Registering a company is a crucial step in establishing a business. However, the time it takes to complete the registration process can vary depending on several factors. This article will focus on the timeline for registering a company, specifically emphasizing private limited company registration. We will explore the different stages involved in the registration process, the typical timeline for each stage, and the factors that can influence the overall time it takes to register a company. This information can be helpful for entrepreneurs and business owners planning to establish a new company and want to estimate the time required for the registration process.
What are the types of business structures in India?
Proprietorship Firm
A proprietorship firm can be established and managed by a single person. Only one person runs the business, and it is ideal for small business owners with low investments. The entire control of the business will be with the sole proprietor, who can enjoy the profits, but he/she will also have to bear all the business losses.
Partnership Firm
Two or more persons enter into a partnership and establish a partnership firm. The partners of the firm equally share the profits derived from the business. They will also have to bear the losses of the firm. The partnership firm is regulated under the Partnership Act, 1932. It is ideal for small businesses run by two or more persons with low investment.
One Person Company (OPC)
Recently introduced in the year 2013, an OPC is the best way to start a company if there exists only one promoter or owner. It enables a sole proprietor to carry on his work and still be part of the corporate framework. It is registered under the Companies Act, 2013. It is ideal for small businesses who want to raise capital.
Limited Liability Partnership (LLP)
An LLP is a separate legal entity where the liabilities of partners are only limited only to their agreed contribution. An LLP is established under the Limited Liability Act, 2008 with the Registrar of Companies (ROC). It has features of both the partnership firm and the company. It is ideal for businesses established by partners who want limited liability.
Private Limited Company (PLC)
A PLC in the eyes of the law is regarded as a separate legal entity from its founders. The directors of the company look after the affairs of the company. The shareholders (stakeholders) invest in the company and are part owners. A PLC is registered under the Companies Act, 2013 with the ROC. It is ideal for medium to big businesses who wish to raise capital.
Public Limited Company
A Public Limited Company is a company established by seven or more members under the Companies Act, 2013. The directors are responsible for the affairs of the company. It has a separate legal existence and the liability of its members are limited to the shares they hold. It is ideal for medium to big businesses who wish to raise capital from the public.
You can choose the business structure that suits your business needs and accordingly register your business.
How many days does it take to register a company?
In India, registering a Private Limited Company typically takes 10-18 working days, provided all the required documents are submitted, and there are no complications. However, the actual time may vary depending on various factors.
Timeline for registering a Private Limited company in India
The timeline for registering a private limited company in India can vary depending on the factors mentioned earlier. However, here is a general timeline for registering a private limited company in India:
- Obtain Digital Signature Certificate (DSC) and Director Identification Number (DIN): The first step in registering a private limited company in India is to obtain a DSC and DIN for all the directors. This can take around 1-2 days.
- Apply for name availability: Once the DSC and DIN are obtained, the next step is to apply for name availability with the Registrar of Companies (ROC). This process usually takes around 2-3 days.
- Draft the Memorandum of Association (MoA) and Articles of Association (AoA): After the name is approved, the MoA and AoA must be drafted. This can take around 2-3 days.
- File incorporation documents: Once the MoA and AoA are drafted, the next step is to file the incorporation documents with the ROC. This includes Form SPICe (Simplified Proforma for Incorporating Company Electronically) and Form URC-1 (Application by a company for registration under section 366). This process usually takes around 5-7 days.
- Obtain Certificate of Incorporation: After the incorporation documents are filed, the ROC will verify the documents and issue a Certificate of Incorporation (CoI). This process usually takes around 2-3 days.
Overall, the timeline for registering a private limited company in India can take around 12-18 days, depending on the time taken to complete each step and the workload of the government office processing the application.
Factors to be Considered
- Availability of name: The availability of the chosen name for the company is crucial. If the name is already taken or similar to an existing name, it may take longer to get the name approved by the Registrar of Companies (ROC).
- Completeness of documentation: The completeness and accuracy of the documentation submitted can also affect the overall time it takes to register a private limited company in India. Any errors or missing information in the application can lead to delays in processing.
- Type of company: The type of company being registered can also affect the overall time it takes to register a private limited company. For example, registering a subsidiary company of a foreign company can take longer due to additional documentation requirements.
- State of registration: The state where the company is being registered can also affect the overall time it takes to register a private limited company in India. Some states have a faster registration process than others.
- Government processing time: The time it takes for the government to process the application can also affect the overall time it takes to register a private limited company in India. The processing time can vary depending on the workload of the government office processing the application.
- Hiring professionals: Hiring lawyers, chartered accountants, or company secretaries can help complete the registration process faster.
FAQs
Why is it important to choose the right business structure?
Comparative List of Different Types of Business Structures in India?
| Company type | Ideal for | Tax advantages | Legal compliances |
| Limited Liability Partnership | Service-oriented businesses or businesses that have low investment needs | Tax holiday for first 3 years under Startup India and benefit on depreciation | Business tax returns and ROC returns to be filed |
| One Person Company | Sole owners looking to limit their liability | Tax holiday for first 3 years under Startup India, higher benefits on depreciation and no tax on dividend distribution | Business tax returns and ROC returns to be filed |
| Private Limited Company | Businesses that have a high turnover | Tax holiday for first 3 years under Startup India and higher benefits on depreciation | Business tax returns to be filed, ROC returns to be filed and mandatory audit to be done |
| Public Limited Company | Businesses with a high turnover | Tax holiday for first 3 years under Startup India | Business tax returns to be filed, ROC returns to be filed and mandatory audit to be done |
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