Software Company Registration

All Factors About A Software Company Registration

Online Legal India LogoBy Online Legal India Published On 02 Sep 2022 Updated On 17 Jan 2023 Category Company Registration

There has been an increase in software companies entering India. We are witnessing an increase in the number of software firms due to the global digital revolution. The legal complications and procedures, of registering a software company may be both exciting and difficult.

Basic Procedures of Software Company Registration

Finding a distinctive and evocative name for your software company and registering it with the Registrar of Companies is the first and most important step in the registration process. 

The next step is to get a Company Identification Number, or CIN as it is more often known after the name has been registered. 

The next step is to wait for the Registrar of Companies to submit all the necessary paperwork. Please keep in mind to be as specific as you can when submitting. Include all important information, such as the names of all shareholders, the total share capital, finances, and other pertinent details. You will be the legal owner of the aforementioned software firm upon verification and acceptance of the submission, at which point you will apply for a registration certificate.

Legal Process Used to Register a Software Company

A software business must first choose its directors before incorporating. The total number of directors should range from 2 to 8, inclusive, and should not fall below or rise over that. 

Director Identification Numbers (DIN) must be provided to the directors. 

They must apply for a DIN if they do not already have one. 

To apply for this, they must submit documentation of their identity and place of residence. 

The identity evidence can be a PAN card, passport, driver's license, or voter identification, and the address proof can be a DL, ration card, EB bill, passport, telephone bill, or passport. The pre-registration procedure and the post-registration process are the two parts of the legal requirements for establishing a software company in India

The following formalities are part of the pre-registration process:

Registration of the Company’s Name

You must do a company name search to see whether or not your desired name is accessible before registering it for the new software firm. 

If it isn't accessible, you might have to think of some alternate names while keeping in mind the MCA naming requirements.

Getting a DIN, or Directors Identification Number

It is the first & most crucial step in creating a new software company in India. Ideally, there should be two to eight directors, but neither more nor less. Each director must have their own DIN. Directors can receive DIN by presenting identification documents, including a passport, voter ID, and PAN card, as well as evidence of residency documents like a ration card or an EB bill.

Incorporation Certificate Application

The following action is to submit an application for a Certificate of Incorporation. 

You must now prepare a Memorandum of Association outlining the founding principles and first activities of the organization. 

One must present this form along with Form 1A when applying on the department's official website.

Acquire a digital signature certificate (DSC)

A corporation is needed to have an authentic digital signature on the papers supplied electronically under the terms of the Information Technology Act, 2000. 

Additionally, this guarantees the security or validity of electronically filed papers.

Create an account on the MCA Portal

This relates to creating a registered user profile on the MCA website in order to fill out an electronic form, pay fees online, and do other business-related activities. 

It costs nothing at all to create an account. 

Tap on the registration link to register for the MCA site.

Documents for Software Company Registration

For proposed Indian national directors of a software company 

A copy of an Aadhaar card has required 

A copy of each director's or shareholder's Aadhaar card, which serves as a crucial form of identity, must be provided. If your contact detail is connected to your Aadhaar Card, it is straightforward to create DSC. When completing e-forms for a software company registration, Digital Signature Certificate is essential to securely sign crucial documents.

Passport-size photo 

A passport-size photo is a vital part of identification documentation, and it's also needed when filing for a digital signature.

All directors' & shareholders' self-attested copies of their PAN cards 

It should be approximated to the rest of the documents since your Permanent Account Number is crucial data. Otherwise, the procedure of forming a firm might halt. It is often a good idea to amend any PAN-related documents before submitting an application for business registration. Aadhaar Cards, Passports, Voter IDs, and Driving Licenses are a few examples.

Identity Proof

Self-attested copies of your driver's license, voter ID card, or Aadhaar card are acceptable forms of identification.

The Address Proof

Along with evidence of identification, you must also present proof of address. For this, an applicant may offer any of the following records:

Bills for power, telephone, and mobile phone service, as well as the most recent account statement from the bank.

The name on the documents & the PAN must match to make the verification procedure successful.

They shouldn't be older than two months.

