Company registration in India Archives

One type of corporate structure that was developed and incorporated in accordance with the Companies Act of 2013 is the private limited company. Under the provisions of Section 2 of the Act, a Private Limited Company is defined as a company that restricts the rights to transfer its shares and places a limit of 200 members on the total number of members. Let’s make this definition a little easier to understand.

Corporations that are known as private limited companies are structures that are owned jointly by a number of shareholders who each control a portion of the company’s shares. However, there are limitations placed on the transfer of these shares. It is not possible for the shares of a private company to be available for free and public trading on stock exchange platforms.

A further point to consider is that members of the general public are not permitted to own shares in a private limited company. As we move on to the second portion of the definition, a Private Limited Company is restricted to having a maximum of two hundred shareholders. According to this, it is not possible for it to have more than 200 shareholders at any given time. On the other hand, the bare minimum of their numbers is only two.

What are the benefits associated with registering a private limited company in India?

Limited liability for personal assets: The shareholders of a private limited company are guardians of their personal assets. This means that your liability as a shareholder will be limited to the extent of your contribution to the company’s liability. Since the shareholders have no personal liability, they are not obligated to contribute any of their own assets to cover the company’s liabilities.
Legal Entity: A private limited company operates as an independent legal entity, distinct from its shareholders and directors. This signifies that the management of the company’s assets and liabilities, debtors and creditors, falls under its purview. The shareholders shall not bear liability for the company’s losses. Therefore, the creditors are precluded from initiating legal proceedings against the directors or shareholders in order to retrieve the funds.
Capital Raising: Despite the compliance obligations associated with registering a private limited company, entrepreneurs prefer this structure because it enables them to expand, raise funds through equity, and limit liability.
Credibility: In accordance with the Companies Act 2013, corporations in India are duly registered with the Registrar of Companies (ROC). The information regarding the organization is accessible to the public via the Ministry of Corporate Affairs (MCA) portal. Additionally, an inventory of all the directors is furnished during the company’s formation process. As a result, a private limited company is a more reliable business structure.
Sustained Existence: Until it is formally dissolved, a corporation maintains life or operation in perpetuity through “perpetual succession.” As an independent legal entity, a corporation remains operational despite membership modifications or terminations, unaffected by the demise or cessation of any representative.

In India, the process of registering a company is broken down into several steps.

The members or promoters of a Private Limited Company are required to meet some minimal conditions in order to initiate the formation of the company. These requirements include the number of shareholders, directors, name, and registration address. It is the responsibility of the promoters to ensure that the company is formally formed by the Registrar of Companies once all of the conditions have been satisfied. A step-by-step guidance to this application-based approach is provided below. This technique is described in more detail below. It is important to follow the guidance in order to finish the documentation and process of registering a corporation.

First Step: Obtain the DIN and DSC of the Promoters

A Director Identification Number, often known as a DIN, is required to be in possession of each and every director of a Private Limited business before the process of business registration may commence. The MCA website provides applicants with the opportunity to submit a form called DIR-3 along with supporting papers such as a photograph, a proof of address, and a personal identification number. Additionally, in order to validate the online application for company registration, the authorised director needs to possess a Digital Signature of Class 3 classification.

Step 2: Choose and Reserve the Name of the Company

You cannot just pick a word at random to use as the name of your organisation. In order for your clients to recognise it effectively, it must be representative of both your brand and the activities of your firm. In addition, the name must be in accordance with the rules established by the MCA, and it must not be identical to or similar to the name of an existing company, limited liability partnership (LLP), or registered brand. Before you register your business, you can come to us to verify that the name you have chosen for your firm is legal. Get the ROC to approve and reserve the name of your firm once you have determined that it is a legitimate name for your business.

