Procedure 1
Obtain director identification number (DIN) online from the Ministry of Corporate Affairs portal (National)
Time to complete: 1 day
Cost to complete: INR 100
Procedure:The process to obtain the Director Identification Number (DIN) is as follows:
1. Obtain the provisional DIN by filing application Form DIN-1 online. This form is on the Ministry of Corporate Affairs 21st Century (MCA 21) portal. The provisional DIN is immediately issued.
The application form must then be printed and signed and sent for approval to the ministry by courier along with proof of identity and (address):
a. Identity proof (any of the following): Permanent Account Number card, driver’s license, passport, or voter card;
b. Residence proof (any of the following): driver’s license, passport, voter card, telephone bill, ration card, electricity bill, bank statement;
2. The concerned authority verifies all the documents and, upon approval, issues a permanent DIN. The process takes about 4 weeks.
The application form must then be printed and signed and sent for approval to the ministry by courier along with proof of identity and (address):
a. Identity proof (any of the following): Permanent Account Number card, driver’s license, passport, or voter card;
b. Residence proof (any of the following): driver’s license, passport, voter card, telephone bill, ration card, electricity bill, bank statement;
2. The concerned authority verifies all the documents and, upon approval, issues a permanent DIN. The process takes about 4 weeks.
Procedure 2
Obtain digital signature certificate online from private agency authorized by the Ministry of Corporate Affairs (National)
Time to complete: 3 days
Cost to complete: INR 1,500
Procedure: To use the new electronic filing system under MCA 21, the applicant must obtain a Class-II Digital Signature Certificate. The
digital signature certificate can be obtained from one of six private
agencies authorized by MCA 21 such as Tata Consultancy Services.
Company directors submit the prescribed application form along with
proof of identity and address. Each agency has its own fee structure,
ranging from INR 400 to INR 2650.
Procedure 3
Reserve the company name online with the Registrar of Companies (ROC) (National)
Time to complete: 2 days
Cost to complete: INR 500
Procedure: Company name approval must be done
electronically. Under e-filing for name approval, the applicant can
check the availability of the desired company name on the MCA 21 web site.
The ROC in Mumbai has staff members working full time on name reservations (approximately 3 but more if the demand increases). A maximum of 6 suggested names may be submitted. They are then checked by ROC staff for any similarities with all other names in India.
The MCA receives approximately 50-60 applications a day. After being cleared by the junior officer, the name requests are sent to the senior officer for approval.
Once approved, the selected name appears on the website. Applicants need to keep consulting the website to confirm that one of their submitted names was approved.
In practice, it takes 2 days for obtaining a clearance of the name if the proposed name is available and conforms to the naming standards established by the Company Act (1 day for submission of the name and 1 day for it to appear on the MCA website).
The ROC in Mumbai has staff members working full time on name reservations (approximately 3 but more if the demand increases). A maximum of 6 suggested names may be submitted. They are then checked by ROC staff for any similarities with all other names in India.
The MCA receives approximately 50-60 applications a day. After being cleared by the junior officer, the name requests are sent to the senior officer for approval.
Once approved, the selected name appears on the website. Applicants need to keep consulting the website to confirm that one of their submitted names was approved.
In practice, it takes 2 days for obtaining a clearance of the name if the proposed name is available and conforms to the naming standards established by the Company Act (1 day for submission of the name and 1 day for it to appear on the MCA website).
Procedure 4
Stamp the company documents at the State Treasury (State) or authorized bank (Private)
Time to complete: 1 day
Cost to complete: INR 1,300 (INR 200 for MOA + INR
1,000 for AOA for every INR 500,000 of share capital or part thereof +
INR 100 for stamp paper for declaration Form 1)
Procedure: The request for stamping the
incorporation documents should be accompanied by unsigned copies of the
Memorandum and Articles of Association, and the payment receipt.
The company must ensure that the copies submitted to the Superintendent of Stamps or to the authorized bank for stamping are unsigned and that no promoter or subscriber has written anything on it by hand. The Superintendent returns the copies, one of which is duly stamped, signed, and embossed, showing payment of the requisite stamp duty. The rate of stamp duty varies from state to state.
