Top 5 Myths About Company Registration in India (2025)

Starting a business in India is an exciting journey — but many entrepreneurs hesitate to take the first step because of misconceptions and outdated information about the company registration process.

In reality, with the Ministry of Corporate Affairs (MCA) adopting a completely digital system and simplified compliance framework, incorporating a company in 2025 is faster, cheaper, and easier than ever before.

In this article, we’ll debunk the top 5 myths about company registration in India, explain the facts behind them, and help you understand the modern, streamlined process of starting your business the right way.

 

Myth 1: “Registering a Company in India is Complicated and Time-Consuming”

The Reality:

That may have been true a decade ago — but not anymore. The MCA has revolutionized the incorporation process by launching SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) — an integrated online form that combines multiple registrations into one application.

Today, you can register a Private Limited Company or LLP from anywhere in India in just 7–10 working days, provided your documents are in order.

The New Simplified Process (2025):

1. Apply for DSC (Digital Signature Certificate) for directors.
2. Reserve company name using the RUN or SPICe+ form.
3. File SPICe+ (INC-32) along with Memorandum of Association (MOA) and Articles of Association (AOA).
4. Obtain PAN, TAN, EPFO, ESIC, GSTIN, and bank account — all integrated into one submission.
5. Get Certificate of Incorporation (COI) digitally from MCA.

Timeframe: 7–15 working days (depending on document accuracy and state processing).

Fact Check: You don’t need to visit any office or stand in queues — the entire process is digital, with approvals handled online.

 

Myth 2: “You Need a Lot of Money to Register a Company”

The Reality:

This is one of the most common myths — and it’s completely false.
Under the Companies Act, 2013, there is no minimum paid-up capital requirement to start a private limited company in India.

You can even start with a nominal capital of ₹1,000 or ₹10,000, depending on your business needs.

Typical Costs of Company Registration (2025):

Expense Head	Approx. Cost (₹)	Details
DSC & DIN	2,000–3,000	Digital signatures for directors
Name Reservation	1,000	Via RUN or SPICe+
Government & Stamp Fees	1,000–5,000	Depends on state & capital
Professional Support	5,000–10,000	For documentation & filing

Total Cost: ₹10,000–₹20,000 (approx.)

Fact Check: Registering a company in India is affordable, especially with professional help from firms like India Company Setup, which offers end-to-end incorporation at transparent pricing.

 

Myth 3: “You Must Have a Physical Office to Register a Company”

The Reality:

Not true. While a registered office address is mandatory, it doesn’t have to be a commercial space.

You can use:

• Your residential address, or
• A shared workspace address, or
• A virtual office (with proper documentation).

The only requirement is that the registered office must be capable of receiving official correspondence from the MCA, ROC, and other government authorities.

Documents Required for Registered Office Proof:

• Recent utility bill (electricity, water, or telephone — not older than 2 months)
• Rent agreement (if rented property)
• No-Objection Certificate (NOC) from the property owner

Fact Check: Many startups and small firms in India today are registered at home addresses. What matters is compliance, not location.

 

Myth 4: “Foreign Nationals or NRIs Cannot Register a Company in India”

The Reality:

False again. The Companies Act, 2013 and FDI (Foreign Direct Investment) Policy allow foreign nationals and NRIs to incorporate companies in India, subject to sectoral caps and compliance with FEMA (Foreign Exchange Management Act, 1999).

Key Points for Foreign-Owned Companies:

• At least one director must be a resident Indian (staying in India for ≥182 days a year).
• The company can be a Wholly Owned Subsidiary (WOS) or Joint Venture (JV).
• FDI is allowed under automatic route in most sectors (no government approval needed).
• All foreign documents must be notarized and apostilled in the home country.

 

Fact Check: Global companies like Google, Amazon, and Microsoft started as subsidiaries in India through this same process. Even small and medium foreign firms can register with ease.

 

Myth 5: “Once You Register a Company, Compliance is Too Burdensome”

The Reality:

While compliance is essential, it’s not as complex as it seems — especially with professional support and digital tools available in 2025.

The MCA has simplified post-incorporation compliances with clear timelines and online filing systems.

Mandatory Post-Incorporation Compliance Checklist (2025):

Compliance Requirement	Timeline / Frequency	Form / Action
File Declaration of Commencement of Business	Within 180 days	Form INC-20A
Appointment of Auditor	Within 30 days	Form ADT-1
Conduct First Board Meeting	Within 30 days	Record Minutes
Maintain Statutory Registers	Ongoing	As per Companies Act
Annual ROC Filings	Annually	AOC-4, MGT-7
Income Tax Return Filing	Annually	Form ITR-6
Accounting & Audit	Ongoing	Mandatory for all companies

Fact Check:

• Small companies and startups enjoy compliance relaxations under MCA.
• Digital filings, e-verification, and online documentation make compliance much simpler today.
• Partnering with a professional firm ensures you stay compliant effortlessly.

 

Bonus Myth: “LLP Registration is Always Better Than Private Limited Company”

The Reality:

While LLP (Limited Liability Partnership) offers lower compliance, it’s not always the best choice — especially for startups planning to raise funding or expand.

Criteria	Private Limited Company	LLP
Legal Identity	Separate Legal Entity	Separate Legal Entity
Compliance Cost	Moderate	Low
Fundraising	Easy (VC/Investors prefer)	Limited
Ownership Transfer	Simple (via shares)	Complicated
Tax Benefits	Eligible for startup tax benefits	Not all benefits available

Fact Check:

If your goal is scalability, investment, and brand growth — a Private Limited Company remains the most preferred and investor-friendly business structure in India.

 

Common Misconceptions Cleared

• You can’t start a company alone → You can, under One Person Company (OPC) structure.
• You need a lawyer to register → Not mandatory; professionals like CA/CS can handle registration.
• You need to wait months for approval → Most approvals now come within 10–15 working days.

 

FAQs on Company Registration Myths (2025)

Q1. Is it mandatory to hire a CA or CS for company registration?
While not mandatory, it’s highly recommended to ensure compliance and error-free documentation.

Q2. Can two people start a private limited company?
Yes, that’s the minimum requirement — two directors and two shareholders (they can be the same).

Q3. What if I don’t start operations after registration?
You must still comply with basic annual filings; non-compliance may attract penalties.

Q4. Can I convert my LLP or proprietorship into a private limited company later?
Yes, MCA allows conversion through prescribed forms and procedures.

Q5. Can I register a company without GST?
Yes, GST registration is optional until your turnover crosses ₹40 lakh (₹20 lakh for service sector).

 

Conclusion: Simplify Company Registration with India Company Setup

The process of registering a company in India has evolved — it’s no longer complex, expensive, or restricted to large corporations. The myths surrounding it are outdated.

With the right guidance, you can register your business quickly, legally, and affordably — and start operating with full compliance.

At India Company Setup, we provide:

• Private Limited Company registration under MCA
• LLP and OPC incorporation
• Post-registration compliance management
• Expert CA/CS assistance and legal advisory

Our team ensures your incorporation is seamless from start to finish.

Contact Us Now! Call 9915731447 today and get your company registered the right way — with clarity, compliance, and confidence.