Ok, you may or may not be knowing that I started my entrepreneurial journey a couple of months back. In this blog, I will try to describe the steps I went through to get my company, “Deep Thought Systems (P) Ltd.” registered.
The first thing was to decide to start a business, particularly embedded system product development ( the only thing I know to make a living :-)). A few of my friends also joined me, some as investors and some as active people willing to shoulder some responsibility. Next question was the type of company to be formed. As you probably know, there are different kind of companies like proprietorship partnership, limited liability partnership, private ltd and public ltd companies. Due to the nature of our business and also due to the fact that we will be dealing with international clients, we decided to form a Pvt Ltd company.
The next step was to decide on a chartered accountant to carry out the formalities of forming the company. The first person, who was referred by a contact of one of our members, didn’t appear to be knowledgeable enough on these matters and hence we did not go with him. Then we got a reference for a firm in Cochin from one of my entrepreneurial friends, Dhanan. He was Paulose from Paulson Associates in Ernakulam. On a telephonic talk with him, we found him capable and thus we decided to entrust the task to him.
A private ltd company needs a minimum of 2 directors and we decided to have 3. Next thing to decide was the capital we want to raise. The minimum authorized capital should be INR 1,00,000/- and the registration fee is decided based on this amount. We decided to go with a figure of 10L since we plan to invest that much amount. The first step was to get the Directors Identification Number (DIN) and the digital certificate for one director. For the above steps, photo copies of PAN card and address proof of directors along with 2 passport size photographs are required. A consent letter signed by each director separately should also be given which authorizes the CA to file the documents on our behalf. All these are done online now a days and they can get this done in 1 to 2 days.
The next step was to give the application to get the name for the company. CAs can check the proposed name online to see the availability. We need to give the preferred name along with a couple of alternatives to them. We need to specify the purpose of the company and the nature of business. CA advised as not to be too specific and try to be more generic while defining the purpose so that we get some leeway to diversify to similar or related areas.
On 9th October, 2012, we met the CA at his office and gave all the necessary details and required advance (Rs. 6500). All the formalities were completed and the name was allotted to us on 14th October, 2012. Then we transferred the remaining amount for the registration which was Rs 44,600/-.
The next step was to submit the Memorandum of Association and Articles of Association. CA prepared these docs by October 24th, but we could meet him only on October 27th. All the 3 directors have to write a few details, like name, address, etc in own hand writing and sign on all pages of these documents which are about 8 pages (MoA) and 12 pages (AoA). The catch is that you are not allowed to make even a single mistake ! So if one makes mistake, others will also have to write again ! So this was like a test especially since we hardly write now a days but only type .
These documents are then scanned and uploaded to the ROC (Registrar of Companies) website. Fortunately for us, everything was alright and we got the certificate of incorporation by 31st October. So the total time taken to register the company was just 22 days.
Here is a summary of main expenses
- RoC filing charges – 27,000
- DIN application for 3 – 4800
- Digital certificate – 750
- Professional charges – 13,000
- Others (stationery, printing, etc) – 6000 (aprox)
Total was 51,100/-
Hope this will help some of you who want to start something on your own !