According to Article 10 and Article 39 of the Indian Stamp Act (1899), the stamp duty payable on the Memorandum and Articles of Association for company incorporation in Mumbai, Maharashtra, is as follows: a. Articles of Association: INR 1000/- for every INR 500,000/- of share capital (or part thereof), subject to a maximum of INR 50,000,000; b. Memorandum of Association: INR 200; c. Form-1 (declaration of compliance): INR 100.
The company must ensure that the copies submitted to the Superintendent of Stamps or to the authorized bank for stamping are unsigned and that no promoter or subscriber has written anything on it by hand. The Superintendent returns the copies, one of which is duly stamped, signed, and embossed, showing payment of the requisite stamp duty. The rate of stamp duty varies from state to state.
According to Article 10 and Article 39 of the Indian Stamp Act (1899), the stamp duty payable on the Memorandum and Articles of Association for company incorporation in Mumbai, Maharashtra, is as follows: a. Articles of Association: INR 1000/- for every INR 500,000/- of share capital (or part thereof), subject to a maximum of INR 50,000,000; b. Memorandum of Association: INR 200; c. Form-1 (declaration of compliance): INR 100.
Once the memorandum and articles of association have been stamped,
they must be signed and dated by the company promoters, including the
company name and the description of its activities and purpose,
father-“s name, address, occupation, and the number of shares
subscribed. This information must be in the applicant’s handwriting and
duly witnessed.
Procedure 5
Get the Certificate of Incorporation from the Registrar of Companies, Ministry of Corporate Affairs (National)
Time to complete: 5 days
Cost to complete: INR 14,133 (see comments)
Procedure: The following forms are required to be electronically filed on the website of the Ministry of Company Affairs:
e-form 1; e-form 18; and e-form 32.
Along with these documents, scanned copies of the consent of the initial directors, and also of the signed and stamped form of the Memorandum and Articles of Association, must be attached to Form 1.
Along with these documents, scanned copies of the consent of the initial directors, and also of the signed and stamped form of the Memorandum and Articles of Association, must be attached to Form 1.
The fees for registering a company can be paid online by credit card
or in cash at certain authorized banks. One copy of the Memorandum of
Association, Articles of Association, Form 1, Form 32, Form 18 and the
original name approval letter, consent of directors and stamped power of
attorney must be physically submitted to the Registrar of Companies.
The certificate of incorporation is sent automatically to the registered
office of the company by registered or rush mail.
The registration fees paid to the Registrar are scaled according to
the company’s authorized capital (as stated in its memorandum):
a. INR 100,000 or less: INR 4,000. If the nominal share
capital is over INR 100,000, additional fees based the amount of
nominal capital apply to the base registration fee of INR 4,000:
b. For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 1,00,000, up to INR 500,000: INR 300;
c. For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 500,000, up to INR 5,000,000: INR 200;
d. For every INR 10,000 of nominal share capital or
part of INR 10,000 after the first INR 5,000,000, up to INR 1
10,000,000: INR 100;
e. For every INR 10,000 of nominal share capital or part of INR 10,000 after the first INR 10,000,000: INR 50.
The payment of fees can be made:
1. offline: one can upload all incorporation documents
and generate the payment challan. Against this challan, the applicant
must obtain a demand draft for filing fees amount in favour of -” the
Pay and Accounts Office, Ministry of Corporate Affairs, New Delhi” and
this demand draft is payable in Mumbai. The applicant must make the
payment at specified branches of certain banks. It takes around one week
for clearance of payment. Only after the clearance of payment does the
ROC accept the documents for verification and approvals;
2. online: the applicant makes the payment by credit
card and the system accepts the documents immediately. Please note that
in Mumbai, the ROC requests for pre-scrutiny of documents for any
corrections, before they are uploaded. Once the documents have been
uploaded, they can then be approved without any further correction. The
online filing mechanism requires only one copy of scanned documents to
be filed (including stamped MOA, AOA, and POA).
