• How-to

So you want to start your own business in Mumbai? Well, if you are somewhat of a lone ranger who is unwilling or unable to hire a company secretary, this could be quite a chore—a month-long process, in fact. Here’s what you would need to do.

1. Get a DIN number
The director identification number (DIN) can be applied for online at the Ministry of Corporate Affairs (MCA) portal: www.mca.gov.in. Upon filling the Form DIN-1 online, you will be granted a provisional DIN. A signed application form must then be sent to the MCA, along with a proof of identity and address. You will get a permanent DIN in a month, provided all documentation holds good.

Time: 1 day
Cost: Rs. 100

2. Get a digital signature
You can obtain a Class II digital signature certificate online from any of the six private agencies authorized by the MCA. This signature is required for using the new electronic filing system. Any one of your company’s directors can apply for the signature by submitting the application form along with proof of identity and address. The fee varies across agencies.

Time: 3 days
Cost: Rs. 1,500

3. Get your company name
You can electronically reserve your company name online with the Registrar of Companies (ROC). First, you will have to check the availability of the desired name on the MCA website. Then, you would need to approach the ROC in Mumbai with a maximum of six suggested names, which are then checked for similarities with other names in India. Once cleared, the selected name will appear on the portal. Do note that you’ll have to manually keep checking the website for the same.

Time: 2 days
Cost: Rs. 500

4. Get the company documents stamped
You would need to get your company’s incorporation documents stamped at the State Treasury or an authorized private bank. The request must be accompanied with unsigned copies of the Memorandum of Association (MOA), Articles of Association (AOA), and the payment receipt. Copies that you submit to the treasury or the bank must be clean and not signed.

The Superintendent of Stamps will return the copies, one of which is stamped, signed, and embossed, showing payment of the stamp duty. These copies must be signed and dated by all the promoters. It should include the company name, a description of its activities and purpose, father’s name, address, occupation, and the number of shares subscribed. This must be in your handwriting and duly witnessed.

Time: 1 day
Cost: Rs. 1,300 (Rs. 200 for MOA + Rs. 1,000 for AOA for every Rs. 500,000 of share capital or part thereof + Rs. 100 for stamp paper for declaration Form 1)

5. Get the Certificate of Incorporation
This can be procured from the ROC. To do so, the following forms must be electronically filed on the MCA website: e-form 1; e-form 18; and e-form 32. The fee for these three forms varies according to the authorized capital. Scanned copies of the consent of the initial directors, and also of the signed and stamped form of the MOA and AOA must be attached to Form 1. The fees for registering a company can be paid online by credit card or in cash at certain banks.

Additionally, one copy of the Memorandum of Association, Articles of Association, Form 1, Form 32, Form 18, the original name approval letter, consent of directors, and stamped power of attorney must be physically submitted to the Registrar of Companies.

The Certificate of Incorporation is then mailed automatically to your company’s registered office by registered post.

Time: 5 days
Cost: The registration fee to be paid to the ROC depends on the company’s authorized capital.

1. Rs. 100,000 or less: Rs. 4,000. If the nominal share capital is over Rs. 100,000, additional fees based the amount of nominal capital apply to the base registration fee of Rs. 4,000

2. For every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 100,000, up to Rs. 500,000: Rs. 300

3. For every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 500,000, up to Rs. 5,000,000: Rs. 200

4. For every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 5,000,000, up to Rs. 1,000,000: Rs. 100

5. For every Rs. 10,000 of nominal share capital or part of Rs. 10,000 after the first Rs. 10,000,000: Rs. 50

6. Get a seal made
You would need to get a company seal made to issue share certificates and other documents, even though it’s not really an incorporation requirement. The cost will vary with the number of words to be engraved, the number of seals required and the delivery period.

Time: 1 day
Cost: Rs. 300 to Rs. 500

7. Get PAN
Under the Income Tax Act, each person must quote his or her Permanent Account Number (PAN) for tax payment purposes. You can get a Permanent Account Number (PAN) from an authorized franchise or agent appointed by the National Securities Depository Ltd. (NSDL) or the Unit Trust of India Investors Services Ltd. (UTIISL).

