Company Registration Procedure in India

Posted by Enterslice on December 29th, 2017

When an Indian or foreign resident wants to start their business in India, then it can be set -up fulfilling certain mandatory requirements in India. Especially, in case of foreign residents, it is important for them to pay extra attention at the time of choosing its right kind of business or corporate entity as per their motive along with the tax planning and liability issues.

Both Indian and foreign promoter can set- up their business in the form of following entities:

1. Private Limited Company - It is a most popular form of business entity even among foreign investors. To set-up Private Limited, we need minimum 2 directors, minimum two and maximum 200 shareholders that can be natural persons or companies. The minimum paid-up capital should be of Rs. 1, 00, 000. For starting this business we need, company registration certificate from the registrar of companies.
2. Public Limited Company- It is also one of the forms of setting-up of business. For starting as a public limited company, we need minimum 3 directors, at least seven members without any maximum limit and paid-up capital should be of Rs.5 Lacs. In case of a public limited company, we need not only Company Registration certificate from registrar but also in addition to it the certificate of commencement of business.
3. One-person Company-In earlier act this concept was not there, but as per companies Act, 2013 an individual can start its business in the form of one-person company. It is just like Private Company for all legal purposes. It appears as Sole-Proprietorship, as its liability towards debtors is limited only to the shareholding of the company.
4. Section-8 Company – If want to start a business, not for profit purpose but only to promote arts, commerce, science, education, research or for any other purpose related to social welfare. Then it can be started by getting registered as Section - 8 Company under the Companies Act.

Procedure for the Company Registration:

The foremost requirement for all types of companies is to acquire Digital Signature of all the directors and subscribers to the memorandum. Next step is to obtain DIN of directors by filling DIR-3. It is a unique identification number, given by the Ministry to the persons who are acting as a director in the company.

After the completion of the above two requirements, the Promoters of the Company can file an application in form INC-1 in which maximum six names, can be filled in order to their preference for the reservation of name of the proposed company. Once the name gets approved, then it became reserved for the company for 60 days within which, they have to apply for the Company Registration otherwise, it can be withdrawn by the Ministry. Once the name gets approved, then Promoters has to apply for Certificate of Incorporation by filling spice form which is accompanied by Spice MOA and Spice AOA along with necessary attachments as prescribed in it. While submitting these forms, Promoters has to pay stamp duty as applicable according to the case of concerned state on the portal. Once the application is filled then PAN and TAN form will be generated online, that has to be submitted while affixing DSC on MCA.

Once the form has been filled, a Certificate of Incorporation is granted by the registrar of companies, after the verification of all the documents. Once the COI is granted, then the company can start its business activity as it’s a proof of the existence of the company. Hence, its incorporation process is completed. Whereas in case of OPC all procedure is same only, in addition to it a nominee consent is required in form INC-3.

Whereas, the procedure of Section - 8 Company Registration slightly differs. After name approval process, the promoters have to apply for the issuance of a license in Form INC-12 along with the documents prescribed in form. Once form gets to approve, the license is issued in form INC-16. After getting a license, application for incorporation is filled in Form INC-7, DIR-12, and INC-22 along with the documents prescribed. Once the Registrar is satisfied with the forms, Certificate of Incorporation is issued.

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