🎯 Let's learn the procedure of incorporating your startup, your startup isn't registered, if it doesn’t exist on paper.
🔍 Step-by-Step let's see how to incorporate in India for now :
✅ PRIVATE LIMITED : This is the usually everyone's first choice investors prefer it, scalable.
✅ LIMITED LIABILITY PATNERSHP : This is usually for service providers, consultant, Accountant, freelancers. As this offers more flexibility and it also has its own pros and cons, Less funding / No funding opportunity. ( Seek professionals for help )
✅ ONE PERSON COMPANY : Best for solo founder's, even best for freelancers. It can't be scaled if you wanna scale, it has to be converted into PVT.LTD.
✅ PUBLIC LIMITED COMPANY : As of now let's keep this aside, we are focusing on Start-up and start-up can't usually start a public company. If you are eligible then yea you can still apply for it.
✅ Pro tip: For most tech startups planning to raise capital, go with Private Limited Company
For information about these you can refer to : https://razorpay.com/rize/blogs/private-limited-company-vs-llp-vs-opc
✅ PAN & Aadhaar (of founders)
✅ Digital Signature Certificate (DSC) https://emudhradigital.com/apply-for-digital-certificate
✅ Director Identification Number (DIN) https://www.mca.gov.in/mca/html/mcav2_en/home/mcaservice/dinservices/afd/applyfordin.html
✅ Registered Office Address Proof
If y'all need one stop solution you can use (personally used) : https://razorpay.com/rize/company-registration
✅ Choose a unique name ✅ Check availability on MCA portal ✅ Avoid trademarked / Licenced names
Check it here : https://www.mca.gov.in/content/mca/global/en/mca/fo-llp-services/company-llp-name-search.html
File SPICe+ Form online Includes: ✅ Company Name Approval ✅ Director Appointment ✅ PAN & TAN ✅ EPFO, ESIC & GST registrations ( If required )
Can be done on : MCA GOVT PORTAL / RAZORPAY RIZE / VAKIL SEARCH / INDIA FILLING ETC......
MCA : https://www.mca.gov.in/content/mca/global/en/home.html RIZE : https://razorpay.com/rize/company-registration
Once you corporate and get your Certificate of Incorporation ( CoI ), you can open a current account under your company name.
Things to keep in mind while opening a startup account, look for possible benefits such as :
✅ Zero maintenance charges for not maintaining average balance / Zero AMB for atleast 1 year. ✅ Free Cash transaction, Free or low charges for NEFT / RTGS ✅ Forex transaction enabled ✅ E-Banking ✅ Check if they issue OD / CC ( OVERDRAFT / Cash credit ) ✅ Good relationship is maintained ( Relationship banking is provided or no ) ✅ Tax payments enabled ✅ Sweep facility
Recommendation : ☄️IDFC start-up account: https://www.idfcfirstbank.com/startup-banking/startup-current-account
☄️Indusind Start-up account: https://www.indusind.com/content/indusind-corporate/en/business/accounts/current-account/indus-startup-current-account.html
☄️ You can even check out other banks too.
✅ Apply for DPIIT / START-UP India recognition. Perks :- Tax benefited, DPIIT perks, Easy access to government grants.
Visit : https://www.startupindia.gov.in for more details
✅ Apply for GST if applicable.
✅ Create a founder's agreement which will mention everything ( roles, equity etc.. )
Agreements can be validated by lawyers.
⚠️ Mistakes to Avoid:
🫸 Don't register as OPC if you plan to raise funds and OPC is not preferred for startups.
🫸 Try to create a founder's agreement, don't skip or don't forget to mention all details. Update it accordingly.
🫸 Don't skip / forget applying GST if it is applicable / if you are gonna sell something or charge for something online.
💸 Cost of Incorporation ( depends )
If you do it yourself throught MCA : ₹2,000–3,000 DSC : 1500-2000 ( Depends on how many people )
☄️ If you do it via Razorpay or any other agency : ₹10,000 to anywhere between ₹20,000. Use only trusted agency / personally known people.
🧠 Tip: Incorporate only when you are ready to go live and you are ready to charge money. For raising funds it isn't a big probelm but after getting term sheet it is so it's advisable to incorporate it if you are gonna raise funds.
We will talk about incorporating it in different countries like US, U.A.E, Singapore and Hongkong and what are the benefits by incorporating there we will talk about it in next post.