How to Register a Startup Company in India?

India ranks third globally in the number of startups, following the USA and China.

Before diving into the steps for how to register a startup company in India, we will first break down the definition of a startup as per the Indian government. The definition has been revised over the years and has been valid since 2019.

To put it in shorter form – It is a company that has not exceeded 10 years of existence and has an annual turnover that has not exceeded Rs. 100 crore for a financial year, provided it is a Private Limited Company, partnership firm or a limited liability partnership in India. 

Additionally, the entity must be engaged in the product/process/service’s innovation, development or improvement. The company must not be a split or a reconstruction of an existing business.

These criteria determine and identify a company as a startup. Knowledge of the startup company registration process in India is important for entrepreneurs wanting to establish a startup firm.

Register A Startup Company In India: Know Why

1. Legal Recognition & Protectionv 

80% of consumers consider registered businesses more trustworthy.

Registered startup gains the trust and credibility of all its stakeholders including customers, investors, and other parties.

2. Eligibility for Government Benefits

Startups have received ₹1,100 crore under the Fund of Funds for Startups.

Only registered businesses can avail themselves of the benefits of the Startup India Initiative and get access to government grants in the form of funds and incentives. Understanding how to register a startup ensures businesses can leverage these benefits effectively.

3. Access to Funding & Investment

Indian startups raised a total of approximately ₹1.20 lakh crore across 1,337 deals in 2024.

• Investors prefer funding registered businesses over unregistered ones.
• Facilitates obtaining loans, venture capital, and angel investments.

4. Tax Exemptions & Rebates

The 3-year tax holiday has resulted in an average tax saving of ₹1.5 crores per startup.

A 3-year tax holiday under the Income Tax Act can be gained for eligible startups. Additionally, startups can exempt themselves from capital gains tax and other financial concessions. Completing the startup company registration process in india as per the government regulations is mandatory to avail these benefits.

5. Intellectual Property Rights Protection

India has seen a 15% increase in patent filings from startups in the last 2 years.

IPRs such as Trademarks, Patents, Copyrights, Industrial Design Rights, and others must be obtained as per applicability to protect the business’s offerings from the competitors. After completing the startup company registration process in India, firms can avail themselves of a 50% rebate on patent filing fees under the Startup India Initiative.

6. Business Expansion & Partnerships

Over 70% of startups in India have formed partnerships with other businesses or organizations.

Registration is required for entering into contracts, acquiring assets, and establishing partnerships. Business scaling and expansion are possible only after legally registering the business. But all of this begins with knowing how to register a startup.

7. Better Reputation & Trust

90% of consumers consider registered businesses more credible.

For long-standing businesses in the industry, it is crucial to earn a good reputation and credibility from the stakeholders. As a result, it provides opportunities for long-term business growth by building long-term relationships. But this can be achieved only after completing the startup company registration process in India.

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Types of Startup Structures

1. Sole Proprietorship 

According to MSME, approximately 75% of startups in India commence operations as sole proprietorships.

In the ladder of structures and complexities, this is a simple type and so is the startup company registration process where the business is set up, owned, and operated by a single person who is personally liable for all the debts and liabilities of the business. Moreover, distinctions between legal and personal assets are not made.

Pros

• Minimal paperwork
• Complete discretion of business decisions
• Fewer regulations governing the business
• Lower operational costs 
• Simple tax reporting structure 

Cons

• Sourcing of capital could be a challenge 
• Unlimited personal liability
• Growth potential is limited to the abilities of the single owner

2. Partnership

According to MSME, about 15% of startups in India start as partnerships.

In this structure, there are a minimum of two or more individuals acting as partners sharing profits, losses, and responsibilities. The liability of each partner towards the business is dependent on the type of partnership created. As part of the startup company registration process in India, choosing the right structure is crucial to the growth of the business.

• General Partnership (GP): The management and liability of the business are shared by all the partners.
• Limited Partnership (LP): At least one partner has unlimited liability while one or more partners have limited liability
• Limited Liability Partnership (LLP): All partners have limited liability where personal assets are not liquidated for the business.

Pros

• Simpler process along with cost effectiveness in establishment
• Work is delegated among partners, reducing the workload 
• Tax benefits can be gained

Cons

• Partners must take personal liability for business debts 
• Potential for disputes among partners is high
• Capital sourcing would be a challenge

3. Private Limited Companies (Pvt Ltd)

According to MSME, about 5% of startups in India start as private companies.

It is a hybrid structure with single or multiple owners where the owners are protected of their assets while allowing tax flexibility to consider income as personal income or at the corporate level. 

Pros

• Members have limited liability 
• Taxation flexibility is provided
• Less complex formalities and regulations than corporations.

Cons

• Lengthier paperwork 
• Higher fee levels for the process of incorporation
• Additional taxes can be levied in certain states 
• Raising capital could be a challenge when compared with corporations 

4. Corporation

According to MSME, about 10% of startups in India start with a corporate structure.

An entity that has its assets independent of its owners, can enter into contracts, sue or be sued, and raise capital by issuing stocks. It is treated as a legal entity where the owners are protected from liabilities.

Types of Corporations

• C Corporation (C Corp): There are no ownership restrictions but the corporation is subject to double taxation.  
• S Corporation (S Corp): It operates on a pass-through taxation structure that is limited to 100 shareholders.

Pros

• There is a perpetual existence of the firm irrespective of changes in ownership.
• Owners are protected from liabilities.
• Capital can be raised easily.

Cons

• Owners are obliged to pay corporate tax and personal tax on dividends. 
• Lengthier government regulations and more compliance requirements.
• Establishment is complex with higher administrative costs.