Schedule of Registrar filing fees for the articles and for the other forms (l, 18, and 32):
a. INR 200 for a company with authorized share capital of more than INR 100,000 but less than INR 500,000;
b. INR 300 for a company with nominal share capital of INR 500,000 or more but less than INR 2,500,000;
c.INR 500 for a company with nominal share capital of INR 2,500,000 or more.
Procedure 6
Make a seal (Private)
Time to complete: 1 day
Cost to complete: INR 350 (cost depends on the number of seals required and the time period for delivery)
Procedure: Although making a company seal is not a
legal requirement for the company to be incorporated, companies require a
seal to issue share certificates and other documents. The cost depends
on the number of words to be engraved, the number of seals required, and
the time period for delivery. The cost can range from INR 300 to INR
500.
Procedure 7.
Obtain a Permanent Account Number (PAN) from an authorized
franchise or agent appointed by the National Securities Depository Ltd.
(NSDL) or the Unit Trust of India (UTI) Investors Services Ltd., as
outsourced by the Income Tax Department (National)
Time to complete: 7 days
Cost to complete: INR 67 (INR 60 application fee + 12.36% service tax + INR 5 for application form, if not downloaded)
Procedure: Under the Income Tax Act, 1961, each
person must quote his or her Permanent Account Number (PAN) for tax
payment purposes and the Tax Account Number (TAN) for depositing tax
deducted at source. The Central Board of Direct Taxes (CBDT) has
instructed banks not to accept any form for tax payment (challan)
without the PAN or TAN, as applicable. The PAN is a 10-digit
alphanumeric number issued on a laminated card by an assessing officer
of the Income Tax Department.
In order to improve PAN-related services, the Income Tax department
(effective July 2003) outsourced their operations pertaining to
allotment of PAN and issuance of PAN cards to UTI Investor Services Ltd,
which was authorized to set up and manage IT PAN Service Centers in all
cities where there is an Income Tax office. The National Securities
Depository Limited (NSDL) has also launched PAN operations effective
June 2004, setting up TIN Facilitation Centers.
The PAN application is made through the above mentioned service
centers using Form 49A, with a certified copy of the certificate of
registration, issued by the Registrar of Companies, along with proof of
company address and personal identity. A fee of INR 60 (plus applicable
taxes) applies for processing the PAN application. IT PAN Service
Centers or TIN Facilitation Centers will supply PAN application forms
(Form 49A), assist the applicant in filling out the form, collect
filled-out forms, and issue an acknowledgement slip. After obtaining PAN
from the Income Tax department, UTIISL or NSDL as the case may be, will
print the PAN card and deliver it to the applicant.
The application for PAN can also be made online but the documents
still need to be physically dropped off for verification with the
authorized agent. For more details see(www.incometaxindia.gov.in , www.utiisl.co.in , and www.tin.nsdl.co.in )
Procedure 8
Obtain a Tax Account Number (TAN) for income taxes deducted
at source from the Assessing Office in the Mumbai Income Tax Department
Time to complete: 7 days
Cost to complete: INR 57 (INR 50 application fee + 12.36% service tax)
Comment: The Tax Account Number (TAN) is a 10-digit
alphanumeric number required of anyone responsible for deducting or
collecting tax. The provisions of Section 203A of the Income Tax Act
require that all persons who deduct or collect tax at the source must
apply for a TAN. The section also makes it mandatory for the TAN to be
quoted in all tax-deducted-at-source (TDS) and tax-collected-at-source
(TCS) returns, all TDS/TCS payment challans, and all TDS/TCS
certificates issued.
Failure to apply for a TAN or to comply with any of the other
provisions of the section is subject to a penalty of INR 10,000/- . The
application for allotment of a TAN must be filed using Form 49B and
submitted at any TIN Facilitation Center authorized to receive e-TDS
returns.
Locations of TIN Facilitation Centres can be found at www.incometaxindia.gov.in
and http://tin.nsdl.com The processing fee for both applications (a new
TAN or a change request) is INR 50 (plus applicable taxes). After
verification of application, the same is sent to the Income Tax
Department and upon satisfaction the department issues the TAN to the
applicant.
