5 Common Mistakes to Avoid When Registering Your Company

Mistake 1: Choosing a Name That Gets Rejected

The MCA name approval process rejects about 30% of applications. The most common reasons:

Too similar to an existing company — "ABC Technologies Pvt Ltd" will be rejected if "ABC Tech Pvt Ltd" already exists

Using prohibited words — words like "National," "Republic," "President," "Emperor," "Crown" are restricted

Generic names — names that describe a product or service too broadly (like "Software Solutions Pvt Ltd") are often rejected

Trademark conflicts — if the name matches a registered trademark, it will be rejected

How to avoid it: Always search the MCA company name database (available on mca.gov.in) before applying. Keep 2-3 backup names ready. Make the name distinctive and unique to your business.

Mistake 2: Mismatched Documents

The number one cause of processing delays is a mismatch between documents:

How to avoid it: Before starting the process, lay out all documents side by side and verify that names, addresses, and dates are consistent. Get fresh photographs taken.

Mistake 3: Ignoring the Registered Office Requirement

Many founders plan to run their business from home or a co-working space but do not realise the documentation requirements:

Owned property: Property tax receipt or sale deed

Rented property: Rent agreement (notarised in some states) + NOC from landlord + utility bill in landlord's name

Co-working space: Many co-working spaces provide virtual office agreements that are acceptable

How to avoid it: Sort out your registered office documents before you begin. If using a home address, get the NOC signed by the property owner. The NOC is a simple one-page letter — we provide templates.

Mistake 4: Starting with Too Little Authorised Capital

Authorised capital is the maximum amount of share capital the company is allowed to issue. While there is no minimum, starting too low creates problems:

₹1 lakh authorised capital: Adequate only for shell companies or holding entities

₹10 lakh: Sufficient for most service-based startups

₹25 lakh+: Required if you plan to raise angel investment soon

Increasing authorised capital later requires filing SH-7 with MCA, which costs ₹5,000-15,000 in fees and takes 7-10 days.

How to avoid it: Start with ₹10 lakh authorised capital unless you have a specific reason for less. The additional MCA fee is only ₹500 more than ₹1 lakh.

Mistake 5: Not Planning Post-Incorporation Compliance

Many founders think registration is the end of the process. In reality, there are several mandatory steps within the first 30-180 days:

Open a bank account within 30 days and deposit the initial subscription money

Issue share certificates to all subscribers within 60 days

File INC-20A (declaration of commencement of business) within 180 days if the company was incorporated after November 2019

Appoint an auditor within 30 days of incorporation (file ADT-1 within 15 days of AGM)

Hold the first board meeting within 30 days

How to avoid it: Work with a professional who handles end-to-end registration, not just incorporation. At CompanyKholo, our packages include all post-incorporation filings.