Incorporation of a Company – A Step-by-Step Guide

Most entrepreneurs have the same question when starting out: “How do I actually register my company?” The rules sound complicated, the forms look endless, and the fees aren’t always clear. 

That’s why we created this step-by-step guide to company incorporation in India (2025). From choosing between different structure to filing on the MCA portal, we’ll show you exactly what to do, how much it costs, and the mistakes to avoid, and followed by the latest MCA rules, updated fee structures, mandatory documents, and compliance checklist.

What is Company Incorporation?

Company incorporation is the process of forming a new business entity that is separate from an individual. This document officially declares the entity’s independent identity from the owner. In India, incorporation is done under the Companies Act 2013, and is monitored by the Ministry of Corporate Affairs (MCA).

After the incorporation, the company will be issued a Certificate of Incorporation. At that point, it is acknowledged as a separate legal entity from the owner.

Why incorporate your company?

Separate Legal Entity 

When a company is incorporated under the law, it has its own separate legal entity. It is entrusted with a corporate personality distinct from the individuals who are its members. Once it is recognized as a separate legal entity, the company purchases and enters into contracts in its corporate name, etc.

Limited liability

A company is a legal entity that has its own separate Identity. Therefore, the responsibilities of shareholders or investors for a company are up to the amount they have invested in the company. No one is obliged to pay beyond what they have put in.

Perpetual succession 

The term “Perpetual succession” means the company exists in the eyes of the law with or without anyone. Even if all the members of the company go bankrupt or die, the company does not dissolve on its own unless required by the law. Thus, the company has perpetual succession; it will continue to exist without interruption even if the owner or director changes the company. 

Capacity to sue

A company is a corporate body that can sue and be sued. Similarly, the company can proceed against anyone in its name; in case of an unincorporated association, action may have to be brought in the name of its members.

Tax advantages

Incorporated businesses enjoy various tax benefits in India; they are eligible for lower corporate tax rates and deductions under the Income Tax Act.

For example, eligible startups can benefit from a 3-year tax holiday under the startup scheme. This benefit allows eligible startups to save significantly on taxes during their initial years. 

Types of Companies in India (Under Companies Act, 2013)

When incorporating your business in India, you must choose the right type of organisation. The corporate structure you choose normally provides the framework for your business’s success in India. Under the Companies Act, 2013, and related regulations, 

each company type – from private limited to public limited companies to LLPs and section 8 non-profit – carries its own eligibility criteria, compliances, and obligations. Understanding these differences upfront will help you align your long-term goal with the optimal legal framework. Explore the most common types below to determine which one best fits your vision and operational needs.

Private Limited Company (Pvt Ltd)

A private limited company is a separate legal entity, providing limited liability to its members, and is prohibited from publicly inviting investment in shares or share subscriptions.

By law, its articles must restrict share transfer and prohibit public stock offerings. It must have at least two shareholders and two directors. In a Private Limited Company, the shareholders’ financial liability is restricted solely to their unpaid shareholdings, safeguarding personal assets from company liabilities.

These companies are separate legal entities with perpetual succession. In practice, Private Limited companies require formal compliance (Such as mandatory board meetings, annual meeting, annual filing, and audits if turnover exceeds thresholds) but allow for easier funding and growth than sole proprietorships. The company name must end with “Private Limited”. This structure is ideal for startups.

Membership & Management: Minimum 2, Maximum 200 shareholders. The director and shareholders can be the same person, but must have one director who is a resident of India.

Liability: The members' liability is limited to the amount unpaid on their share capital

Compliances: Requires formal incorporation with the RoC, issue of share capital, regular board meetings, AGMs, and annual filings (e.g., financial statements and returns).

Use Case: Ideal for growing startups and small businesses seeking funding, as it enables equity issuance and provides clear corporate governance.

Public Limited Company 

It’s an entity that can offer shares to the general public. It has stricter governance and disclosure requirements than a private company.

Legally, a public company must have a minimum of seven shareholders and at least three directors; there is no upper limit on membership. Its name ends with “Limited” (without “Private”).

A Public company’s shares are freely transferable, and it can raise capital by issuing stock on exchanges. Directors and officers have limited liability, similar to private companies.

Because public firms can solicit public funds, they face higher compliance: mandatory AGMs, tighter audit and board rules, and adherence to SEBI regulations if listed.

Public companies are ideal for large ventures that require substantial capital or wish to enlist a broad base of shareholders.