How to Register a Startup Company in India?

Step 1: Obtain a Digital Signature Certificate (DSC)

It is used to verify the identity of an individual in an electronic form to ensure data security, integrity, and authenticity in digital transactions. The directors and authorized signatories are required to submit online forms and DSC is used for that purpose. 

These are only available through government-approved agencies like NSDL, Sify, Capricorn. Usually, they come with a validity of 1 or 2 years that must be renewed after expiration. As part of the startup company registration process in India, obtaining a DSC is the first step.

Step 2: Apply for Director Identification Number (DIN)

It has to be acquired by an individual if they plan to become a director in an Indian company. It is a one-time application process that is automatically assigned through the SPICe+ form when applying for incorporation. In case there is a need to update changes, it can be done so through the form DIR-6 KYC. By getting familiarized with how to register a startup company in India, a smooth compliance to the norms can be ensured. 

Step 3: Reserve Your Company Name

Two names can be submitted for approval. Depending on availability, the MCA approves either one or suggests alternatives. After approval, the name remains valid for 20 days for a new company and 60 days for an existing company. As part of the startup company registration process in India, selecting a unique name is important to avoid conflicts with existing businesses.

Step 4: Fill SPICe+ Form for Incorporation

The most important step in the entire registration process is that it includes a number of registrations under a single application form. As part of the startup company registration process in India these include:

• Company incorporation
• DIN allotment
• PAN & TAN registration
• GST registration (if opted)
• EPFO & ESIC registration
• Bank account opening (via AGILE-PRO form)

Documents required for SPICe+ submission:

• Memorandum of Association (MOA) 
• Articles of Association (AOA)
• Address proof of the company 
• Director’s identity proof 
• Digital Signature Certificate (DSC) of the directors

Step 5: Approval by MCA and Certificate of Incorporation (COI)

The registrar of companies evaluates the submitted SPICe+ form and the other documents. If everything meets the mandates as part of the startup company registration process in India:

• Certificate of Incorporation (COI) is issued.
• Corporate Identification Number (CIN) is issued.
• Registration for PAN and TAN is done automatically. 

Here is a table specifying the expenses associated with each step of the process:

Type of Expense	Estimated Cost (INR)
Digital Signature Certificate (DSC)	₹1,000 – ₹2,500
Director Identification Number (DIN)	Free (via SPICe+)
Name Reservation (RUN)	₹1,000
Company Registration Fee	₹2,000 – ₹7,000 (varies)
PAN & TAN	Free (via SPICe+)
GST Registration	Free
Professional Fees (if using CA/CS)	₹5,000 – ₹15,000

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Post-Startup Company Registration Process in India

Now that the company is incorporated as part of the startup company registration process in India, several financial and legal obligations must be fulfilled. These are important to adhere to as they showcase the transparency with which the business operates and help in building credibility with stakeholders.

1. Obtain PAN & TAN

After the startup company registration, Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) must be applied and obtained from the Income Tax department.

2. Open a Business Bank Account

A current account must be opened with the company’s incorporation documents such as Certificate of Incorporation, PAN, and Memorandum & Articles of Association (MOA & AOA).

3. Register for GST (Goods and Services Tax)

GST must be registered if the turnover exceeds 40 lakhs. But for states under the special category, it is 10 lakhs in the startup company registration process in india.

4. Apply for Startup India Registration

The Startup India initiative offers tax exemptions and funding support, to avail these benefits, registration must be done. Additionally, application for DPIIT (Department for Promotion of Industry and Internal Trade) must be done as part of the post-startup company registration process in india.

5. Register for MSME (check applicability)

For availing additional benefits, registration under Udyam Registration for Micro, Small, and Medium Enterprises (MSME) is necessary. The grants include lower interest rates on loans and government subsidies.

6. Obtain Professional Tax Registration (check applicability)

Only levied in certain states based on revenue needs, economic activity, and policy decisions. Other states may consider simplicity in the compliance procedure. As part of the post-startup company registration process in India, this ensures compliance with the state regulations. 

7. Employee-Related Registrations

• EPF (Employees’ Provident Fund) is required if a company has 20 or more employees.
• ESIC (Employees’ State Insurance Corporation) is required if a company has 10 or more employees earning below ₹21,000 per month.

8. Apply for Business-Specific Licenses

• Shops and Establishment Act Registration 
• FSSAI License
• Import Export Code (IEC)

9. Compliance with MCA (Ministry of Corporate Affairs)

• An auditor must be appointed within 30 days of incorporation of the business.
• Board meetings and AGMs must be conducted as per the Companies Act, 2013.
• Filing of Form INC-20A for declaring business commencement must be done within 180 days.

10. Obtain Intellectual Property Protection 

IPPs such as Patent, Copyright, Industrial Design Rights, Geographical Indication (GI), Semiconductor Integrated Circuit Layout Design (SICLD) and Plant Variety Protection (PVP) are crucial as they protect the core business offerings from competitors. Understanding how to register a startup company in India with the knowledge of all the steps is crucial to ensure long-term business growth.

11. Accounting & Tax Compliance

Tax Deducted at Source (TDS) must be filed if applicable along with Income Tax Return (ITR) & GST filings on a periodical basis.

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How To Register Startup Company Wrapping up

Careful planning by detailing every requirement in the process of startup company registration in India is crucial. While the majority of the process is legal compliance, selection of a business name, structure, and other associated factors must be chosen after evaluation and a feasibility study.

Meticulously executing the steps is of prime importance, but on the other hand, the financial aspects will determine the success of the business. To achieve this, the business strategy must align with the ability to raise capital to ensure perpetual existence and establish a long-standing business.

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