How to register a company in India

India is one of the fastest growing economies in the world. It presents high-reward business opportunities for companies around the globe, particularly in technology, manufacturing, and health care sectors. With a large, skilled talent pool and robust corporate infrastructure, India has become a key player internationally across industries.

Whether you’re setting up a foreign subsidiary or partnering with an Employer of Record (EOR), consider India’s legal and regulatory requirements. Registering your company is essential to operate in the country and access its markets. A solid understanding of India’s business framework will help you stay compliant from day one.

Learn how to register a company in India step by step, the key requirements, and the most common business structures to choose from.

Why register a company in India?

Registering a company in India is both strategically and legally advantageous. 

India has lower hiring costs compared to the US and is well-known for its supportive business policies. Tax advantages and government-funded initiatives like Startup India reduce operational barriers and make doing business in the country cost-efficient, especially when you take the right steps and register the company.

Here’s why you should register a company in India.

Legal recognition and credibility

Registration makes your business legally recognized in India under the Companies Act, 2013. Formal legal recognition gives you broader, more straightforward access to essential processes and services like opening bank accounts, purchasing commercial property, and entering into legally binding contracts. Company registration also boosts credibility with the local community, including both customers and business partners.

Limited liability protection

In India, only registered companies can obtain limited liability protection, legally separating shareholders’ personal assets from company losses and debts. This structure limits shareholders’ liability to only their investment in the company, which is a defining element of many incorporated business structures in the country.

Access to business funding and investments

A registered company in India is able to raise funds from a variety of investors, including private equity firms, venture capitalists, and financial institutions. Unregistered companies face significant restrictions with fundraising and are usually limited to private loans and donation-based crowdfunding.

Compliance with Indian tax laws

Company registration in India ensures compliance with corporate tax laws, including income tax, goods and services tax (GST), and withholding requirements. It also gives you access to India’s many pro-business incentives, such as a reduced corporate tax rate.

Types of business structures in India

To know how to start a company in India, understand the different business structures available. The business structure determines both your liability and the regulatory obligations, so choosing the right one is critical.

Here are the most common business entity types.

Sole Proprietorship

A Sole Proprietorship is a company that’s owned and operated by one person. This structure is not legally separate from its owner and provides a simple setup process with minimal compliance requirements. Though this business type is owned by one person, it can still hire employees. Owners of sole proprietorships benefit from total control over their business and ownership of profits, but they also take on all liability for debts and losses.

Partnership Firm

A Partnership Firm is where two or more individuals enter into a business agreement. Like Sole Proprietorship, a Partnership Firm is not a distinct entity from the owners—partners take on an equal share of the profits and liabilities. This business structure is regulated under the Indian Partnership Act, 1932, which outlines the duties and responsibilities of partners and the requirements for formation and dissolution.

Limited Liability Partnership (LLP)

A Limited Liability Partnership (LLP) is similar to a Partnership Firm, but it’s a distinct legal business entity. This allows partners to separate the company from their personal assets, making LLPs ideal for smaller business owners who want to limit their liability. However, registering the company as a separate legal entity entails higher compliance costs.

One Person Company (OPC)

Like Sole Proprietorship, a One Person Company (OPC) is owned and managed by one individual. However, it’s defined as a separate legal entity from the owner, offering limited liability protection. OPCs tend to come with a more complicated setup process and stricter compliance standards compared to sole proprietorships.

Private Limited Company

A Private Limited Company requires at least two shareholders and two directors. You can be both a shareholder and a director, but the roles are legally distinct. 

Private limited companies are one of the most common structures for startups and companies looking to grow over time. Directors are responsible for overseeing business operations, while shareholders invest in the business as partial owners. Private Limited Company registration establishes the business as a separate legal entity, offering limited liability for shareholders.

Public Limited Company

A Public Limited Company is designed for larger operations and must have at least seven members, including a minimum of three directors. Like a Private Limited Company, it offers limited liability protection to shareholders with distinct roles for directors. 

A major benefit of a Public Limited Company is its ability to list on the public stock exchange. This allows businesses to open shares to the general public, dramatically increasing the potential for capital. However, public limited companies also operate under stricter compliance structures and have higher setup costs.

Requirements to register a company in India

After choosing the business structure that best fits your needs, make sure you meet the basic eligibility criteria and have the documents required for registration.

To register a company in India, you’ll need:

• The minimum number of directors and shareholders (varies by structure)
• Proof of a registered office address
• Memorandum of Association (MoA) and Articles of Association (AoA)
• Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) registration

Note: You also need a Digital Signature Certificate (DSC) and Director Identification Number (DIN), but they’re obtained during the registration process.

How to register a company in India

With the prerequisites in place, begin the formal registration process. Here’s how to register a company in India step-by-step.

1. Obtain a Digital Signature Certificate (DSC)

A DSC is an electronic signature that needs to be renewed every 1–2 years. Because the registration process in India is done entirely online through the Ministry of Corporate Affairs (MCA) portal, every authorized signatory must have a DSC.

You can apply for a DSC through a licensed Certifying Authority by providing the required identity proofs.

2. Apply for a Director Identification Number (DIN)

Anyone looking to be a director for an Indian company must have a unique DIN. Apply for a DIN via the comprehensive SPICe+ form or though a stand-alone DIR-3 form—both are available through the MCA portal.

3. Reserve the company name using SPICe+ Form (Part A)

Next, reserve the company name via SPICe+ Form Part A though the MCA portal. You can propose up to two names per application. The MCA has strict regulations for company names, so be sure to follow the naming guidelines. The company name must:

• Accurately reflect the company’s business activities
• Include the proper suffix for the business entity (LLP, Private Limited Company, etc.)
• Not infringe on existing trademarks or companies
• Not include misleading or restricted terms

4. File the incorporation application through SPICe+ Form (Part B)

Once the company name is approved, open the MCA portal, click on the company name, and fill out SPICe+ Form Part B. This portion requires the following information:

• Company structure
• Registered office address
• Share capital structure
• Director information and subscriber information

5. Submit MoA, AoA, and supporting documents

Fill out and submit the MoA and AoA, which outline critical information about the company. MoA defines company objectives and the scope of business activities, while AoA defines internal governance and management rules, including roles and shareholder rights.

6. Receive the Certificate of Incorporation from the MCA

After you submit the registration forms, the MCA reviews the application. Once the application is approved, the MCA issues a Certificate of Incorporation that includes your company’s name, a Company Identification Number, the date of incorporation, and PAN and TAN. 

Receiving the certificate makes the company legally recognized, allowing it to hire employees and independent contractors and operate freely in India.

7. Register for PAN, TAN, and GST (if applicable)

PAN and TAN are typically allotted automatically upon registration, so you don’t need to apply for them separately. GST registration, however, is a separate process handled through the GST portal. It’s mandatory for companies with turnover exceeding certain thresholds or engaging in activities that require compulsory registration, like interstate supply or e-commerce.

Stay compliant while expanding to India

Expanding business operations to India brings huge opportunities, but it also comes with several challenges around hiring, payroll, and immigration laws—especially if you’re setting up a local entity.

With the right partner, you can navigate these challenges confidently and access the lucrative Indian market smoothly. Use Oyster’s EOR services to hire full-time employees and manage teams from anywhere in the world seamlessly and compliantly. 

We also offer comprehensive support for Global Payroll and Talent Mobility, giving you all the tools to manage and support a distributed team.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, engage, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.