Company Registration for Online Sellers: Legality, Procedure and Requirements

It is an arduous and time-consuming process to create a new business in India, but if you learn from your mistakes, enjoy your laurels, and remain patient, the fruits of your labour will begin to pour in in no time.

To outline your business goals, financing and setup, you need a business plan. It becomes easier to start once you know in which direction you are going. Entrepreneurs looking to open their business must first obtain a license to run it. This article shares details on the process for the registration in India of online enterprises.

Company registration can be done in two ways in India for online companies, either as a private company or as a public company. You need to have a clear understanding of the Companies Act, 2013, to register your online company in India. Under this Act, any organization that wants to register as a company must apply.

Procedure:

Company registration process in India involves the following major steps:

1. Acquiring Director Identification Certificate
2. Acquiring Digital Signature Certificate
3. Application for company name
4. Company registration form and MoA and AoA submission
5. Incorporation of the company

Acquiring Director Identification Certificate (DIN)

This is the first stage in which a DIN needs to be obtained by each director and any planned director. A self-attested copy of the PAN of the Directors and address proof are the necessary documents.

Acquiring Digital Signature Certificate (DSC)

A digital signature must be submitted electronically, in compliance with the Information Act 2000. This shows the protection and authenticity of the submitted documents. Only a single manager must have a Class-2 digital signature credential (w.e.f. 01^st January 2021 Class-2 digital signatures have been replaced by Class-3 digital signature), which must be obtained from the organizations appointed by the certification controller or the CCA.

Application for the company name

It might be too difficult to pick a business name, and it is recommended that there are four alternative names ready. In a company search database, the shortlisted ones must be reviewed to ensure that nobody else has taken them. After the name is finalized, an application must be filed with RoC on Part-A of Spice Plus . The authorities will give an official confirmation or rejection of the word and the same must be preserved for future reference.

Company registration form and MoA and AoA submission

When the name is approved, the MoA and AoA must be accepted by sending the mandatory papers.

Incorporation of the company

The final step will be to obtain a certificate of company incorporation that finalizes the company’s registration process.

Documents Required for Company Registration

Entrepreneurs who are filing for a business want to know the list of documentation needed for the process. In this article, we provide specifics and explanations of the documents required to register a company.

Directors: Indian Nationals

The following documents are mandatory for Indian Nationals for incorporation of company in India:

PAN Card: For Company Registration, a copy of the proposed Directors of the Company PAN Card will be needed. A unique identification number provided by the Indian Department of Income Tax is a PAN or Permanent Account Number. During the incorporation process, it is mandatory for directors who are Indian nationals to send a PAN.

Note: For all business matters, the Ministry of Corporate Affairs will use the name on the PAN Card. Therefore, the PAN Card must be changed first in the event of an error in the term stated in the PAN Card or a change of name due to marriage or some other cause.

Address Proof: In addition to a copy of the PAN, the proposed Director must provide proof of address. The address proof submitted must include, as shown in the PAN Slip, the Director’s name and the most recent address of the Director. Furthermore, the document must not be more than two months old, either. For Indian Nationals, the following documents are appropriate to address evidence.

• Passport
• Election Card or Voter Identity Card
• Ration Card
• Driving License
• Electricity Bill
• Telephone Bill
• Aadhaar Card

Residential Proof: Residential evidence must also be provided during the company’s incorporation to verify the Director’s current address. The residential proof shall also contain the Director’s name, as specified in the PAN Card, and shall not be older than two months. The documents below are appropriate residential evidence:

• Electricity Bill
• Telephone Bill
• Bank Statement
• Mobile Bill

Director: Foreign Nationals

The following documents are mandatory for Foreign Nationals for incorporation of company in India:

Passport: In the case of foreign nationals, as proof of identity, a passport is mandatory. The access in the country in which it was issued must also be notarized or apostilled. If the document is written in a foreign language, it must be translated into English by an official translator and be notarized or apostilled. Also, suppose the passport does not contain the date of birth of the holder. In that case, it is appropriate to provide the Director with an additional document showing the date of birth, properly certified or attested, notarized or apostilled.

Address Proof: In addition to a copy of the Notarized or Apostilled Passport, the proposed Director shall present proof of address, which shall also be notarized or apostilled. The address proof submitted must include, as shown in the Passport, the Director’s name and the most recent address of the Director. Furthermore, for foreign nationals, the document must also be no older than one year. For Foreign Nationals, the following documents are appropriate to address evidence.

• Driving License
• Residence Card
• Bank Statement
• Government issued form of identity containing address.

In case the document is in a foreign language, it must be translated by an official translator and notarized or apostilled.

Residential Proof: In addition to addressing proof, to verify the current address of the Director, residential evidence must be submitted during incorporation of the Company. As applicable to the address proof, the Director’s name as alluded to in the Passport must also be included in the residential proof and must not be older than one year. Appropriate residential evidence is the following documents:

• Bank Statement
• Electricity Bill

• Telephone Bill
• Mobile Bill

In case the document is in a foreign language, it must be translated by an official translator and notarized or apostilled.

Registered Office Proof

• In addition to providing the Director with name, title and residential address, proof must be given for validating the company’s registered office address. The following documents are required during or within 30 days of company registration as proof of a registered office.
• Signed statement of possession of the premises of the registered office on behalf of the company; OR
• A notarized copy of the lease/leasing agreement on the company’s behalf, along with a copy of the receipt of rent charged for not more than one month;

In addition to the above, the following must also be provided as proof of registered office:

• The Landlord’s authorization to use the company’s premises as its registered office (name listed in the energy bill or gas bill or water bill or property tax receipt or sale deed). This is generally called landlord NOC; and
• Evidence of proof of any service such as telephone, gas, electricity, etc., that shows the address of the premises not older than two months on behalf of the holder or the record.

Shareholder: Indian National or Foreign National

All shareholders of the Company (i.e., subscribers to the Memorandum of Association (MOA) and Articles of Association) shall be provided with identity and address proof as detailed in the article (AOA).

Shareholder: Corporate Entity or Artificial Judicial Person

Suppose a corporate entity (company, LLP, etc.) is one of the shareholders or subscribers to the MOA and AOA. In that case, the corporate entity’s certificate of incorporation must be attached along with the resolution passed by the corporate entity to subscribe to the shares of the company under incorporation.

You need to pay the registration fees after all of this is completed so that the company can be submitted for registration. It has to be registered in the state where you work. The RoC will then issue you a Certification of Incorporation if all goes well, ensuring that your company is a registered one. You can then start conducting your business as soon as that is done.