the owner, objects in the memorandum that are vague or include regulated activities like banking or insurance, or a foreign director's documents that have not been properly attested. Each of these is avoidable with a careful check before filing.

Choosing a company or brand name that will survive

The MCA's name check and a trademark check are two different things. The MCA only asks whether your proposed company name is identical or too similar to an existing company or LLP and whether it breaks the naming rules. It does not stop you from using a name that infringes someone's registered trademark, and if you do, the trademark owner can sue you for infringement and seek a change of your company name. A company can also be directed to change a name that is too similar to an existing company's.

Before you settle on a name, search the trademark register in the classes relevant to your business, and search the market. Words such as Bank, Insurance, National, Board or Commission either need approval from a regulator or the government, or are not allowed at all. Names that suggest a connection with the government or a foreign country raise questions. Once incorporated, apply for a trademark for the brand you will trade under, which is often different from the company name. Our page on trademark and copyright registration explains the trademark search, filing and examination stages.

LLP registration: who it suits and how it works

A limited liability partnership is a body corporate under the LLP Act 2008. It gives partners limited liability, like a company, while letting them run the business on the terms of an LLP agreement, much like a partnership. It needs at least two designated partners, at least one of whom must be resident in India. It suits professional practices, consultancies and small businesses with a few owners who do not plan to raise equity.

Registration is through the MCA: the name is reserved through the RUN-LLP form, and incorporation is filed through the FiLLiP form, with the designated partners' DSCs and DIN applications as needed. After incorporation, the LLP agreement must be filed in Form 3 within 30 days. Many LLPs skip this or file a generic agreement, which causes trouble later when partners disagree about profit share, retirement or capital. Write the agreement carefully: contributions, profit sharing, decision-making, admission and exit of partners, death, non-compete during the partnership, and dispute resolution.

Yearly compliance is lighter than a company's: an annual return in Form 11 and a statement of account and solvency in Form 8, with audit required only when turnover or contribution crosses the prescribed limits. There are no board meetings or AGMs in the company sense. The trade-off is that LLPs are harder to bring outside investors into, and foreign investment in LLPs is permitted only in sectors and on conditions set by the foreign exchange rules.

One Person Company (OPC): the rules after 2021

An OPC is a private company with a single member. Only a natural person who is an Indian citizen can form one, and since amendments to the rules in 2021 this includes Indian citizens who are not resident in India. The member must name a nominee, also an Indian citizen, who will become the member if the original member dies or becomes incapable of contracting. A person can be a member of only one OPC at a time.

The same 2021 changes removed the earlier rule that forced an OPC to convert into a private or public company once its paid-up capital or turnover crossed certain limits, and allowed voluntary conversion at any time. An OPC cannot carry on non-banking financial activities or make investments in securities of other bodies corporate as a business.

An OPC makes sense for a sole founder who wants limited liability and a company's credibility with clients and banks, but does not yet have a co-founder. It does not suit a founder who plans to bring in investors soon, because the OPC will have to convert into a private company first. If a co-founder is likely within a year, it is usually simpler to register a private limited company from the start.

Partnership firm: deed, stamp duty and registration

A partnership firm is formed by agreement between two or more persons to share the profits of a business carried on by all or any of them acting for all. It is governed by the Partnership Act 1932, and the number of partners cannot exceed 50. The firm is not a separate legal entity, and partners are personally liable, jointly and severally, for the firm's debts. That is the main reason growing businesses move out of this structure.

The partnership deed should be in writing, on stamp paper of the value fixed by the state's stamp law, and should cover capital, profit sharing, drawings, interest on capital, the bank account and who operates it, admission, retirement and death of partners, what happens to goodwill, and how disputes are resolved. Registration of the firm with the Registrar of Firms of the state is optional, but section 69 of the Act means an unregistered firm cannot sue a third party to enforce a contract, and a partner of an unregistered firm cannot sue the firm or co-partners to enforce rights under the deed (other than for dissolution and accounts). In practice, register the firm.

Disputes between partners are among the most bitter we see, often because the deed is a one-page format that says nothing about exit. A partnership deed is short to write well and expensive to fight over when written badly.

Sole proprietorship: there is no registration, so what proves the business exists?

A sole proprietorship is not a legal entity separate from its owner, and there is no single registration that creates it. The business exists in law because you carry it on, and you are personally liable for everything it owes. Banks and customers will still want proof of the business before they deal with it in its trade name.

The usual proofs are GST registration in the trade name (where required or taken voluntarily), Udyam registration as a micro, small or medium enterprise, registration under the state's shops and establishments law where it applies, a trade licence from the municipal body for certain businesses, and a current account in the business name. Udyam registration is online, based on PAN and Aadhaar, and is free; it is also the gateway to the protections against delayed payment under the MSMED Act 2006. A proprietorship suits freelancers, consultants and small traders who want to start quickly and keep compliance minimal.

GST registration basics for a new business

Whether you must register for GST depends on your turnover, the state, and whether you supply goods or services. Most states have one threshold for suppliers of goods and a lower one for suppliers of services, and some states have lower thresholds still. Certain businesses must register regardless of turnover, including most businesses making inter-state supplies of goods and those selling through e-commerce operators. You can also register voluntarily, which many businesses do because their customers want GST invoices and input tax credit.

