How to Start Construction Company in India

During the past years we have seen some ups and downs with the construction Companies but the industry always has demand and where there is a demand, there is always an opportunity to grow. Choosing the right business direction is a very important aspect from the growth perspective as one must ascertain whether he/she wants to be the next big general contractor in their area or want to build a successful small business construction company in a specific niche market.

In this article we have focused on how to start a construction company in India as the expectations with this sector are increasing on a current basis. Being a Capital intensive business Yes there are requirements for the license to be applied, equipment to be bought.

A construction company could be formed and the business can be started both in the government and private sector. The construction business with the government projects can be done by procuring the government projects through the website of the State government or Central government.

Noting the point that for the government contracts an application for empanelment as a contractor with each of the government departments is to be made.

Ways to start construction business in India

You can go with following legal business structures which are suitable for the construction business depending upon the amount of money invested.

• Sole Proprietorship Firm
• Partnership Firm
• Limited Liability Partnership
• Private Limited Company
• Public Limited Company

Legal Window can help you in registering your Construction business with any of the above mentioned entities.

Moreover, we would recommend you to register your construction business as a Private Limited Company as it is the most popular form of doing business and also has certain advantages like easy to register, separate legal entity, limited liability etc.

Minimum requirement for starting Private Limited Company for construction business in India

• Minimum Two persons as Directors and maximum Fifteen
• Minimum Two persons as Shareholders
• In case of foreign Entity or individuals opting to incorporate Private Limited Company as a Private Limited Company then Minimum one Director shall be Indian resident
• Digital Signatures of Subscriber and Directors (Don’t worry Legal Window will help you in getting the same)
• No Minimum Capital requirement.
• Director Identification Number if available. (Don’t worry Legal Window will help you in getting the same)

It totally depends on you that whom you want to associate the post of Director or the person investing in your company shall be your member and how much shares he/she shall hold.

In this article we will try to enlighten your knowledge on the process of registration of construction business as Private Limited Company:-

Procedure for registering of Private Limited Company for construction business in India

• Selecting the name of the Company: You should select the name that will highlight your business area i.e. construction business like Unique Dream Builders, Reliance Infrastructure Private Limited Company etc.
  The name should be unique, different, eye catchy and should not match with the name of any other Company. Legal Window can help you select the desired and apt name for your construction business.
  We will file an online application of the name to the Ministry of Corporate Affairs you have selected for your business securing it for a period of 20 days before filing the application for registering the company so that nobody else uses the same and in the meanwhile we will begin with the application process for registration. For the same you have to go to the second step as stated.
• Submission of documents: For better understanding we will share a questionnaire asking the documents and analyzing the type of your work and guiding you towards the best results. Also, we will be requiring the following documents for registering your construction company:
  • Identity Proof (PAN Card of the Members and Directors of the proposed Construction Company, Passport in case of Foreign Nationals)
  • Other Identity Proof of the Member and Directors (Aadhar Card/Voter ID/Driving License/Passport)
  • Address Proof the Member and Directors (Utility Bill/Telephone Bill/Mobile Bill/Bank Statement not older than two months)
  • Latest passport size photograph of Member and Directors
  • Business Address Proof
  • Owned Property : (Copy of Registry and Latest Govt. Electricity Bill or Water Bill) ,Rented/leased : Rent Agreement, NOC from the Owner, Latest Govt. Electricity Bill or Water Bill)

Note:– In case of NRI or Foreign National documents of Directors and Subscribers must be notarized or apostilled.

• Drafting of documents:- The main object of the construction company should have the construction and the infrastructure activities as the prime area for work, We will draft your charter documents i.e. Memorandum of Association and Articles of Association keeping in mind the core work of the construction company and the areas in which it might expand in future as the Company can only carry out such activities which are mentioned in its charter documents.

• Submission of documents:- We will submit your application for registration of Company in SPICE+, it will include the certification from the Company Secretary or the Chartered Accountant as a mandatory legal requirement. The Memorandum of Association and Articles of Association shall also be filed online along with SPICE+ in SPICE e-MoA, SPICE e-Articles of Association.
  The Ministry of Corporate Affairs has also provided a special facility of mandating opening of Bank Account in your preferred bank, registration under ESIC, EPFO and has also provided an option to apply for the GST number in another e-form called as AGILE-PRO.

• Getting the Construction Company registered:- Once the field application gets approved by the Registrar it will share the Incorporation Certificate stating that your Company has been registered.

What Legal documents a Construction Company gets after registration from Legal Window

• Name Approval Letter
• GSTIN Registration Certificate, if applied
• Opening of new Bank Account
• ESIC Registration Certificate
• EPFO Registration Certificate
• DIN of two Directors
• PAN and TAN Certificate
• Digital Signature Certificate
• Certificate of Incorporation
• Memorandum of Association and Articles of Association

Enrollment with big construction Houses

Initially for doing the construction work enrollment with the different Limited companies is important, as these companies help in providing you construction work according to the profile of your company which can be started with a small amount of work.

Preparation of Construction Company profile

The construction Company profile forms an important element of the construction company’s bid documents & its general communications material, like corporate brochures, websites and annual reports. In addition to the basic information such as physical location & year of establishment.

For an effective construction company’s profile it should include the information that explains the type of work which company handles, its capabilities, resources and financial stability. The profile should be around 300 to 400 words. Legal Window can help you in drafting and preparing the profile of your construction company.

Search for the project manager, Lodging of quotation for the project work, Issue of work order by a company, Acceptance of work order, Starting of construction work, Issue of work contracts

Searching for the project manager of a company is also important for getting the work done by booking an appointment with him for a meeting. The next thing you need to do at the time of meeting is submitting your profile.

If the meeting works, you are required to submit the project quotation to the project manager signed by a company’s designated officer.

If the other company is satisfied with your profile and your quotation submitted it will issue a work order  which shall state all the terms and conditions regarding the payment and the scope of work . So it is advised to read it carefully. If you find the work order fit then you may go ahead with accepting the order by sending the acceptance to the company.

 At last invoices are to be issued upon completion of work.

Filing of various returns with the Income Tax department

There are various statutory returns to be filed with the Income Tax Department as specified under the Income Tax Act, 1961 and also under the GST Act.

 In order to know more about the returns kindly click below on the mentioned