Everything about Registering a Software Company in India

The technological advancement in India inspires tech-enthusiasts establishing software companies. As Start-up India is getting massive support from the Government of India, more and more individuals are coming up with innovative ideas and focusing on establishing companies.

Setting up a company will not allow individuals to immediately start their operations. For this, they have to follow certain rules and regulations and, most importantly, register it as a company according to the New Companies Act, 2013.

This piece talks about the process for software company registration; read on!

How to Register a Software Company in India?

Here is a detailed breakdown of the registration process.

Step 1: While registering a software company, individuals must get approval on the company name and consent from the Registrar of Companies.

Step 2: Next, they have to get the Company Identification Number (CIN).

Step 3: After that, they have to submit all legal documents along with legal forms (shareholders, share capital, funds and related information in the forms). At this stage of application, applicants have to mention essential information about the company.

After getting approval on these submitted documents, applicants can apply for the registration.

What Is the Legal Procedure to Start a Software Company?

The legal procedure of starting a software company includes certain pre-registration mandates. These are as follows,

Obtain Direct Identification Numbers
Complete Reservation of Company Name
Provide Digital Signature

Here is an in-depth discussion on each of these processes. Read on.

1. Obtain Direct Identification Numbers

While setting up a software company, focus on selecting the directors first. Here, the number of directors can range from 2 to 8. Directors must obtain Directors Identification Numbers (DIN). To obtain a DIN, they have to submit identity proof and residence proof.

2. Complete Reservation of Company Name

At this stage, individuals have to apply for a company name. Applicants can select a name for their software company from the available 5-6 options. If they do not find their preferred name, they can choose a name of their own. Next, they have to apply for incorporation and submit a Memorandum of Association with information on the company's first director and operations.

3. Provide Digital Signature

Applicants have to complete this procedure online. Applicants have to submit the application form and Form-1A at the official website of the concerned department. The Information Act, 2000 mandates a valid electronic signature on all important documents uploaded for software company registration. The digital signature increases the security of the application procedure. Next, individuals must obtain a Digital Signature Certificate (DSC). Applicants who already have a DSC need not apply for the same.

Note: Applicants must get a Digital Signature Certificate through the CCA (Controller of Certificate Agencies) appointed agencies.

Once individuals complete all these procedures, they have to create an account on the MCA portal. Registered account on the MCA website helps individuals file e-form, online fee payment, and complete transactions as registered and business users. Remember, applicants can create an account on the MCA portal free of cost.

The sections mentioned above answer the questions of how to register a software company in India. However, applicants have to complete certain other steps along with these steps and provide information accordingly. Read on to know about these in detail!

What Are the Steps to Follow While Setting up a Software Company?

Step 1: At first, provide a description of the software company, including the type of product, field, target, type of technology used, process of developing software and distribution in the market.

Step 2: Next, applicants have to choose the business structure or form a sole proprietorship or private or partnership depending on the size of their company, range of risk, target, budget. They have to plan as per their goal whether they want to continue their operations within the country or across borders.

Step 3: After that, choose a preferred region and learn about rules and regulations operational there.

Step 4: Complete the registration process under the Registrar of Companies. File an application to the head office as well.

Step 5: Select a suitable place for an office. Once applicants get an Incorporation Certificate from ROC, they can start hiring employees.

Step 6: Try to register in the respective region or State of Department of Employment. Registration in this department in the respective region or State helps employers/applicants legally hire new employees and offer new jobs. In case they fail to complete registration, they can face issues regarding the same.

Step 7: Applicants can register under STPI (Software Technology Parks of India). Registration under this organisation helps software company developers avail legal benefits and other benefits, including tax breaks and many others.

With this detailed discussion, this piece on the process for software company registration comes to an end. Follow the steps mentioned above and complete the registration process of a software company without any hassle.

Frequently Asked Questions

✓ What documents must applicants submit as identity proof and residence proof while acquiring Directors Identification Number?

Applicants must submit a PAN card, Passport, Driving Licence or Voter’s ID as identity proof and Driving Licence, Ration Card, EB bill, Passport or Telephone bill as residence proof while acquiring Director Identification Number.

✓ What is the validity period of Digital Signature Certificate (DSC)?

The validity period of a Digital Signature Certificate (DSC) is 1 or 2 years.

✓ Is it mandatory to renew Digital Signature Certificate?

Yes, it is mandatory to renew Digital Signature Certificate after its expiry.