In order to secure the name of the company, an application must be submitted in SPICE Plus PART. It is possible to submit a form to the ROC. There is a fixed government cost of Rs. 1,000, and the applicant has the ability to suggest two names for each application. After conducting an exhaustive review of the names that have been suggested, the ROC is going to reserve the name that is both legitimate and available for the company. After a name reservation has been made, the business will be sent a Name Approval Letter that is only valid for the following twenty days. The applicant is responsible for ensuring that the procedure of registering the company is finished within the allotted time during which it is valid.

Step 3: Draught MOA & AOA

The Memorandum of Association (MOA) and the Articles of Association (AOA) of the Company are two essential legal papers that must be submitted to the ROC in order to be registered. All of the shareholders are required to sign these documents in the presence of a public notary, and they must be written on stamp paper of an appropriate value. Afterwards, the Notary will affix a stamp to the documents, which will need further payment of stamp duty and notary fees. The company’s charter, which is also known as the MOA, is where the fundamental legal information is stored. On the other side, the AOA is where the norms and regulations with regard to internal management are documented.

Step 4: Save the Application for SPICE Plus

The web-based application known as INC-32, sometimes known as SPICE Plus, is filed for the purpose of business formation in India. It is broken up into two parts: PART A and PART B. Part A is the document that is submitted in order to obtain approval for the name of a company. On the other hand, PART B is an integrated application that is utilised for the incorporation of companies. To get your business registered with the ROC, you can get it registered by filling out this form and submitting it on the website of the MCA.

Step 5: Obtain a Certificate of Registration for the Company

An examination of the SPICE Plus application, including all of the required documents and fees, is carried out by the ROC. Following the completion of the thorough verification of all the information, the ROC will move forward with the process of registering the company. During this process, the firm is registered, and a Certificate of Registration is issued in its current name. The CIN, also known as the Corporate Identification Number, serves as the exclusive identifier of the firm and is included in the Certificate of Registration itself. In addition, the Company is provided with a PAN and TAN in its name, in addition to the Certificate.

In order to successfully complete the process of registering a private limited company in India, it is necessary to have a comprehensive understanding of all of the topics that are discussed in this blog. Having their comprehensive knowledge guarantees that the process of forming a business will be simple, uncomplicated, and devoid of any complications for you. This includes the processes of registration, as well as the documents, fees, and post-registration compliances. It is my hope that this site will provide you with all of the knowledge that you require concerning the same. In the event that you still have questions, you can get in touch with us to receive a free consultation, or you can express your inquiries in the comments area.

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A Checklist of the Documents Needed for the Registration of a Company in India

The key prerequisite for beginning a business in India is to have the necessary documentation for incorporation. Without submitting these documents along with the application to register a company with the ROC, the application will be considered incomplete. The ROC registration of a company is essential. Below you will find a list with descriptions of each of the documents that are necessary for the registration of a company in India. Before going to the ROC to get your company registered, you need to make sure that these paperwork have been prepared and drafted.

Records of the Company’s Founders and Directors

The “Know Your Customer” documents of the firm’s promoters are part of the initial set of documents that must be submitted in order to register a company in India. The earliest shareholders and directors of a company are called “promoters.” Promoters are those who are involved in the founding of the firm and have some stake in the company’s operations. All of these promoters will be required to produce scanned copies of the following documents, along with a self-attested copy of each one:

PAN Card
Aadhar card
As a form of identification, Indian promoters can present either their driver’s licence, their voter identification card, or their passport. Passports are required in the case of foreign promoters.
For the purpose of providing evidence of their address, promoters may present any utility bill or bank statement in their name that bears their address. The proof of address can’t be older than two months at the most.
Digital Signature–Class 3 Digital Signature of the Authorised Director to Sign the Application for Company Registration in the Case of a Digital Signature.

Records from the Company’s Registered Office

The documents pertaining to the Registered Office are the next piece of paperwork that must be submitted in order to successfully register a company in India. The address of an office that will serve as a business’s registered office must be provided when the firm is incorporated. This address is recognised throughout all available public records as the correspondence or communication address for the company. During the process of incorporation, you are required to submit the following documents relating to the Registered Office:

Proof of Registered Office Address – For this reason, you can produce any utility bill in the Company’s name that includes the registered office address. It is required that the Address Proof be no more than two months old.
No Objection Certificate- A No Objection Certificate is required to be granted by the owner of the office property, and it must be in a downloadable format that has been prescribed.