GST registration is state-wise: a business operating in Delhi and Uttar Pradesh needs a separate registration (GSTIN) in each state where it has a place of business. The application is made on the GST portal, can be linked from SPICe+ for a new company, and involves Aadhaar authentication of the promoters and proof of the place of business. Tax officers sometimes physically verify the premises, so the address should be genuine and usable. Small businesses may opt for the composition scheme, subject to conditions. The rates, returns and tax planning are matters for your chartered accountant; our role is the structure, the agreements and any dispute.

Documents needed for company, LLP and firm registration

Exact requirements change with MCA updates, so we confirm the current list before filing. This is what is usually needed.

What must a new company do in its first six months?

The certificate of incorporation is the start, not the end. The board must hold its first meeting within 30 days of incorporation, and the first auditor must be appointed by the board within 30 days. Share certificates must be issued to subscribers within two months. The company must open a bank account, the subscribers must pay for their shares, and a declaration of commencement of business (Form INC-20A) must be filed within 180 days of incorporation; a company that fails to file it faces penalties and can be struck off.

The company should also set up its statutory registers (members, directors, charges and others), obtain any state or sector licences it needs, register for GST, professional tax or labour registrations where applicable (our page on labour and industrial laws covers the new Labour Codes), and put basic contracts in place with employees, consultants and the first customers. After the first year come the annual cycle of board meetings, the AGM, audited financial statements and the annual return. Our corporate law consultancy page sets out the yearly compliance calendar.

Foreign directors, NRI founders and foreign investment

Foreign nationals and non-resident Indians can be directors and shareholders of an Indian private company, but every company must have at least one director who is resident in India as defined in section 149(3) of the Companies Act. Foreign directors need a DSC and a DIN, and their identity and address documents usually have to be apostilled (for countries party to the Hague Convention) or consularised. Delays in getting these documents attested are the most common reason incorporations with foreign directors take longer.

Investment from outside India is governed by the Foreign Exchange Management Act 1999 and the rules under it. Many sectors allow foreign investment under the automatic route; some need government approval or have caps; a few are prohibited. Share allotments to foreign investors must be priced and reported as the rules require, through the RBI's online reporting system within the prescribed time. These questions should be settled before the money is sent, not after, because rectifying a reporting default is slower than doing it right. Your chartered accountant and authorised dealer bank will handle much of the reporting; we deal with the agreements and the legal structure.

Mistakes people make when registering a business

• Splitting shares equally by default. A 50:50 company has no tie-breaker. If equal ownership is genuinely right, build a deadlock mechanism into the articles and agreement.
• Making a relative a director to complete the numbers. A nominal director is still a director, with duties and possible liability. Choose people who understand what they are signing.
• Using a residential address without the owner's NOC. A registered office needs a proper NOC and current proof. A disputed address causes problems with GST verification and notices.
• Ignoring the founders' agreement. Registration gives each founder shares. Only a signed agreement decides what happens to those shares if a founder leaves early.
• Not checking the trademark. A company name approved by the MCA can still infringe someone's trademark, forcing a rebrand after you have printed everything.
• Forgetting the 180-day declaration. Failing to file INC-20A on time is one of the most common reasons new companies face penalties and strike-off notices.

Can I convert from one structure to another later?

Yes, the law provides routes for the common conversions. A partnership firm or an LLP can register as a company under Part I of Chapter XXI of the Companies Act. A partnership firm or a private company can convert into an LLP under the LLP Act, following the conditions in its schedules. An OPC can convert into a private company by altering its memorandum and articles, and a private company can convert into a public company. A proprietorship cannot convert as such; its business and assets are transferred to a new company, usually under a business transfer agreement.

Each conversion involves consents from creditors and partners or shareholders, fresh filings, transfer of licences and registrations, updating contracts with customers and suppliers, and tax consequences that your chartered accountant must look at in advance. It is entirely workable, but it is not a formality. That is why we encourage founders to choose the right structure the first time where they can.

Do I need a lawyer to register a company, or is an online filing service enough?

For a simple registration with standard documents, a company secretary, chartered accountant or online filing service can do the filing. We say that openly. The reason to involve a lawyer is the part that filing services usually do not do: advising on the structure, drafting articles that reflect what the founders have actually agreed, writing the founders' agreement, the LLP agreement or the partnership deed, assigning intellectual property to the new entity, and setting up the first contracts.

In our work, Advocate Sadhna Singh usually takes the first meeting, collects the details and drafts the documents; Advocate B.K. Singh reviews the structure and the agreements, particularly where there are several founders, family members or foreign investors involved. Where you already have a CA or CS, we coordinate with them. Fees are discussed at the first meeting and agreed in writing; government fees, stamp duty and DSC charges are separate. You can send your details in advance through the online enquiry.

Before you file: decisions to settle

• Structure: company, LLP, OPC, partnership or proprietorship, and why.
• Two or three names, checked against company records and the trademark register.
• Registered office address with current proof and the owner's NOC.
• Who the directors or designated partners will be, and at least one resident in India.
• Capital, shareholding or contribution, and whether any founder money should be a loan.
• Vesting, IP assignment and exit terms between founders, in writing.
• Whether GST registration is needed from day one, and in which states.
• Who will handle accounts and yearly filings once the entity is registered.