Membership & Management: Minimum 7 shareholders (no Upper limit)

Liability: Members’ Liability is limited to their unpaid share amount.

Compliance: Heavy compliance under the Companies Act, 2013 (AGMs, board meetings, statutory audits, detailed financial disclosures).

Use Case: Ideal for Large corporations, ventures seeking public equity or loans, and government entities converting to corporations.

One Person Company

A one-person company is a hybrid between a sole proprietorship and a company, introduced by the Companies Act 2013. It allows a single entrepreneur to enjoy the benefits of a corporate structure.

An OPC requires only one member (individual, not a body corporate) who nominates another person to take over in case of death or incapacity. It must have at least one director (who can also be a member) and can appoint up to 15 directors.

There is no mandated minimum share capital. Importantly, OPCs were restricted by paid-up capital (INR 50 Lakh) and turnover (INR 2 crore) limits, but rules were relaxed in 2021 to remove those caps.

OPCs are thus ideal for solo entrepreneurs who want limited liability and corporate credibility with minimal formalities.

Membership & Management:  A company can have only one shareholder and at least one director. These roles may be filled by the same person

Liability: Limited to share capital; personal assets are protected.

Compliance: Lower than private companies – no AGM requirement, relaxed financial reporting, and simplified annual filings.

Use Case: Small entrepreneurs starting alone (consultants, freelancers) who want limited liability.

Also read : How to Register a One-Person Company (OPC) in India – A Complete Guide

Limited liability partnership (LLP)

A Limited Liability Partnership (LLP) blends partnership flexibility with corporate limited liability. Governed by the LLP Act, 2008 (a separate law), an LLP is a distinct legal entity like a company but managed like a partnership. It requires at least two partners (no upper limit).

The liability of each Partner is limited to the amount they agreed to contribute to the partnership capital. They are personally protected from the business liabilities.

LLPs offer tax and compliance advantages: they enjoy pass-through taxation (no double tax on profits) and face fewer statutory formalities than private companies. Key benefits include operational flexibility (partners directly manage the business) and a simplified compliance regime.

An LLP must maintain partnership deeds and file annual returns and statements with the RoC, but it avoids many company-level requirements. This structure suits professional services (law firms, consultancies) and small businesses seeking limited liability without a complex corporate setup.

Partnership Structure:  Minimum 2 designated partners (at least one resident in India).

Liability: Limited to contribution – partners are not personally liable for others' actions.

Compliance:  Must file an LLP agreement and annual returns (Form 11) and statement of account (Form 8), but no AGM or board meetings required. An audit is required only if turnover or contribution exceeds the prescribed limits.

Use Case: Small businesses (consultants, freelancers) who want limited liability. Professional firms and startups prefer a partnership model with limited liability.

Also read : LLP Registration in India: Complete Guide for Process, Registration & Compliance

Sole Proprietorship

A Sole proprietorship is an uncomplicated business structure that results from the singular ownership and operations of a business, wherein there is no legal distinction between the individual and the business entity. It requires no formal registration under the Companies Act, 2013, but businesses often require a local shop licence, GST registration (if applicable), or MSME/Udyam registrations.

All profits belong directly to the owner, who also has full discretion over the business. Setup is quick and inexpensive, with minimal documentation. However, liability is unlimited: the proprietor is fully responsible for business debts, and personal assets can be used to satisfy business liabilities.

There is no continuity beyond the owner’s life, and raising capital can be challenging. An unincorporated business structure, such as a sole proprietorship, is ideal for businesses with minimal to no at-risk financing due to the unlimited liability potential. Many solo entrepreneurs later transition to OPCs or companies to limit risk.

Ownership: A Single person who makes the decision and keeps all profits

Liability: Unlimited – the owner’s Personal assets are at risk for any business debt.

Compliance: Virtually none under the Companies Act, 2013; Just basic tax Filing and applicable local licenses.

Use Case: Very small businesses (home-based, consulting, local retail) where the entrepreneur wants simplicity and bears all risk.

Section 8 Company (Non–profit Organization)

A Section 8 company (often called a non-profit or NGO) is a special corporate form for charitable or philanthropic purposes. Section 8 of the Companies Act, 2013 allows incorporation of entities “not for profit”, the promoter art, charity, education, social welfare, etc. Key features include:

Non-profit Motive: By law, a section 8 company must have only charitable objectives, and any profits/income must be fully reinvested in those objectives. It cannot distribute dividends to members.

