Have a wonderful business idea but don't know where to start?
Here is everything about incorporation of a company in India.
Step I - Determination of type of company to be incorporated in India
There are several types of companies that can be incorporated in India, each with its own advantages and disadvantages. Here are the most common types of companies in India:
Private Limited Company (PTC): A PTC is the most popular form of company in India, and it requires a minimum of two and a maximum of 200 shareholders. The liability of the shareholders is limited to the extent of their share capital. A PTC cannot issue shares to the public and is required to use the words "Private Limited" after its name. A PTC requires minimum 2 directors.
Public Limited Company (PLC): A PLC is a company that has seven or more shareholders, and there is no upper limit on the number of shareholders. The liability of the shareholders is limited to the extent of their share capital. A PLC can issue shares to the public and is required to use the words "Limited" after its name. A PLC requires minimum 3 directors.
One Person Company (OPC): An OPC is a company that can be formed with just one shareholder. The liability of the shareholder is limited to the extent of their share capital. An OPC is required to use the words "One Person Company" after its name. An OPC requires minimum 1 director.
Note: for incorporating a company in India, one director needs to be resident in India.
Overall, the choice of company type will depend on various factors, such as the nature of the business, the number of shareholders, the liability of the shareholders, and the ease of operation and compliance. It is recommended to seek the assistance of a professional service provider or consultant to choose the most appropriate type of company for your business.
Step II - Reservation of a company name with the Ministry of Corporate Affairs
The second step in the company registration process is reserving the name of the company.
For reserving the company name, applicant needs to apply maximum 2 names with the Ministry of Corporate Affairs in e-form Spice+ Part A.
The applicants may provide maximum two names in application and must follow all the norms of the naming convention.
Once the application is submitted, the Registrar of Companies (ROC) will review the application and approve the name if it meets the necessary requirements. Once the name is approved by the Registrar of Companies it is reserved for 20 days. The name approval letter can then be used to incorporate the company. It is important to note that the approval of the proposed name is subject to various rules and regulations.
Step III - Procuring Digital Signature Certificates.
The next important step is procurement of Digital Signature Certificate from the authorised agencies for all the proposed directors and subscriber for filing necessary forms for incorporation of a company with the Registrar of Companies.
Step IV - Drafting of Memorandum of Association and Article of Association.
The Memorandum of Association (MOA) and Articles of Association (AOA) are two important documents that are required for the incorporation of a company in India. Here is a brief overview of the drafting process for both these documents:
Memorandum of Association (MOA):
The MOA is a legal document that outlines the company's objectives and powers, and it must be drafted in accordance with the Companies Act, 2013.
Articles of Association (AOA):
The AOA is a legal document that outlines the company's internal rules and regulations, and it must be drafted in accordance with the Companies Act, 2013.
Step V - Filing of necessary e-forms with the Registrar of Companies for incorporation.
Once Digital Signature Certificate, Memorandum of Association and Article of Association is ready applicant needs to file following necessary e-forms with the Registrar of Companies for incorporation of a company:
a. Spice+ Part-B : Application for incorporation of a company
b. e-MOA : For approval of Memorandum of Association of the company
c. e-AOA: For approval of Article of Association of the company
d. INC-9: Declaration by directors and shareholders
e. E-AGILE: Application for GST Registration, Provident Fund Registration, ESIC Registration, Opening of Bank Account
Documents required at the time of application for incorporation of company
Self attested copy of a PAN card
Self attested copy of Aadhaar card
For address proof : Electricity Bill/Bank Statement/ Postpaid Mobile Bill (Any one not older than 2 months)
Passport size colour photo
Electricity bill for registered office address (Not older than 2 months)
Mobile no and Email id of all the directors and shareholders
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