The national government levies the income tax. Since outsourcing, any
authorized franchise or agent appointed by the National Securities
Depository Services Limited (NSDL) can accept and process the TAN
application. The application for a TAN can be made either online through
the NSDL website (www.tin-nsdl.com) or offline.
Upon payment of the fee by credit card, the hard copy of the application must be physically filed with the NSDL.
Procedure 9
Register with the Office of Inspector, Shops, and Establishment Act (State/Municipal)
Time to complete: 2 days
Cost to complete: INR 6,500 (INR 2000 + 3 times registration fee for trade refuse charges)
Procedure: A statement containing the employer-“s
and manager-“s names and the establishment’s name (if any), postal
address, and category must be sent to the local shop inspector with the
applicable fees.
According to Section 7 of the Bombay Shops and Establishments
Act,-(1948), the establishment must be registered as follows: – Under
Section 7(4), the employer must register the establishment in the
prescribed manner within 30 days of the opening of the business. – Under
Section 7(1), the establishment must submit to the local shop inspector
Form A and the prescribed fees for registering the establishment. –
Under Section 7(2), after Form A and the prescribed fees are received
and the correctness of the statement on the form is satisfactorily
audited, the certificate for the registration of the establishment is
issued on Form D, according to the provisions of Rule 6 of the
Maharashtra Shops and Establishments Rules of 1961.
Since the amendments in the Maharashtra Shops and Establishment
(Amendment) Rules, 2003 dated 15th December 2003, the Schedule for fees
for registration and renewal of registration (as per Rule 5) is as
follows:
a. 0 employees: INR 100;
b. 1 to 5 employees: NR 300;
c. 6 to 10 employees: INR 600;
d. 11 to 20 employees: INR 1000;
e. 21 to 50 employees: INR 2000;
f. 51 to 100 employees: INR 3500;
g. 101 or more employees: INR 4500.
a. 0 employees: INR 100;
b. 1 to 5 employees: NR 300;
c. 6 to 10 employees: INR 600;
d. 11 to 20 employees: INR 1000;
e. 21 to 50 employees: INR 2000;
f. 51 to 100 employees: INR 3500;
g. 101 or more employees: INR 4500.
Hence in the given case the registration fees would be INR 2000, as
there are 50 employees In addition, an annual fee (three times the
registration and renewal fees) is charged as trade refuse charges (TRC),
under the Mumbai Municipal Corporation Act,-(1888).
Procedure 10
Register for Value-Added Tax (VAT) at the Commercial Tax Office (State)
Time to complete: 12 days
Cost to complete: INR 5,100 (registration fee INR 5000 + stamp duty INR 100)
Procedure: Beginning April 1, 2005, the sales tax was replaced by the VAT, which requires registration by filing Form 101.
The authorized representative signing the application must be available at the Sales-Tax Office on the day of application verification. The applicant goes to the Sales-Tax Office and up to the registration counter. The clerk at the counter verifies that the applicant has all the required documents and gives the applicant a token (waiting number). After a short wait, the applicant-“s number is called and the applicant approaches the desk of a sales-tax officer.
The authorized representative signing the application must be available at the Sales-Tax Office on the day of application verification. The applicant goes to the Sales-Tax Office and up to the registration counter. The clerk at the counter verifies that the applicant has all the required documents and gives the applicant a token (waiting number). After a short wait, the applicant-“s number is called and the applicant approaches the desk of a sales-tax officer.
There, all the information on Form 101 is manually entered into the
system by the officer. Within 10 minutes, the system generates a Tax
Identification Number (TIN) Thereafter, the company is considered fully
registered to pay taxes. However, the applicant must wait between 10 and
15 days to receive the VAT registration certificate by mail.