UTIISL manages IT PAN Service Centers in all cities where there is an Income Tax office. To apply for your PAN, submit a Form 49A to one of the service centers along with a certified copy of the certificate of registration, proof of your company address and proof of personal identity.

For more details, see www.incometaxindia.gov.in, www.utiisl.co.in, and www.tin.nsdl.co.in.

Time: 7 days
Cost: Rs. 67 (Rs. 60 application fee + 12.36 percent service tax + Rs. 5 for application form, if not downloaded)

8. Get TAN
You need to have a Tax Account Number (TAN) for income taxes deducted at the source from the Assessing Office in the Mumbai Income Tax Department. Under the income tax act, all persons who deduct or collect tax at the source must apply for a TAN.

The application for allotment of a TAN must be filed using Form 49B and submitted at any TIN Facilitation Center that is authorized to receive e-TDS returns. Locations of the TIN Facilitation Centers can be found at www.incometaxindia.gov.in and http://tin.nsdl.com. Payment can be made both offline and online, but the hard copy of the application form must be physically filed with the NSDL.

Time: 7 days
Cost: Rs. 57 (Rs. 50 application fee + 12.36 percent service tax)

9. Register with local authorities
You will have to register your business with the Office of Inspector, Shops, and Bombay Shops and Establishments Act. To do this, you will have to send a statement containing the employer’s and manager’s names, the establishment’s name (if any), postal address, and category to the local shop inspector with the applicable fees within 30 days.

Under the Establishments Act, the fee varies as follows from Rs. 100 to Rs. 4,500, depending on the number of employees. Plus, an annual fee (three times the registration fee) is charged as trade refuse charges (TRC) under the Mumbai Municipal Corporation Act.

Time: 2 days
Cost: Rs. 100 to Rs. 4,500 + 3 times registration fee for trade refuse charges

10. Register for VAT
You will have to register for the Value Added Tax (VAT) at the local Sales Tax office to be able to pay taxes. Here, you will need to go the registration counter, where a clerk verifies the application and then forwards you to a sales tax officer. This officer enters all the information on your Form 101 into the system, which then generates a Tax Identification Number. Apart from the 101, you will also need true copies of MOA and AOA, proof of permanent residential address, a proof of place of business, a passport-sized photograph, a copy of the PAN card, and a challan on Form 210 showing payment of registration.

Time: 12 days
Cost: Rs. 5,100 (registration fee Rs. 5,000 + stamp duty Rs. 100)

11. Register for Profession Tax
You are required to register for the Profession Tax at the local authority office. Under the Profession Tax Act, every employer (not being an officer of the government) is liable to taxation and shall obtain a certificate of registration from the prescribed authority. The registration authority for Mumbai is located at Vikarikar Bhavan, Mazgaon. The application should be supported with documents like proof of address, company registration number, details of the head office, company deed, and certificates under any other Act.

Time: 2 days
Cost: No cost

12. Register for PF
Under the current laws, any business with 20 or more employees engaged in any of the 183 industries and classes of business establishments throughout India is required to register with the Employees’ Provident Fund Organization (EPFO).

You are required to provide necessary information to the regional EPFO in the prescribed manner to be allotted an Establishment Code Number. No separate registration is required for the employees; they are, however, required to become members of the fund. An individual account number is allotted by the employer in the prescribed manner.

Time: 12 days
Cost: No cost

13. Register for medical insurance
You can register for medical insurance at the regional office of the Employees’ State Insurance (ESI) Corporation by submitting the Form 01. After registration, you can apply for individual insurance for your employees. You will need to obtain the correct information from your employees and then submit it to get the ESI cards.

Time: 9 days
Cost: No cost

Note: Step 7 to 13 can be completed simultaneously with previous procedures. The above steps are for a private limited company.

©Entrepreneur October 2009

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business, Mumbai, set up