COMPANY REGISTRATION IN INDIA - A SUMMARIZE EXEMPLAR
Out of the various corporate structures in India; business in company form is most common & it can be registered in many ways.
Company Registration in India
Out of the various corporate structures in India; business in the form of a company is most common. A Company is registered under the Companies Act, 2013 and it has a legal identity on its own. A Company can be registered in many ways. The registration process of the companies is supervised by the ROC office which operates under the umbrella of Ministry of Corporate Affairs, India.
Ministry of Corporate Affairs has its guidelines for the company registration and by following these guidelines it becomes quite easy for anyone to apply for company registration. The ministry has further simplified the process of registration and introduced an online integrated Web Form known as SPICe+ along with AGILE-PRO, eMoA, eAoA, URC1, INC-9 (as applicable). The entire process of company registration takes 10 to 12 working days depending upon the approval by the designated authority and you are done with the company registration process.
Before going into the details of registration process it is necessary to get a brief overview about the various types of company structure in India.
Various Types of Company
Selection of the correct type of company before its registration is the most important aspect of the whole process. We should be well aware of the various types of the company structures which exist in India to go to the next step of the company registration. This selection mainly depends on two factors:
- The requirement of your business
- Available resources
There are various types of companies which can be registered with Ministry of Corporate Affairs, India as per the present Companies Act, 2013; which are-
One person company (OPC)
This type has recently came into the force in 2013 which enables company formation in case of a sole promoter or owner. Registration process is not tedious and requires minimal documentation.
Private Limited Company
This type of company can be formed with minimum of 2 shareholders and 2 directors. The limit of members cannot exceed 200. In this Company, general public cannot subscribe the shares of the Company. It has restricted the rights to transfer its shares. Every single individual is considered as an employee of the Private Limited Company. Audit is mandatory in Private Limited Company.
Public Limited Company
The Public Limited Company can be incorporated with minimum of 3 Directors and 7 members or shareholders. No restriction on the number of members. This type has a voluntary association in which members liability is related to the shares possessed. Audit is mandatory in Public Limited Company.
Section 8 Company (NGO)
Registration under Section 8 of the companies act 2013 which mainly includes non-profit organizations.
It is generally formed to do Social welfare activity.
Nidhi Company Registration
It operates in Indian non-banking finance sector and it is recognized under Section 406 of Companies Act, 2013. This type of company mainly deals in money lending and borrowing amongst its members.
Producer Company Registration
This type of company consists of farmers/agriculturists with the main objective of production, procurement, harvesting, pooling, grading, handling, marketing, selling or export on behalf of the members.
Once a company gets registered in India, it uses the words such as "Private Limited" or “(P)Ltd” or “ltd” in the end of its name .These words represent the type of company which has been registered in its due process. eg “pvt ltd” is used by a company which is registered as a Private Limited.
REQUIREMENTS FOR ONLINE REGISTRATION OF A COMPANY
Digital Signature Certificate (DSC)
Digital Signature Certificate (DSC) is an integral part for online registration of company. The online registration requires electronically signed application forms and digital signature certificate (DSC) is required to sign those documents electronically. These documents mainly include Memorandum of Association (MOA), Article of Association (AOA) and other relevant registration documents.
Digital signature certificate (DSC) which comes in the form of a pen drive can be obtained from an authorized agent by the submission of valid photo ID, address proof, a photograph along with the application form.
Verification of mobile number, email ID and uploading of a video clip for your identification constitute another important aspect of digital signature certificate (DSC) registration.
It is mandatory for the Subscriber and Directors to obtain Digital signature certificate. It is important here to keep in mind that if the subscribers are going to be the directors of the company then separate DSCs are not required.
DSC can be obtained from following organizations:-
- E- Mudhra
DSC has various classes but for company registration Class 2 DSC is required.
Director Identification Number (DIN)
The Director who wish to get appointed as the Director of the Company is required to obtain DIN number. The same can be applied at the time of incorporation via SPICe+ Web Form as directed by the MCA. The Director who already holds the DIN number have to provide the details of the DIN at the time of Incorporation.
Name of the Company
The name of the Company has to be unique and should not be matched with any of the existing Company’s name.
Object of the Company
The object of the Company should be provided at the time of incorporation. The object of the company indicates the type of business activity the company is going to operate.
Certification of Professionals
Certification of Professionals such as as company secretary, chartered accountant, cost accountant, etc are required at the time of incorporation of the Company
Proof of Registered office
Proof of the registered office of the Company such as Rent agreement, Tax Receipt, Lease agreement, Utility bill etc. are required to form the Company.
