Registration of Business and Startups in India: August Edition 2025
- Pushpendra Chaturvedi
- Aug 3
- 7 min read
Updated: Sep 1
Contents:
Starting a business in India involves navigating a complex legal landscape. Whether you're launching a startup, forming a partnership, or establishing a private limited company, having the right legal documents is crucial for compliance, clarity, and protection. This blog explores key legal documents—Partnership Deed, Founders Agreement, Shareholders Agreement, LLP Agreement, Service Level Agreement (SLA), and Private Limited Company Registration—detailing their registering authorities, registration processes, requirements, and use cases under the Indian legal system.
1. Partnership Deed [ Registration of Business and Startups in India]
Overview
A Partnership Deed is a written agreement between partners forming a partnership firm under the Indian Partnership Act, 1932. It outlines the terms, roles, responsibilities, profit-sharing, and operational guidelines of the partnership.
Registering Authority
Registrar of Firms (RoF): Each state in India has a Registrar of Firms responsible for registering partnership firms. Registration is not mandatory but is recommended for legal recognition and to avoid disputes.
Registration Process
Draft the Partnership Deed: Create a comprehensive deed detailing partner contributions, profit-sharing ratios, duties, and dispute resolution mechanisms.
Execute on Stamp Paper: The deed must be printed on stamp paper, with the value varying by state (e.g., ₹200–₹2,000 depending on capital contribution).
Submit to RoF: File the deed with the Registrar of Firms along with Form A (Statement of Particulars) and required documents.
Pay Fees: Fees vary by state, typically ₹500–₹5,000 based on capital contribution.
Obtain Certificate: Upon verification, the RoF issues a Certificate of Registration.
Requirements [ Registration of Business and Startups in India]
Identity proof (PAN, Aadhaar, or passport) of all partners.
Address proof (utility bill, voter ID, or Aadhaar).
Partnership Deed on stamp paper, duly signed by all partners.
Proof of registered office (rent agreement or NOC from the landlord).
Form A with details of partners, firm name, and business nature.
Use Cases
Small Businesses: Ideal for small-scale enterprises like retail shops or local service providers where partners pool resources.
Professional Firms: Commonly used by professionals (e.g., accountants, consultants) for collaborative ventures.
Temporary Ventures: Suitable for short-term projects where partners want flexibility without complex compliance.
Example: Two friends starting a catering business can use a Partnership Deed to define their investment, roles, and profit-sharing to avoid future conflicts.
2. Founders Agreement [ Registration of Business and Startups in India]
Overview
A Founders Agreement is a contract among co-founders of a startup, outlining their roles, equity distribution, responsibilities, and exit strategies. It’s critical for startups to prevent disputes and align expectations.
Registering Authority
Not Formally Registered: A Founders Agreement is a private contract and does not require registration with any authority. However, it should be notarized and executed on stamp paper for legal enforceability.
Registration Process [ Registration of Business and Startups in India]
Draft the Agreement: Include clauses on equity split, roles, decision-making, vesting schedules, and exit provisions.
Execute on Stamp Paper: Use non-judicial stamp paper (value varies by state, typically ₹100–₹500).
Notarization: Get the agreement notarized to enhance its legal validity.
Store Safely: Maintain signed copies with all co-founders for reference.
Requirements [ Registration of Business and Startups in India]
Identity proof of all co-founders (PAN, Aadhaar, or passport).
Stamp paper for execution.
Clear terms on equity, roles, IP ownership, and dispute resolution.
Optional: Legal consultation to ensure compliance with startup goals.
Use Cases
Tech Startups: Defines co-founder roles (e.g., CEO, CTO) and equity for tech ventures seeking funding.
Early-Stage Ventures: Clarifies contributions (e.g., capital, skills) in startups with multiple founders.
IP Protection: Ensures intellectual property created by founders is assigned to the startup.
Example: Three co-founders launching a fintech startup can use a Founders Agreement to allocate 40%, 30%, and 30% equity, define roles, and protect the app’s IP.
3. Shareholders Agreement [Registration of Business and Startups in India]
Overview
A Shareholders Agreement governs the relationship between shareholders of a private limited company, detailing rights, obligations, share transfers, and governance. It complements the company’s Articles of Association (AoA).
Registering Authority
Not Formally Registered: Like the Founders Agreement, it’s a private contract, but it should be aligned with the Companies Act, 2013, and filed with the Registrar of Companies (RoC) if referenced in the AoA or MoA.
Registration Process
Draft the Agreement: Include clauses on share transfer restrictions, voting rights, dividend policies, and dispute resolution.
Align with MoA/AoA: Ensure consistency with the company’s Memorandum of Association (MoA) and Articles of Association (AoA).
Execute on Stamp Paper: Use stamp paper (₹100–₹500, depending on state laws).
Notarization: Not mandatory but recommended for legal enforceability.
File with RoC (if required): If linked to MoA/AoA, submit relevant extracts during company filings.
Requirements [ Registration of Business and Startups in India]
Identity proof of shareholders (PAN, Aadhaar, or passport).
Stamp paper for execution.
Details of shareholding percentages, rights, and obligations.
Alignment with Companies Act, 2013, and company’s MoA/AoA.
Use Cases
Private Limited Companies: Regulates shareholder relationships in companies seeking investor funding.
Minority Protection: Safeguards minority shareholders’ rights against majority decisions.
Exit Strategies: Defines processes for share sales or transfers during exits or disputes.
Example: A startup with angel investors can use a Shareholders Agreement to restrict share transfers and ensure investors’ voting rights.