Limited liability: Despite no shareholders, members' liability is still limited to their pledged contribution. Generally, the personal property is protected.

No share capital: it does not issue shares. Instead, it has members (often founders and donors) who may also serve as directors.

Name and Registration: The name usually includes “Section 8”, “Foundation”, or similar terms to reflect its non-profit nature. To incorporate, promoters must apply to the RoC with a Memorandum of Association stating the charitable objectives. The RoC (central government) grants a License if satisfied, 

Tax Benefits: Section 8 companies qualify for tax exemption (both for the company and donors) under the Income Tax Act.

Compliances: Though not-for-profit, they are still companies under the Act, so they must hold board meetings, keep proper books, and file annual financial statements with the RoC.

Use Case: This form suits charities, clubs, research institutions, or any entity seeking the credibility of a corporate structure while pledging to use resources only for social goods.

Producer Company 

A Producer's Company is a corporate entity designed for the agriculture and primary produce sector. It enables farmers or producers to pool resources for production, marketing, procurement, or services. It is recognized under the provision of the  Companies Act, 2013 (section 378A)     

Its features include:

Incorporation: Must be formed by producers (e.g., farmers, fishermen, laborers) or institutions thereof. At least 10 individual producers (or 2 producers’ institutions, or a mix totaling 10) are required to be registered. After formation, there is no upper limit on membership number of producers that can join. 

Limited Liability: Classified legally as a company, members ‘liability is limited to their unpaid share capital. The company’s name must end with “Producer Company Limited”

Objectives: It must pursue activities benefiting producers, such as processing crops, Marketing producers' supplies of farm inputs, and providing technical or financial services. It operates like a private company but focuses on mutual assistance and the welfare of members.

Governance: It needs at least five directors (maximum 15 under normal conditions), including a full-time CEO (who cannot be a member). It is prohibited from ever converting into a public limited company.

Compliance: A producer’s company holds annual meetings and follows standard company laws (financial audits, filings) similar to a “Private Limited Company” 

Use Case: Producer companies are ideal for farmer cooperatives or producers’ collectives wanting the efficiency of a corporate structure (easy access to markets and services) while retaining farmer-friendly governance.

Small company

A Small Company is not a separate business form by choice, but a classification under the Companies Act, 2013, to ease compliance for very small corporations. Only private companies (excluding holdings/subsidiaries) with a paid-up share capital ≤₹2 crore and a turnover ≤₹20 crore. “Recent amendments” have raised this to paid-up capital ≤₹4 crore and turnover ≤₹40 crore.

Key points about Small Companies:

Criteria: it must be a private company meeting the above thresholds. If it grows beyond those limits, it must reclassify as a regular company.

Compliance Relaxations: Small companies get many exemptions: they can present simplified financial statements, hold board meetings more flexibly, and are exempt from requirements like constituting an audit committee or conducting annual general meetings in person. Disclosure on managerial remuneration and related-party transactions is also relaxed.

General Rules: Otherwise, it follows Company law (minimum 2 members and 2 directors, limited liability, etc.). The small company regime was created to reduce administrative burdens and filing fees for small enterprises.

Use Case: For entrepreneurs, forming a private company that qualifies as small means enjoying easier record-keeping and fewer mandatory compliances until the business scales beyond the specified thresholds.

Government Company

A Government Company is one in which the Central Government or any state Government (or their Combination) holds at least 51% of the paid-up equity share capital. Essentially. It is a majority state-owned corporation.

Key aspects

Ownership: At least 51% of shares held by the government(s), giving the state significant control. Both the central and state governments can jointly hold stakes.

Purpose: These companies undertake activities in the public interest (e.g., infrastructure, utilities, natural resources). They often align with government policy goals or strategic objectives.

Legal Status: A government company is formed and operates under the Companies Act 2013, with all companies’ law provisions generally applicable. Its board usually includes government-nominated directors to ensure alignment with public policy. Financial reporting, audits, and filings follow corporate norms.  

Liability: it has limited liability like any other company; the government’s liability is limited to its investment

Use case: These are commonly known as Public Sector Undertakings (PSUs) or government-owned enterprises. Examples include national oil companies, railway corporations, and public banks (though some are listed).

Foreign Company 

A Foreign Company (as per the Companies Act, 2013) is a corporation formed outside India that establishes a place of business in India (either on its own or through an agent) or carries on business in any manner in India. Unlike an Indian-Incorporated company, a foreign company is not registered under the Act, but the Act imposes certain compliances once it enters India:

Definition: Any business entity incorporated abroad with an Indian office or branch is a foreign company. For example, a U.S. company opening a liaison office or branch in India becomes a foreign company.

