Incorporating Your Business in India: What You Need to Know


Starting a business in India has its advantages and opportunities. The country has thousands of businesses from high street shops to local vendors. Many people here are eager to start a business and that’s one of the main reasons for India’s growing economy. While this may sound simple, there’s so much effort that goes in.

The legal process of registering your company or business can be time-consuming and complicated, especially if it’s the first time you’re dealing with the regulatory requirements. The incorporation of a company in India is not that tough if you know the right process. Let’s take a quick look at the process of incorporating and the things that will help make the process smooth.

What Is Incorporation?

In simple terms, incorporation is registering your company or business as a separate entity following all the laws. Generally, when you start a business, you will have its equity distributed to investors, shareholders, and co-owners. Therefore, to make it a single entity owned by the owner, the business needs to be registered.

A very good example of an incorporated company is Google India. When you incorporate your business, you separate your personal assets from your business assets, which protects your personal assets from any liabilities that your business may incur.

Types of Companies

There are several types of companies that you can incorporate in India. Here are some of the common ones:

  • Pvt. Ltd (Private Limited) Company– When you want to register your business as Pvt Ltd., you should have at least two shareholders and the maximum can go up to 100+. Once the business is registered as Pvt. Ltd., it becomes a professional entity and is not part of your personal entity, and the shareholder’s liability is constrained to the amount of their investment. When you’re registering a business, it’s always recommended to opt for business liability insurance. 
  • Public Limited Company – Registering a company as the public has several advantages, including the fact that it can have as many shareholders, including the business owner, which means owners will have limited liability, and they are not the only ones responsible for debts and losses. Plus, you can list the company on a trading platform where you can sell your shares and raise funds from the public. Some examples include Marks & Spencer, Tesco and AstraZeneca.
  • One-Person Company –  These types of companies will have only one director or shareholder. Though the company is registered as Pvt. Ltd., it does not have to follow the same rules as private companies. The main agenda of registering as a one-person company is to avoid the complications and hurdles of legal entities. Amazon is an amazing example of a one-person company because initially, it started as an OPC.

Steps to Incorporate Your Business in India

You will need to have a:

  1. Digital Signature Certificate 
  2. Director Identification Number 
  3. Unique Company Name
  4. Apart from this, you will need to file a Memorandum of Association (MOA) and Articles of Association (AOA) and obtain a Certificate of Incorporation 

Despite the fact that incorporating a business in India can be difficult, with the right advice, it can be easy and stress-free. It’s important to follow all relevant laws and regulations to prevent legal issues in the future. Once your company has been registered, you can start your business in India stress-free and take advantage of the growing Indian economy.