In addition to Form 101, other accompanying documentation includes:
1) Certified true copy of the memorandum and articles of association of the company;-
2) Proof of permanent residential address. At least 2 of the following documents must be submitted: copy of passport, copy of driver’s license, copy of election photo identity card, copy of property card or latest receipt of property tax from the Municipal Corporation, copy of latest paid electricity bill in the name of the applicant;-
3) Proof of place of business (for an owner, in the case of Doing Business): Proof of ownership of premises viz. copy of property card, ownership deed, agreement with the builder or any other relevant documents;-
4) One recent passport-sized photograph of the applicant;-
5) Copy of Income Tax Assessment Order with PAN or copy of PAN card;-
1) Certified true copy of the memorandum and articles of association of the company;-
2) Proof of permanent residential address. At least 2 of the following documents must be submitted: copy of passport, copy of driver’s license, copy of election photo identity card, copy of property card or latest receipt of property tax from the Municipal Corporation, copy of latest paid electricity bill in the name of the applicant;-
3) Proof of place of business (for an owner, in the case of Doing Business): Proof of ownership of premises viz. copy of property card, ownership deed, agreement with the builder or any other relevant documents;-
4) One recent passport-sized photograph of the applicant;-
5) Copy of Income Tax Assessment Order with PAN or copy of PAN card;-
6) challan on Form No. 210 (original) showing payment of registration
fee at INR 5000 (in case of voluntary RC) and INR 500 (in other cases).
The whole process will be put online by the spring of 2009. This
means that rather than physically having to go to the office, companies
will fill in all their details online for Form 101 and then go to the
office only so that the Sales Tax Office can verify the above
listed-documentation.
Procedure 11
Register for Profession Tax at the Profession Tax Office (State)
Time to complete: 2 days
Cost to complete: No cost
Procedure: According to section 5 of the Profession
Tax Act, every employer (not being an officer of the government) is
liable to taxation and shall obtain a certificate of registration from
the prescribed authority. The company is required to apply to the
registering authority using Form 1.
The registration authority for the Mumbai area is located at Vikarikar Bhavan, Mazgaon in Mumbai.
Depending on the nature of the business, the application should be
supported with such documents as proof of address, details of company
registration number under the Indian Companies Act (1956), details of
the head office (if the company is a branch of company registered
outside the state), company deed, certificates under any other act, and
so forth.
Procedure 12
Register with Employees’ Provident Fund Organization (National)
Time to complete: 12 days
Cost to complete: No cost
Procedure: The Employees Provident Funds and
Miscellaneous Provisions Act (1952) applies to an establishment,
employing 20 or more persons and engaged in any of the 183 industries
and classes of business establishments, throughout India excluding the
State of Jammu and Kashmir.
The applicant fills in an application and is then allotted a social
security number. The Provident Fund registration focuses on delinquent
reporting, underreporting, or non-reporting of workforce size. Provident
Fund registration is optional if the workforce size is not more than
20. The employer is required to provide necessary information to the
concerned regional Provident Fund Organization (EPFO) in the prescribed
manner for allotment of Establishment Code Number. No separate
registration is required for the employees.
Nevertheless, all eligible employees are required to become members
of the Fund and individual account number is allotted by the employer in
the prescribed manner. As per an internal circular, the code number is
to be allotted within 3 days of submission, if the application is
complete in all respects. However, in many cases applicants have
received the intimation letter with the code number in 12 to 15 days. An
online application facility is not provided so far.
Procedure 13
Register for medical insurance at the regional office of the Employees’ State Insurance Corporation (National)
Time to complete: 9 days
Cost to complete: No cost
Procedure: Registration is the process by which
every employer/factory and every paid employee is identified for
insurance purposes and their individual records are set up for them.
As per the Employees’ State Insurance (General), Form 01 must be
submitted by the employer for registration. It takes 3 days to a week
for the Employer Code Number to be issued. The-” “intimation letter””-
containing the Code Number is mailed to the employer and that takes an
additional couple of days.
The Employee-“s individual insurance is a separate process that is
initiated upon the employer-“s registration. The employer is responsible
for submitting the required declaration form and employees are
responsible for providing correct information to the employer. The
employee temporary cards (ESI Cards) are issued on the spot by the local
offices in many places.
The temporary cards are valid for 13 weeks from the date of the
employees’ appointment. It takes about 4 to 5 weeks to get a permanent
ESI card.
We also did a series of posts about the legal information of doing
business in India in a 4 part series. Here are those articles that you
may find extremely useful in your quest to do business in India.