Compliances: Within 30 days of commencing a place of business in India, it must file details with the Registrar of Companies (RoC). Every year, it must file audited financial statements (balance sheet and P&L) with the RoC, along with details of Indian branches.

Liability: The foreign corporation’s liabilities are determined by its home country law, but the branch in India generally limits liability to Indian assets.

Scope: If Indian residents own ≥50% of its capital, it may have to comply with the additional provisions as if it were an Indian company.

Use Case: Foreign companies are typically used by multinational corporations or international firms to conduct business (sales, services, marketing) in India without full local incorporation.

Roster for Incorporation ( Not have clarity in this – is it complete or yet to update anything in this?)

• DSC (Digital signature certificate):

• DIN (Director Identification Number):

• Choose a company structure:

• Select company name:

• Draft MOA (Memorandum of association) and AOA (Article of association): 

• Members and directors:

• Registered office address:

Step-by-step procedure for incorporation of a company under the Companies Act, 2013

Incorporating a company in India is a crucial first step towards building a legally recognised business entity. The Ministry of Corporate Affairs (MCA)has streamlined the entire process through a single-window digital platform called SPICe+, making company registration faster, paperless, and more efficient. 

Step 1 – Acquiring the DSC (Digital Signature Certificate)

Apply for DSC for all proposed directors through the Certified Authorities. This is an essential requirement to sign electronic documents.

Step 2 - Reservation of Name for the Company (SPICe+ Part A)

You need to reserve a name for your company. A maximum of two names can be proposed to the SPICe+

Fees: INR 1000 per application

Step 3 – Fill SPICe+ Part (B)

Part B of SPICe+ “essentially” covers

• Company Incorporation 

• Allotment of DIN

• Mandatory issue of PAN, TAN

• Obligatory issue of EPFO & ESIC Registration

• For the issue of Profession Tax registration (Applicable in Maharashtra, Karnataka, and West Bengal), it is mandatory to do so

• Essentially, opening a Bank Account for the company 

• Registration of GST (If applied for)

Step 4 – Drafting of MoA and AoA  

• e-MoA (INC –33): Memorandum of Association – Defines the company’s objectives, Scope, and powers

• e-AoA (INC-34): Article of Association: Defines internal rules, operational structure, and duties of members/directors

Both forms are integrated into the SPICe+ web form; you can choose:

• Predefined templates that are ideal for standard clauses, or

• Upload customized PDFs for specific clauses or Conditions

Step 5 – File AGILE-PRO-S Form

 Linked with SPICe+ used for:

• GST registration

• ESIC and EPFO registration

• Bank account opening

• Profession Tax enrolment (in Maharashtra)

(Mandatory to fill and file with incorporation)

Step 6 – Submit Forms on MCA Portal 

Once you have completed all the incorporation documents, it’s time to upload them to the official MCA. This is a decisive point in the company incorporation process.

Upload all the documents:

• SPICe+ (INC-32)

• e-MoA (INC-33)

• e-AoA (INC- 34)

• AGILE-PRO-S (INC-35)

Each of these forms is linked and must be submitted together for a flawless process.

Step 7 - Breakdown of Fees for Company Incorporation 

Fees for Part B of SPIC+ depend on the share capital, number of members, and applicable stamp duties, with variation in stamp duties for different states.

 

• Government fees for incorporation (SPICe+ Forms)

Companies that have share capital:

 

Companies that have no share capital 

 

• Stamp duty

Stamp duty is levied on

• SPICe+ form

• e-MoA (INC 33)

• e-AoA (INC 34)

Here’s a sample for Delhi

 

(Note: For amounts exceeding ₹15 lakh, the fees are calculated based on the capital amount. Use the MCA Fee Calculator for exact charges.)

• PAN & TAN Application freight 

• PAN: Included (no extra fees)

• TAN: Included (no extra fees)

           (Both are included in SPICe+ Form)

• Professional Charges (Optional but Recommended)

You can hire a chartered accountant (CA), a Company Secretary (CS), or a Cost Accountant to assist with the incorporation procedure.

Fees vary based on complexity, state, and the professional’s experience.

