Overall process

I decided to start a private limited company. This is generally the option if you intend to seek venture funding and/or have shareholders at some point in time. The basic requirements, as set by the Govt. of India, is that the private limited company should have a minimum share capital of INR Rs. 1 lakh (100000.00) and at least 2 directors. 

The share capital will determine how you name the company. For example, the share capital should be at least INR 5 lakhs if you intend to have the word "India" in your company name. If you intend to use the word "corporation", then the share capital should be at least INR Rs. 1 crore. 

The overall process is the following:

1. The proposed directors should apply for a DIN (Director identification Number) and a DSC (Digital Signature Certificate). Note that the DIN application should contain no abbreviations. If you are not an indian citizen, you will need to get certified true copies of the passport and visa from your embassy.
2. Select at least 3 names for your company, and apply for name availability with the Registrar of Companies on form 1A.
3. Once the name has been approved, you will have 60-days to file incorporation documents. The incorporation documents include the all important Memorandum of Association (MoA) and the Articles of Association (AoA.  It also includes Form 18 (registered office of the company), Form 32 (list of directors), Form 1 (Compliance letter from the company).
4. If all goes well, you will get the incorporation certificate from the Registrar of Companies via registered post to the registered office of the company. Somebody better be there to collect it else it will go into a black hole.
5. Get a property lease agreement for the registered office. If you own the property, make sure property tax is paid fully and get a tax receipt.
6. Apply for a PAN and TAN account numbers from the Income Tax office.
7. Get a company "for" seal. This seal says "For Company XYZ...     Director".
8. Design a company letterhead.
9. Open a bank account. This is called a current account and there are a number of options based on the average quarterly balance (AQB) you can maintain. The minimum AQB is INR Rs 10000. This requires a whole host of documents including the incorporation certificate, MoA, AoA, board resolution for authorized signatories in the specific bank format on company letter head, list of directors on company letter head, PAN of the company, PAN cards of the director.  All documents must be stamped by the company seal at the "correct" places.
10. If you import/export, you need to get the Importer Exporter Code (IEC) from the Joint Director General of Foreign Trade. IEC code is useful if you want to preserve the foreign currency earned in a separate account in the bank. 
11. Register with the Karnataka Shops and Commercial Establishments office for  your registered office. This is a state authority and will depend on your local state.
12. Registration for professional tax (employer and employees).
13. If you expect service revenue of over INR Rs. 10 lakhs a year, you must register for service tax.
14. If you sell goods, you must register for VAT.

A lot depends on what your business does and there may be additional requirements. It is best to go through a professional. The professional fees vary widely.

 For a share capital of INR Rs. 5 lakhs, the cost breakdown is as follows:

1. Government fees and deposits: Rs. 38,800
2. Professional fees: Rs 25,000
3. Other costs (stationery, seal, reimbursements): Rs. 27,500