Directors of Foreign Nationals

  • When prompted, foreign nationals must provide their passports as identification. 
  • Before submitting the passport, it needs to be translated into English.
  • All identification & address proofing papers must be authenticated by an apostille if the prospective company's director is a foreign national.
  • Proof of Address

Documents for Registered Office

Evidence of a business address

You can use the registered office's power, phone, water, or gas bill as proof of the corporation address. When a bill is introduced for an incorporation certificate, it must not have been more than two months old.

Leased commercial real estate

You must file a Rent Agreement if you operate your business from rented real estate. To register it as a registered office, you also need the landlord's No Objection Certificate (NOC).

Owns commercial real estate

You must present a NOC even if you are the property's proprietor. This is because there are two separate legal commodities—the company and the owner—in the business.

Steps to follow for starting a Software Company

  • One must first provide a short description of the business, including the kind of product, field, target, and technology you want to utilize. 
  • Everything pertaining to such programs, such as how they will be created and distributed to customers, must be included.
  • Then decide on the business structure, such as a partnership, private corporation, or sole proprietorship. 
  • The size of the company, the scope of risk, the target market, as well as the budget, are the main determinants of the type of business. 
  • Whether you want to reach a national or international audience, plan accordingly.
  • Choose a region to learn more about the current business legislation in that area.
  • Register your software business with the ROC. 
  • It is essential to apply the similar location where the head office is located during registration.
  • Make a decision about the location of your workplace. 
  • You need to begin employing personnel once you have the ROC certificate in hand.
  • For legal job offerings and hiring, it is preferable to register with the state or regional Department of Employment. 
  • Applying in 1 state may entitle you to employment throughout India. 
  • Without registration, there can be issues with your employment procedure.

Factors You Should Consider Before Registering a Software Company

Select a proper body

With different types of corporate bodies like private limited company, public limited company, sole proprietorship, and LLP; selecting the company that best suits your unique business demands and objectives is crucial. Try to get competent business advice from Chartered Accountants, Company Secretaries, and Lawyers who may assist you in weighing your alternatives.

Create the ideal team 

You need the ideal blend of characteristics, abilities, and knowledge to launch your product. 

A strong staff will be ready to back you up and provide peace of mind when you make important decisions for the expansion of your company. To avoid any future issues, ensure you get the necessary legal documents, such as a partnership agreement and an employment agreement.

Focusing on the problems that your target market is experiencing 

Sometimes while developing a concept, business owners go off course and create something different, which may or may not be beneficial. However, producing goods that consumers desire and genuinely require is critical.

Test, analyze, and iterate 

Getting the product flawless the first time is quite unlikely for a startup. Software testing assures quality, assists in identifying and fixing errors and boosts customer happiness. Even though there may be many errors and failures, every iteration moves you one step closer to realizing your goal. Additionally, you may keep testing, evaluating, and iterating long after your product has been released.

Benefits of Company Registration

Legal Body

A company is a real-life, existing legal body. It is a legal construct with a separate existence from its directors & stockholders. It is a legal entity created in accordance with the Companies Act. An organization that has been incorporated has its own rights, is responsible for its own debts, and manages its own legal processes. A firm develops a distinct identity upon incorporation. 

It has more legal authority since a corporation may hold property and amass debts without individual members of the business being held accountable for the debts of the company's creditors.

Easy Transfer of Shares

There may eventually be a need to transfer business ownership, and in these situations, it might be more difficult for unregistered business organizations. 

A sole proprietorship may only transfer asset ownership; it cannot be sold. 

Limited liability protection 

Since every firm is vulnerable to losses, one of the key benefits of registering is that it provides limited liability protection, releasing the owners of the company from responsibility for its debts. It is impossible to lose personal property.

Obtain funds

You must look for and secure financing if you want to advance your company. 

Debt or equity are two possible sources of funding. 

Incorporating a business makes the fundraising process more accessible and attracts more potential investors. 

Additionally, most banks and financial organisations favour funding registered firms over unregistered entities.

Brand awareness

The most significant asset is a registered firm, which has the potential to be sold to subsequent generations of business owners or left as an inheritance. 

For sustainability, a company must be registered.


When registering a software company, several laws and regulations must be followed. The constitution and other laws governing businesses that are currently in effect in India were derived from British-era regulations. According to the New Companies Act of 2013, all businesses in our nation must be registered.


Share With :