Certificate of Incorporation (COI)

The COI is an electronically signed document issued by the RoC. It includes important company registration details such as:

• Company Name 

• Corporate Identification Number (CIN)

• Date of Incorporation 

• Type of Company

• Registered Office Address

COI is Sent Via Email with PAN, TAN, and CIN

MCA Updates for the Year 2025

• Mandatory Dematerialization of Shares  

As per the MCA Notification, Private companies (excluding small and producer companies) must convert physical shares into dematerialized form by June 30, 2025. This move is intended to increase transparency and prevent fraud.

• Director KYC (DIR-3 KYC)

Directors holding DIN must file DIR-3 KYC every year by September 30. Failure to file will deactivate the DIN.

• Enhanced Compliance for Foreign Subsidiaries 

A foreign-owned company must provide additional disclosures under FEMA and the Companies Act, 2013.

 

• Real-Time PAN and TAN Allotment

Now PAN and TAN are issued instantly upon company incorporation, speeding up post-registration compliances.

Post-Incorporation Compliance 

After you receive the COI, you must ensure the following:

• Open a Bank account in the company’s name. 

• File INC 20-A (Declaration of commencement of Business) within 180 days from the date of incorporation.

• Register under GST if applicable. 

• Maintain Statutory register and records.

• Appoint a Statutory auditor within 30 days. 

• Conduct the first Board Meeting within 30 days.

Non-compliance may result in penalties, disqualification of directors, or even the removal of the company’s name from the MCA register. Key compliance duties include timely filing of annual returns, maintaining an updated statutory register, and adhering to due dates for tax and RoC filing.

Comprehensive Timeline for Company incorporation through SPICe+

• Obtain DSC: This usually takes 1 to 2 working days.

• Name Reservation (SPICe+ Part A): The approval process generally takes 2 to 3 working days.

• Preparation of Incorporation Documents: This step takes around 2 to 3 working days.

• Filing SPICe+ Part B and Linked Forms: This is completed within 1 to 2 working days.

• Uploading Forms and Payment of Fees: Forms are uploaded and fees are paid on the same day.

• Certificate of Incorporation: The certificate is usually issued within 2 to 3 working days.

Total estimated time: 8-12 working days, provided all documents are ready and there are no objections. If discrepancies arise, the process may take longer. 

Can a Person Register a Company without CA and CS?

Yes – While it’s legally possible to register a company in India without the help of a CA or CS, the process can be tricky—one missed form or compliance step may lead to rejection or delays. 

That’s where One-Startup becomes your trusted partner.

We simplify company incorporation by from choosing the right structure to handling registrations, filings, and compliance with accuracy, ensuring faster approvals and zero errors. With us, you can focus on building your business while we take care of the paperwork.

Contact One-Startup today and register your company the easy way.

Conclusion

Incorporating a company in India in 2025 is simpler than ever with the MCA’s digital reforms through SPICe+, making registration faster and paperless. But beyond incorporation, staying compliant—like fulfilling annual KYC, dematerialization of shares, and other filings—is equally important to avoid penalties and protect your business.

Start your journey the right way – get yourself and your company legally registered and build on a strong foundation.

Your Business, Our Commitment

At One-Startup, we believe every entrepreneur deserves a smooth journey—from starting up to staying compliant. That’s why our experts take care of the details—registrations, filings, taxes, and audits—so you never have to worry about mistakes or delays. With professionalism, precision, and genuine dedication, we keep your business protected and future-ready.

Work with One-Startup  today—where your goals become our mission.

Bibliography 

• Ministry of Corporate Affairs (MCA), Government of India

https://www.mca.gov.in

Source for SPICe+ forms, compliance updates, fee calculators, and latest circulars related to company law.

• Companies Act, 2013

Bare Act with Rules (amended up to 2025)

The primary legislation governing incorporation, management, and compliance for companies in India is the Companies Act, 2013.

• Income Tax Department, Government of India 

https://www.incometax.gov.in 

Information on PAN, TAN allotment, and deduction available for startups and incorporated entities

• Startup India – DPIIT, Ministry of Commerce & Industry 

https://www.startupindia.gov.in

Sources for tax holiday schemes, benefits under Startup India, and DPIIT recognition criteria.

• Securities and Exchange Board of India (SEBI)

https://www.sebi.gov.in
This is for updates related to the dematerialisation of shares and IPO guidelines applicable to public companies.

• Chartered Accountants and Company Secretaries Professional Bodies

ICAI - https://www.icai.org 

ICSI - https://www.icsi.edu

This is for professional guidance, compliance alerts, and procedural clarifications.