A company registration in India to start a business takes about 35 days on an average in a city like Mumbai. It is the least amount of time taken by any city in India for the start of a business. Albeit Indian law does not impose on any minimum capital requirement for the start up of the business, however it still takes about 74% of the per capita income to officially start a business. There are scopes for decreasing the rates and timings for a company registration. Since the computerization of system has been done, it has reduced the PAN and TAN registration to a considerable amount.
India still lags behind in overall ease of starting a business, because of the time taken in the whole procedure. The scope of reducing the time and rate to register a company lies in the e-governance. The e-governance in India has initiated a project known as MCA-21 which works to facilitate and ease the filing of electronic forms for the registration process.
How to Register a Company in India
To register a company in India it takes several separate registrations. These registrations include TAN, PAN and VAT registration which top the list. After these basic registrations are completed, then the company needs to register to the labour department's employees' department of provident fund and the employee's state insurance fund which are also known as EPFO and ESIC respectively. The company then goes for state registrations of Shops and establishment acts are carried out. Each of these registrations takes different time span with respect to their city. Hence we see the difference in timings for the whole process, which is least for Mumbai and highest for Kolkata.
From this fact we can see that the scope for reduction of registration time in India can be greatly reduced, if each of the cities starts practicing the best practices. Coherence in the processes is also a very important need here.
A suggestion of reducing the time to register a company in India can also be the use of a unique number for each company. Using this number a company could use for the registration of the company, its tax and social security, thereby reducing the 7 step process to just one.
Company registration in India is even now a complex and expensive matter. After going through the whole procedure to register a company, obtaining the required licences for building a warehouse remains extremely costly. The cost remains as high as up to 606% of per capita income.These are the factors which need to be taken care of before one gets for company registration.