How to incorporate a company in India? | Bhavya Sharma & Associates

 

INCORPORATION OF A PRIVATE COMPANY IN INDIA:

Private Limited Company is one of the most preferable form of business entities in India. Rules and Regulations of a private company are governed by the Companies Act, 2013. In this article, we have discussed the important provisions related to the incorporation of a private limited company in India.

 Shareholder/Member: Minimum two members are required to incorporate a private limited company. Whereas, the maximum limit goes up to 200.

 Directors: Minimum two and Maximum Fifteen

 Initial Capital: Members can start a company with a minimum capital of Rupees two.

 Authorised Capital: Authorized capital or authorized shares are the maximum numbers of shares up to which a Company can issue to its shareholders.

 Registered Office: It is a mandatory requirement. A company must have a physical registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. 

Steps to register/incorporate a private limited company:

Step 1: Procure Digital Signatures (DSC) for proposed directors and subscribers in the company.

Step 2: Obtain Director Identification Number (DIN) for directors: It is a mandatory requirement for a person who will be acting as a director of the proposed company. Maximum 3 (Three) DIN can be applied at the time of incorporation.

If an applicant wants to incorporate Company with more than 3 Directors and more than 3 persons doesn’t have DIN. In such situation applicant have to incorporate Company with 3 Directors and have to appoint new directors later on after incorporation.

Step 3: Check the proposed name: 

The applicant shall check whether the proposed name is available or not. An applicant shall check the following prior to finalise the name of the proposed company:

a) Name of your company shall not violate the provisions mentioned under the Companies Act, 2013. 

b) Name shall be available. It means a company with a similar name cannot be registered with the ROC already.

c) A similar name shall not be registered as a trademark with Registrar of Trademarks. 

Step 4: Application for name reservation: In this process, one has to apply the proposed name for the company with the ROC. Name reservation application can be made separately or in one go at the time of submission of final incorporation documents with ROC. Whereas, it is highly recommended to reserve a name prior to file the supporting incorporation documents as this helps to minimise the risk of name rejection at the later date after the completion of all formalities.

Step 5: Drafting of Memorandum of Association (MOA) and Article of Association (AOA) of the proposed company. MOA is a document that regulates the company's external affairs and complements the articles of association which cover the company's internal constitution. These are the two most important document for any company.

Step 6: Preparation of documents for incorporation: After approval of the name, the applicant required to submit the below mentioned documents:

a) Memorandum of Association (need to submit in an electronic form)

b) Article of Association (need to submit in an electronic form)

e) Declaration by first Subscriber(s) and Director(s).

f) DIR-2- Declaration from first Directors along with Copy of Proof of Identity and residential address.

g) NOC from the owner of the property. 

h) Proof of Office address 

i) Copy of utility bill

j) In case of subscribers/ Director does not have a DIN, it is mandatory to attach: Proof of identity and residential address of the subscribers.

After completion of all the above mentioned formalities/documents, an applicant can file the final application for incorporation of an entity. After due verification and satisfaction of the Registrar, the concerned ROC may grant a Certificate of Incorporation.

Article By: Ms Bhavya Sharma, a Practising Company Secretary from Delhi. In case you need any assistance for company registration/incorporation, compliance, advisory services and related queries you can connect with us. You can contact us at legal@bhavyasharmaandassociates.com or for more details you can visit: www.bhavyasharmaandassociates.com

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