FAQ’s

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Private Limited Company - All questions answered

Startups that have multiple founders and are planning to raise funds in the near future should register a Private limited Company.

The minimum requirements are:

  • Minimum 2 people required to register a company
  • Both the persons should be 18years or above
  • Both should have Pan and Aadhar
  • You should have a residential or commercial address proof to register a company

The documents required are:

  • Pan and Aadhar of directors and shareholders
  • Utility bill and the NOC of the owner of the proposed registered office address. 

The steps to register a company in India are as follows:

  1. Apply for the digital signatures of the directors and shareholders. Pan and Aadhar is mandatory for this. Video and message verification is mandatory.
  2. Apply for the name of the company. You can either get the name approved before the start of process or get the name approved during the process.
  3. Upload SPICE+ application on the MCA website. You need to attach documents like MOA, AOA, KYC of directors and certification of a Chartered Accountant or a Company Secretary or a Lawyer.
  4. You will get the CIN if application is approved by the government.

The annual compliances are:

Statutory Audit – To be done once every year. You need to appoint a chartered accountant for this. The charges of the chartered accountant usually start from Rs 10000/year.

ROC Filings – To be done once every year. AOC 4, MGT 7 and ADT 1are the forms to be filed every year.

Income tax returns – To be filed once every year. You need to pay 25% taxes on the profits earned.

TDS returns – To be filed once every 3 months.

GST returns – To be filed once every month.

The benefits of the Pvt Ltd company are:

  • Its the most credible of all LLP, OPC and Proprietorship.
  • You can issue equity shares only in the Pvt Ltd company
  • Employees trust Private Limited the most.
  • The tax rate for Private ltd is 25.17%

The disadvantages are:

  • It is not suitable if you are experimenting with ideas
  • The tax rate is a bit high
  • The annual compliances are higher than LLP 
  • Its difficult to close a company
  • You cannot take unsecured loan from friends or third parties except financial institutions

The cost to register a Private Limited company is Rs 6499. This includes:

  • 2 DIN and DSC
  • MOA, AOA and CIN
  • Government fess
  • Professional fees
  • PF and ESIC registration
  • Pan and Tan

The charges start from Rs 17000/year for  company whose turnover is not more than Rs 20 lakhs/year. It includes the following:

  • ROC Filings – MGT 7 and AOC 4
  • Income Tax filings
  • Dedicated accountant for 1 year
  • Appointment of Auditor
  • DIR 3 KYC of 2 directors
  • Payroll for 3 employees

Terms and conditions:

  • Statutory audit fees to be paid to the auditor directly.

Limited Liability Partnership - All questions answered

Startups that have multiple founders and are not planning to raise funds in the near future should register a LLP. Its most suited for family businesses.

The minimum requirements are:

  • Minimum 2 people required to register a LLP
  • Both the persons should be 18years or above
  • Both should have Pan and Aadhar
  • You should have a residential or commercial address proof to register a Limited Liability Company

The documents required are:

  • Pan and Aadhar of partners and designated partners
  • Utility bill and the NOC of the owner of the proposed registered office address. 

The steps to register a LLP in India are as follows:

  1. Apply for the digital signatures of the partners and designated partners. Pan and Aadhar is mandatory for this. Video and message verification is mandatory.
  2. Apply for the name of the LLP. You can either get the name approved before the start of process or get the name approved during the process.
  3. Upload LLP form application on the MCA website. You need to attach documents like  KYC of partners, subscriber sheet and consent letter and certification of a Chartered Accountant or a Company Secretary or a Lawyer.
  4. You will get the LLPIN if application is approved by the government.

The annual compliances are:

ROC Filings – To be done once every year. Form 8 and Form 11 are the forms to be filed every year.

Income tax returns – To be filed once every year. You need to pay 33% taxes on the profits earned.

TDS returns – To be filed once every 3 months.

GST returns – To be filed once every month.

The benefits of theLimited Liability Partnership company are:

  • The compliance cost is less compared to Pvt Ltd and OPC
  • You can convert it in Private Limited Company any time
  • The LLP can take unsecured loans from any person

The disadvantages are:

  • You cannot raise funds in LLP
  • Its less credible than Private Limited Company
  • Employee do not prefer to work in LLP

The cost to register is Rs 5999. It includes:

  • Name approval
  • Government fees and professional fees
  • LLP agreement
  • Registration certificate, Pan and Tan

Proprietorship - All questions answered

Individual founder just experimenting with a Idea or may be a side hustle should register a proprietorship.

Its the simplest structure to register. The minimum requirements are:

  • The proprietor should have Pan and Aadhar
  • You should have a residential or commercial address proof to register a proprietorship firm.

In order to register a sole proprietorship the documents required are:

  • Self attested copy of your PAN (Permanent Account Number) Card
  • Self attested copy of your Aadhaar Card/ Voter ID/ Driving License (DL)/ Passport as address proof
  • Electricity bill and Rental agreement of premises where you want to setup your business (if it is rented premises)
  • Tax paid bill (if it is own premises)
  • Bank statement required for GST registration or MSME registration
  • Passport size photographs

The steps to register a Sole Proprietorship in India are as follows:

  1. Apply for the shops and establishment act in your particular state department.
  2. If all approved you get a Shops and Establishment act license in the proposed name and you can open a bank account and GST in that name.

Sole proprietorship registration – 

Application for sole Proprietorship registration in Bangalore – http://164.100.133.176/ekarmika/static/Home.aspx

Application for Sole Proprietorship in Pune – https://mahakamgar.maharashtra.gov.in/lc-registration-of-shops-and-establishments.htm

The annual compliances are:

Income tax returns – To be filed once every year. You need to pay 33% taxes on the profits earned.

TDS returns – To be filed once every 3 months.

GST returns – To be filed once every month.

The benefits of the Sole Proprietorship in India:

  • It is the most simplest way to start a business legally in India
  • It is the most affordable structure
  • Annual compliance fees is the least
  • It is the most tax efficient structure

The disadvantages are:

  • You cannot raise funds in Proprietor
  • It cannot be converted in LLP or Pvt td
  • Employees do not prefer to work in Proprietor

The cost to register a Sole Proprietor in Pune is Rs 999 an in Bangalore is Rs 4999. It includes:

  • Government fees and professional fees
  • Registration certificate

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