4. LLP Agreement [ Registration of Business and Startups in India]
Overview
An LLP Agreement is a mandatory document for a Limited Liability Partnership (LLP) under the Limited Liability Partnership Act, 2008. It governs the rights, duties, and operational framework of partners and the LLP.
Registering Authority
Registrar of Companies (RoC): The Ministry of Corporate Affairs (MCA) oversees LLP registration, and the RoC handles filings under the LLP Act, 2008.
Registration Process
Name Reservation: File eForm 1 (LLP-RUN) on the MCA portal to reserve a unique LLP name (valid for 3 months).
Incorporate LLP: File eForm FiLLiP with details of partners, designated partners, and consent to act as partners.
Draft LLP Agreement: Include clauses on capital contribution, profit-sharing, management, and dissolution.
Execute on Stamp Paper: Use stamp paper (value depends on state and capital contribution, e.g., ₹500–₹5,000).
File eForm 3: Submit the LLP Agreement to the RoC within 30 days of incorporation (penalty of ₹100/day for late filing).
Obtain Certificate: RoC issues the Certificate of Incorporation upon approval.
Requirements [ Registration of Business and Startups in India]
Minimum two partners, with at least two designated partners (one must be an Indian resident).
PAN and address proof (Aadhaar, passport, voter ID, or utility bill) of partners.
Digital Signature Certificates (DSCs) for designated partners.
Designated Partner Identification Number (DPIN) for designated partners.
Proof of registered office (rent agreement, NOC, or sale deed).
LLP Agreement on stamp paper, signed by all partners.
Use Cases
Professional Services: Ideal for lawyers, CAs, or consultants due to limited liability and flexibility.
Small Businesses: Suitable for SMEs wanting limited liability without heavy compliance.
Startups: Used by startups not seeking heavy external funding but needing a formal structure.
Example: A group of accountants forming an LLP can use the LLP Agreement to define their contributions, roles, and profit-sharing while limiting personal liability.
5. Service Level Agreement (SLA) [ Registration of Business and Startups in India]
Overview
A Service Level Agreement (SLA) is a contract between a service provider and a client, defining the scope, quality, and timelines of services. It’s common in IT, outsourcing, and vendor relationships.
Registering Authority
Not Registered: SLAs are private contracts and do not require registration with any authority. They should comply with the Indian Contract Act, 1872, for enforceability.
Registration Process
Draft the SLA: Specify service scope, performance metrics, timelines, penalties, and dispute resolution.
Execute on Stamp Paper: Use non-judicial stamp paper (₹100–₹500, depending on state).
Sign by Parties: Both parties (provider and client) must sign the agreement.
Notarization (Optional): Enhances legal validity but not mandatory.
Requirements [ Registration of Business and Startups in India]
Clear definition of services, deliverables, and performance metrics.
Stamp paper for execution.
Contact details and signatures of both parties.
Clauses on breach, termination, and dispute resolution.
Use Cases
IT Services: Defines uptime, response times, and support for software or cloud services.
Vendor Contracts: Ensures timely delivery and quality for supply chain vendors.
Outsourcing: Regulates performance expectations in BPO or KPO agreements.
Example: A startup hiring an IT vendor for cloud hosting can use an SLA to ensure 99.9% uptime and penalties for downtime.
6. Private Limited Company Registration [ Registration of Business and Startups in India]
Overview
A Private Limited Company (PLC) is a separate legal entity registered under the Companies Act, 2013, offering limited liability, perpetual succession, and credibility for fundraising.
Registering Authority
Registrar of Companies (RoC): The RoC, under the Ministry of Corporate Affairs (MCA), handles PLC registration.
Registration Process
Obtain DSCs: All directors and subscribers need Digital Signature Certificates.
Apply for DIN: Obtain Director Identification Numbers for directors via SPICe+ Part A.
Name Reservation: File SPICe+ Part A for name approval (valid for 20 days).
File Incorporation Documents: Submit SPICe+ Part B with MoA, AoA, and other documents.
Pay Fees: Fees depend on authorized capital (e.g., ₹7,000–₹10,000 for ₹1 lakh capital).
Obtain Certificate: RoC issues the Certificate of Incorporation upon approval, typically within 7–12 days.
Requirements [ Registration of Business and Startups in India]
Minimum two directors and two shareholders (can be the same).
PAN, Aadhaar, or passport of directors/shareholders.
Address proof (utility bill, voter ID, or Aadhaar).
Proof of registered office (rent agreement, NOC, or sale deed).
MoA and AoA defining company objectives and bylaws.
DSCs and DINs for directors.
No minimum capital requirement (post Companies Amendment Act, 2017).
Use Cases
High-Growth Startups: Preferred for tech startups seeking venture capital or angel investment.
Large Enterprises: Suitable for businesses aiming to scale and issue shares.
Global Operations: Facilitates FDI and international expansion due to credibility.
Example: A tech startup planning to raise VC funding can register as a PLC to issue shares and ensure limited liability for founders.
Conclusion
Choosing the right legal structure and documents is critical for startups and businesses in India. A Partnership Deed suits simple partnerships, while a Founders Agreement aligns co-founders in startups. Shareholders Agreements protect investors in PLCs, and LLP Agreements offer flexibility for professionals. SLAs ensure service quality, and PLC registration provides credibility for growth. Each document requires careful drafting, compliance with Indian laws, and, where applicable, registration with authorities like the RoC or RoF. Consulting legal experts and using platforms like IndiaFilings, LegalWiz, or Vakilsearch can streamline the process, ensuring your business is legally sound and ready to thrive.
Sources:
Limited Liability Partnership Act, 2008
Companies Act, 2013
Indian Partnership Act, 1932
Indian Contract Act, 1872
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