The Company’s Constitution and Related Documents

Finally, in order to register a corporation in India, there are specific legal documents that need to be created in the appropriate format. We have an experienced team in order to provide companies with assistance in this area. These papers, which are written on stamp paper with the required value, are used to create the company’s legal identity and are filed away. In addition, they have to be signed by all of the shareholders in the company in the presence of a public notary, as well as two other witnesses. The notary should affix their stamp to the documents so that they can be validated further. The following is a list of the documents that make up a company’s constitution:

Memorandum of Association: A company’s memorandum of association is also referred to as its “charter” because it contains the most essential legal basic facts for the company. It is broken up into numerous clauses so that these particulars can each be highlighted in their own right. The memorandums of both a private limited and public limited company each contain six provisions, whereas the memorandum of a one-person company contains seven clauses. To facilitate a better grasp of the situation, each of these clauses is presented in full below.

Name Clause: Mentions the name that has been approved for use by the corporation in its entirety.

The Registered Office Clause specifies the state in which the company’s official headquarters are located.

The object clause provides information on the major business activity or activities carried out by the company. The goal of a company must be in compliance with Section 8 of the Companies Act in order for the firm to be considered a section 8 company.

Clause Regarding Liability: This clause discusses the liability of the corporation, which is:

Capital Clause: The information regarding the Authorised and Subscribed Capital of the Company can be found in this clause.

Nominee Clause, is applicable only in the case of a one-person company. It provides information about the Shareholder’s Nominee, who would take his place in the event of his passing or departure from the company.

The company’s internal management is governed by a set of rules and regulations that are outlined in the company’s articles of association. These regulations are unique to each company, and their establishment is left up to the company’s top management personnel. Some of the major laws include the procedure for admitting a new shareholder, the grounds for removing an existing shareholder, the manner in which shares can be transferred and transmitted, the convertibility of shares, the procedure for winding up the company, and other similar rules.

Declarations and Other Documents

During the process of incorporating a company, in addition to the documents listed above, certain forms and declarations must also be presented. The following is a list of the forms and documents that need to be completed:

INC 9 – INC 9 is a declaration that is given by the shareholders and first directors of the company, affirming that they have not been convicted of any legal offence in the past, have not been found guilty of breach of duty or violation of the Companies Act, and that the documents and information submitted with the company registration form are true to the best of their knowledge. INC 9 is a declaration that is given by the shareholders and first directors of the company.

INC 14 – INC 14 is a declaration that is given by a practising professional, which may be an advocate, chartered accountant, cost accountant, or company secretary, certifying that all of the provisions, rules, and regulations of the Companies Act and Company (Incorporation) Rules have been complied with during the process of drafting the MOA and AOA for the company, as well as submitting the application for incorporation. INC 14 is required in order to incorporate a company in India.

The DIR 2 form is the document that individuals who wish to be appointed as directors of a corporation use to provide their approval to having that position created. In order to tell the ROC that the approval of the directors has been obtained prior to their definitive appointment in the business, the form is required to be presented alongside the application for company registration.

Conclusion

It is impossible to overestimate the significance of the documents that are necessary for the formation of a company in India. These documents, which serve as the connecting link between your objectives as an entrepreneur and your obligation to conform to the law, pave the way for a successful and legally compliant foundation of a firm. You are prepared to start the process of company formation with ease and accuracy if you have a full understanding of the numerous documents that are required for business registration. These documents include promoters’ KYC, proofs of registered office, company constitution, and declarations. Do not be reluctant to seek our support in the event that you run into any problems!

Related Info

Company Registration in India

Private Limited Company Registration in India

Company Incorporation in India

Sole proprietorship company registration in India

One person company registration in India