Identity and Address Proof of Directors and Subscribers
The Directors and subscribers have to provide the Identity and address proof such as PAN Card, Aadhaar Card, Voter Id Card, Bank Statement, Passport etc. for the formation of the Company. If the Member or the Director is a Foreign National or NRI copy of Passport is required that should be apostilled or notarized.
The Director who wish to get appointed as the Director of the Company have to provide the consent to act as Director in Form DIR 2.
PROCEDURE FOR ONLINE REGISTRATION OF A COMPANY
Applying For Company Name
Another major aspect of the company registration process is the selection of the name of the company .This selection has to be done prior to the company's operation. The Ministry of Corporate Affairs, India has updated its existing forms with a web form known as SPICe + (pronounced as SPICe Plus).The part A of this web form is meant to be used for company name reservation.
You are required to apply for a desired name of the company. You may give options for these names on the priority basis ; although it is not mandatory to give two options in every case. If you are hundred percent sure that the desired name which you are opting for, will be approved then there is no need to give priority options .But it is always safer to give options to avoid any future complications. You should also check online for the desired name availability of the company before applying for its registration. In case your application gets rejected ; you will be provided another opportunity for the re-submission of the application.
In case you already have a trademark of the brand name chosed for company registration then additional document i,e trademark registration certificate is also required as a valid proof. This vital step of the registration process generally takes 2 to 3 working days for the approval and once it gets done the next step for the company registration will begin.
Drafting of Essential Documents (MOA, AOA and other legal documents)
Once the name approval of the company is done the next step in the company registration procedure is the drafting of important documents namely
-Memorandum of Association (MOA)
-Article of Association (AOA)
Memorandum of Association or MOA will be having following major constituents:
1) Main objective of the company registration
2) Name of the registered entity
3) Address of the registered office
4) Authorised share capital
6) Information of the first shareholder and numbers of the shares allotted to them
The object clause of Memorandum of Association is its soul. It denotes the objectives behind the formation of the company. It indicates the nature of the business which you are going to run .Moreover you cannot perform any other business if it is not mentioned there in the object clause of MOA. However, main objects can be amended at any point of time by filing the required forms.
When it comes to the rules and regulations through which the company will be run ; Article of Association or AOA comes into the play. It is the bye-laws of your company which creates a legal framework for the directors and other officers to perform their duties.
These two documents are very important in the process of company registration and the same should be drafted with extreme caution with the help of an expert like Chartered Accountant or Company Secretary.
Depending on the type of company which is being registered ; few other documents will also be required apart from MOA and AOA.
Company's shareholders are required to mention their name, address and occupation on the last page of Memorandum of Association and Article of Association . While applying online for company registration these documents need to be signed through Digital Signature Certificate (DSC) of the respective subscribers and the Chartered Accountant or Company Secretary of the proposed company.
Filing and Uploading of Essential Forms
With everything in place with the previous steps, you are now fully prepared to proceed on to the final step in the company registration procedure.
Next step involves the PART B, here you have to submit the SPICe+ form along with eMOA, eAOA and AGILE PRO to MCA.
AGILE Pro web form (Stands for Application for Goods and services identification number, employees’ state Insurance corporation registration plus Employees’ provident fund organization registration)
Along with the uploading of these documents you need to pay a prescribed fees. You will be notified within 3 to 5 working days on the successful incorporation of your company. Your incorporation certificate along with PAN and TAN will be delivered to your mail inbox.
Ministry of corporate affairs issues a unique director identification number or DIN to all the existing directors.
- Application of EPFO, ESIC, Profession Tax registration(Maharashtra), Opening of Bank Account for the Company is mandatory.
- Declaration by all Subscribers and first Directors in INC-9 shall be auto-generated in pdf format and will have to submit it only in Electronic form in all cases, except if the limit number of subscriber or directors increases and/or any such subscribers and/or directors has neither DIN nor PAN.
- Allotment of GSTIN, if applied.
Post Incorporation Process
There are various procedure to follow once the Company gets registered and they are as follows:
- The Company must get its company name, registered office address and the Corporate Identity Number alongside phone number, email id, fax number (if any), and website (if any), printed on letter head and on all the official documents as required. The name plate along with the address of the Company should be fixed at the gate of the Company office.
- To obtain certificate of Commencement of Business by filing form INC 20A within 180 days from the date of incorporation
- The Board of Directors of the Company must appoint the first auditor within 30 days of Incorporation. In case the Board fails to appoint the auditor, then an EGM shall be called within 90 days to appoint the first auditor.