What are the Registrations Required to start a Real Estate Business?

26 Aug, 2021

Real estate is one of the most popular businesses in India, and it is growing exponentially. Entrepreneurs from all over the world are coming to India and getting lucrative deals in this ever-growing market. However, before you start any business, it is important that you know what registrations are required for your business type, which will help keep things organized. This will structure things for you as well as make sure everything goes smoothly from registration of property with Municipal Corporation or PCMC (Property Cell).

There are many registrations needed to start real estate businesses, as real estate is heavily regulated by authorities. In a country like India, where the economy is developing, there are many opportunities, and you leverage several investment opportunities in this industry. However, you need to be fully aware of the legislation that comes along with it.

Here's we bring you a detailed guide of the registrations required to start a real estate business in India:

Getting Started with Your Real Estate Business

First things first, you will have to choose a business structure under which you will run your business. Here are the business structures you can choose from for running your real estate business in India:

Proprietorship

This is where you have a single owner, and the business is owned by one person. Sole proprietorship has some advantages, but it also comes with disadvantages that may not suit your requirements. The biggest disadvantage of running a proprietorship as a real estate firm in India is that there's no protection at any time since you are solely responsible for all debts and losses made by the business.

Public Limited Company

A public limited company is a company that has offered a large part of its shares to the general public. These companies are usually huge corporations who have managed to do well in other forms of business entities and now want to go big by making themselves public. If your real estate business is growing exponentially and you need a huge sum of money going ahead, a Public Limited Company might be a good choice for you.

Private Limited Company

A private limited company is a limited liability company, which is owned by a single person or a small group of people. This is the most popular business structure in India because it offers the best of both worlds: protection and limited liability.

Limited Liability Partnership (LLP)

This is a type of partnership where the liability is limited to the amount invested by each partner. Each partner here is not liable for the debts of other partners, just their own.

Partnership

A partnership business is another amazing business structure for running your real estate business in India. It is a venture between two or more people who invest in the business and will share responsibilities, gains, and losses. Partnerships are subject to the division of assets on dissolution. Partnership companies in India are not as popular, but they do have the advantage of being able to share profits with other investors.

There is a lot more detail and structure that goes into each type of business entity, and each comes with its fair share of pros and cons. The information we've provided above is just a brief overview of what these entities entail. We recommend doing a thorough study on each type whenever you plan to go with one.

Registrations Required for a Private Real Estate Business in India

Here are the minimum requirements for registering a private real estate company in India:

2 Directors (Minimum) are required

You will need a minimum of two directors in your company to start a real estate company in India.

2 Shareholders in the Company are a Must as Well

In order to register a private real estate company in India, you will need at least two shareholders. Both your directors can also be your shareholders.

A Unique Name of the Company

You will need to get a unique name for your company, which you can do by registering the business with the Registrar. Here you have to make sure that no other company has the same name before you register.

A Registered Office in India

Your office address has to be an Indian address.

Documents Needed to Get a Company website for Your Real-Estate Business

Here is a little overview of the documentation required to register a private real estate company in India:

1. PAN Addition
2. Adhar based on different directors and shareholders
3. Email ID or bank statement
4. Value for Digital Signatures

Capital Needed for Registering a Company in India

There is no minimum capital needed to register a company in India. But as this is a capital-intensive industry, you will need to have a fair reserve of cash with you. You can start off with a minimum investment in India. But it is advisable that you invest a higher capital and start off big because this will help you make more money in the future. There are a number of different things you can invest in.

You might want to consider starting off by investing in fixed assets. A good investment for this is a property or land, which you can then use as your building ground - that way, you'll be able to build the foundation of your real estate business.

RERA Regulation for Real Estate Company

Along with the registration-specific requirements, you will have to abide by the RERA regulations for your real estate company. The section below discusses the RERA regulations you'll have to comply with.

Real Estate Project Registration

Each and every project developed by your company must be regulated by RERA. This means that your company will have to register every project with RERA and get approvals for it from them. The RERA registration would be set as per the state RERA regulations.

Registration of Agents

Any agent or broker would have to get a license under different protection laws of the RERA state they belong to. Your agents need to be registered as well in order to ensure they are providing services legally.

The choice here depends upon how your real-estate company works and grows going ahead.

Final Words

The best way to run a real estate company is by registering it with a suitable entity and working under all the regulations. Once you do that, your liability will be restricted, and this would ensure that you can make money without worrying about anything else.

Real estate is an area that is in need of regulation. As such, it is important to register your business with the authorities for this very reason. Make sure you register your company as soon as possible, so your growth never hampers owing to regulatory circumstances.