Company and entity registration: choosing and setting up the right structure

The main structures and who they suit

How registration typically runs

For a company, the steps are: Digital Signature Certificates for the directors and subscribers, name reservation, drafting the Memorandum and Articles of Association, and filing SPICe+ with linked forms. On approval, the Registrar issues a certificate of incorporation with the CIN, PAN and TAN, and the bank account and GST, EPFO and ESIC registrations can be applied for through the same process. An LLP is incorporated through the FiLLiP form, followed by filing the LLP agreement within 30 days.

Non-profits differ. A Section 8 company needs a licence from the Central Government as part of incorporation. Societies register with the state Registrar of Societies under the Societies Registration Act, 1860 or the state's own law, and trusts are created by a registered trust deed. Each then applies separately for income tax registration and approval for donor deductions.

Regulated entities need more. An NBFC must obtain a certificate of registration from the RBI after meeting its net owned fund and fit and proper requirements, and a Nidhi company must meet membership and capital conditions and file a declaration with the MCA.

Timelines and costs in general terms

A private limited company or LLP is usually registered within one to three weeks, depending on name approval and document quality. Section 8 companies, societies and trusts take a few weeks more. NBFC registration with the RBI can take several months.

Government costs include MCA filing fees, which depend on authorised capital, and stamp duty on the MOA and AOA, which differs by state. Professional fees depend on the entity type and how much drafting is involved. We give you a written break-up of government and professional costs before filing.

Changing the structure later

Structures can be changed. A proprietorship can move into an OPC, an OPC can convert into a private limited company, an LLP can convert into a company under Section 366 of the Companies Act, and a private company can become public. Each conversion has its own conditions, approvals and tax consequences, so it is worth planning the likely path when you first register.

Registration is also only the start. Every company and LLP has annual ROC filings, tax returns and, depending on the business, GST and TDS returns. We set up the compliance calendar at the time of incorporation, so the first year's deadlines, including the auditor appointment and the commencement of business declaration for companies, are not missed.

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Frequently asked questions