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Company Formation in India
Company Formation in India
Foreign Branch Office Registration
Foreign Liasion office Registration
Limited Liability partnership
A Private Limited Company must have a minimum paid-up capital of INR 100,000 and a Public Limited Company must have a minimum paid-up capital of INR 500,000. A Private Limited Company must have a minimum of two directors and two shareholders and Public Limited Company must have a minimum of three directors and seven shareholders.
The directors must have a valid Director Identification Number (DIN), allotted by the Ministry of Corporate Affairs. DIN is a unique identification number for an existing director or a person intending to become a director of a company. DIN has become mandatory for all the directors. DIN is unique and specific to an individual therefore only one DIN is allotted per individual even if the individual serves as director at multiple companies. Time taken for granting of DIN is approximately 3 to 5 working days.
Preferred legal entity by foreigners in incorporation of a Private Limited company and every person desirous of forming a Private Limited company in India needs to comply with specific steps. The procedure of formation company is mentioned in brief belows:-
Selection of the Company:-
The promoters has to decide about the formation of a Private Limited company/ Public Limited Company or Limited Liability Partnership depending on the operation and an activity of the company, capital required, size of operations, methods and amount of financing.
At least one of the directors should have a valid Digital Signature Certificate issued by the Certifying Authorities (CA) and approved by the Ministry of Corporate Affairs. The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in an electronic forms, in order to ensure the security and authenticity of the documents filed electronically. Every document prescribed under the Companies Act, 1956, is required to be filed with the digital signature of the managing director or director or manager or secretary of the company. Therefore at least one of directors must have a digital signature. Digital Signatures can be obtained within 3-5 Days.
The laws relating to registration of a limited liability company in India is contained in Companies Act, 1956 and Companies Act, 2013. Registrars of Companies (ROC), appointed by the Ministry of Corporate Affairs (MCA), is vested with the primary duty of registering companies and of ensuring that such companies comply with the statutory requirements of the Act. A company can be registered with the ROC of the state under whose jurisdiction the proposed company’s registered office will be situated.
The first step in the process of formation is the application to MCA for approval of the desired name for the proposed company. Once, Company name is allotted, company registration documents are filed with the respective ROC for registration.
The following particulars are required to complete the form
1) Name of the proposed company
2) Location of registered office of the proposed company
3) Main Objectives of the business of the company
4) Names of Subscribers to the Memorandum of Association
5) Proposed Authorized Share Capital of the Company
6) DIN & DSC
Ensure that the company name is in accordance to the guidelines of the MCA, and also ensure the name is unique and does not resemble the name of any existing company in India. The company name must end with the words ‘Private Limited’ or ‘PVT Ltd’. Proposed name should fulfil Company Name Approval Guidelines issue by the MCA.
The Registrar shall intimate, within two to three days, whether the proposed name is available or not. If the preferred name is not available apply for a fresh name on the same application. The name made available by the Registrar shall be valid for a period of two months.
After obtaining the name approval from the ROC the following documents must be prepared to incorporate the company
1) Memorandum of Association (MOA)
2) Articles of Association (AOA)
3) Form 1 – providing details of promoters of the company
4) Form 18 – providing details of registered office of the company
5) Form 32 – providing details Directors of the company
The Memorandum of Association is a document that sets out the constitution of the company. It contains, amongst others, the objectives and the scope of activity of the company and also describes the relationship of the company with the outside world.
The Articles of Association contain the governing rules and regulations of the company for the management of its internal affairs. While the Memorandum specifies the objectives and purposes for which the Company has been formed, the Articles lay down the rules and regulations for achieving those objectives and purposes. It also states the authorized share capital of the proposed company and the names of its first / permanent directors.
Professional help is to be sought in the drafting of the MOA and AOA, as it contains the governing policies, rules and by-laws of the proposed venture. The draft must be carefully vetted by the promoters before printing and stamping.
The MOA and AOA must be signed by the subscribers in his own hand, along with father’s name, occupation, address and the number of shares subscribed for and witnessed by at least one person.
Then the MOA and AOA are required to be stamped & filed with the ROC. A stamp duty is required to be paid on the MOA and on the AOA. The stamp duty depends on the authorized share capital and varies between various States in India. Details of applicable stamp duty can be obtained from the website of MCA www.mca.gov.in, eStamping facility is now available via MCAportal. The document preparation process may take five to seven days.
Submit the following documents to the ROC with the prescribed filing fee and the registration fee:
1) The stamped and signed Memorandum and Articles of Association
2) Form-1, 18 & 32
3) Declaration of Compliance by an advocate or company secretary or chartered accountant or director, manager or secretary of the company
4) Power of Attorney authorizing a person, on behalf of subscribers, any documents and papers filed for registration. The power of attorney
should be given
5) Registerd office address proof
The fees payable to the Registrar at the time of registration of a new company varies according to the authorized capital of a company proposed to be registered.
The ROC will issue a Certificate of Incorporation after careful review of documents submitted. Section 34(1) cast an obligation on the Registrar to issue a Certificate of Incorporation. A Private Limited Company can start its business immediately on receiving the Certificate of Incorporation.
>> Pre- Registration Requirements
>> Name Approval
>> Preparation of Documents
>> Submission of Documents
>> Payment of Registration Fees
>> Obtaining Certificate of Incorporation