• How-to

There are many forms in which a business can be organized. Usually, the models which are popular are the sole proprietorships, partnerships, including Limited Liability Partnerships called (LLP) and company, public/private. While there are certain processes that are common to any form of business organization, each one of the above has certain peculiar requirements. This article analyzes the requirements for starting a private limited steel manufacturing company with an authorized capital of Rs.6 crore in Orissa.

Incorporation Procedure
To begin with, a company needs to be incorporated. For that, the startup has to obtain Directors Identification Number (DIN ) for each director from DIN Cell, Ministry of Corporate Affairs. Every individual is required to obtain an eight digit DIN before he can be appointed as the director of a company. This would cost Rs.100 for each director and take about two days to obtain.  The company must then look at obtaining digital signatures for any one director and shareholder from authorized agents of registering authorities. This will enable the company to file incorporation documents online and at a later date submit hard copies of the same. The process involves a cost of Rs.300-Rs.2,500 and takes about a day to complete.

An application in Form No. 1A needs to be filed with the Registrar of Companies (ROC), Orissa. The application is required to be signed by one of the promoters. The application should contain four alternative names for the proposed company. (The name can be coined names from the objects of the proposed company or the names of the directors, etc. but should definitely be indicative of the main object of the company. Justification for the name needs to be specified along with the application).

It should also contain names and addresses of the promoters, authorized capital, and main objects of the proposed company. The process will cost Rs.500 and take about three days.

The company then has to pay a stamp duty on Memorandum and Articles of Association and other documents with the state treasury department. This depends on authorized share capital. And assuming a capital of Rs.6 crore for a manufacturing unit for steel, the duty will set you back by Rs.660 and take a day.

The company than has to submit Form No 18, filed by one of the directors of the company informing the ROC the registered office of the proposed company. Form No 32 also needs to be submitted stating the fact of appointment of the proposed directors on the board of directors from the date of incorporation of the proposed company and is signed by one of the proposed directors. The approval of name by ROC also needs to be submitted in original. All the papers have to be submitted with ROC of Orissa. Assuming an authorized capital of Rs.6 crore, the process will cost Rs.4.08 lakh and a day to complete. The ROC will issue certificate of incorporation in about three days.

Other Formalities
For tax purposes, the company has to obtain a Permanent Account Number for the business from the income tax department in Orissa or through authorized agents appointed by National Securities Depository Services Limited (NSDL) or Unit Trust of India (UTI) Investors Services Ltd. To obtain a PAN would cost Rs.94 and take seven days. The company must also obtain a Tax Deduction at Source Number for the business from the same authorities and will cost about Rs.60 and seven days.

The company must register under Central Sales Tax if it intends to engage in inter-state trade in India from the Orissa Central Sales Tax Department. This would cost about Rs.25 and take seven days. It is also imperative for the company to obtain registration under Value Added Tax (VAT) or Orissa Sales Tax. Any company which engages in sales within the same state of more than Rs.10 lakh has to file VAT or Sales tax. An application for VAT/sales tax will cost Rs.100 and seven days to process.

The company would also need registration for manufacturing of excisable goods under Central Excise Tax from the Orissa State Excise Department at no charge. It would need commercial registration under the Shop and Establishment Act from the Municipal Corporation or any other authority which can be obtained in about five days. It will also have to register under Employee Provident Fund and Miscellaneous Provisions Act 1952 from Employee Provident Fund Organization at no charge and in 15 days.

©Entrepreneur March 2011

Tags:
company, manufacturing, Orissa, steel