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Guide to starting a Business in India

Staff Reporter | 4:08 PM |

Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.


Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in India. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected from World Bank: Doing Business 
No.ProcedureTime to CompleteAssociated Costs
1Obtain director identification number (DIN) on-line1 dayINR 100
2Obtain digital signature certificate on-line1 dayINR 400 to INR 2650
3Reserve the company name with the Registrar of Companies (ROC) on-line2 daysINR 1000
4Pay stamp duties online, file all incorporation forms and documents online and obtain the certificate of incorporation3-7 daysINR 22,300
5Make a seal1 dayINR 350
6Visit an authorized franchise or agent appointed by National Securities Depository Services Limited (NSDL) or Unit Trust of India (UTI) Investors Services Ltd to obtain a Permanent Account Number (PAN)7 daysINR 94 for Fee and INR 5 for Application Form, (if not downloaded)
* 7Obtain a tax account number for income taxes deducted at source from the Assessing Office in the Mumbai Income Tax Department7 days, simultaneously with Procedure 6INR 60
* 8Register with Office of Inspector, Mumbai Shops and Establishment Act2 days, simultaneous with procedure 7INR 2,400 (registration fee) + 3 times registration fee for Trade Refuse Charges (INR 7,200)
* 9Register for VAT online10 days, simultaneous with procedure 8INR 500 (Registration Fee) + INR 25 (Stamp Duty) for compulsory VAT registration
* 10Register for profession tax2 days, simultaneous with procedure 9no charge
* 11Register with Employees' Provident Fund Organization12 days, simultaneous with procedure 8no charge
* 12Register for medical insurance (ESIC)9 day, simultaneous with procedure 10no charge
* Takes place simultaneously with another procedure.