Introduction of Incorporation of Company in India
Starting a business can be an exciting experience for those who are new to the business fraternity. Everything needs to be specific and on point, from competitive analysis to prevailing legalities while underpinning the foundation of a new business. This article deals with the legal aspect and lets you know how to incorporate a company in India as per the Companies Act, 2013. Under the new Companies Act 2013, the Ministry of Corporate Affairs has mandated the procedure for the incorporation of companies in India. In this article, we will share the step-by-step process and information about the documents required for the incorporation of a company in India. There are two forms of companies: Private and Public. In this article, we will focus on private company incorporation, as per the new companies act 2013. Besides the documents required, we will also share PVT LTD Company Registration fees and director identification number meaning, which is confusing for new business owners.
A Private Limited Company is the most popular type of corporate legal entity in India. It is governed by the Companies Act, of 2013, and the Companies Incorporation Rules, of 2014. To register a private limited company, a minimum of two shareholders and two directors are required. A natural person can be both a director and shareholder, while a corporate legal entity can only be a shareholder. Further, foreign nationals, foreign corporate entities, or NRIs are allowed to be Directors and/or Shareholders of a Company with Foreign Direct Investment, making it the preferred choice of entity for foreign promoters. Several features of a private limited company like limited liability protection to shareholders, ability to raise equity funds, separate legal entity status, and perpetual existence make it the most recommended type of business entity for millions of small and medium-sized businesses that are family owned or professionally managed.
Steps to Incorporation of Company in India
Following is the detailed process to incorporate a company in India. Make sure to apply to follow this process without skipping any of the steps.
STEP 1: FIND A VIABLE BUSINESS STRUCTURE
Selecting the apt legal structure for your business commences with identifying your company’s goals and considering state and central laws. By defining your goals, you can opt for a legal structure that offers the best fit for your requirement. As your business evolves, you can change your business structure to fulfil your needs.
Typical parameters that need to be worked out while opting for a suitable business structure
· Management structure
· Scope of operation
· Level of compliances
· Ease of third-party funding for further expansion
· Following are the business structures available under the Company Act, 2013
OPC (One Person Company) (Suitable for businesses with smaller management hierarchy and one director who act as an owner)
Private limited company (Preferably one the most popular business structures in India)
Public limited company (preferred by large organisations)
STEP 2: COMPLETE THE PAPERWORK FORMALITIES
Once you have selected a suitable business structure, it’s time to arrange the mandatory paperwork. Following are the standard documents that are required to be uploaded on MCA’s portal during the incorporation process.
· Declaration by the directors as well as by the subscribers;
· A confirmation about the office address;
· Utility bills;
· A resolution issued by the global company (if necessary);
· Certificate of incorporation of the outer nation body corporate (If applicable);
· The interest of the directors from other organisations (if required);
· A recommendation conferred by the promotional company (if required);
· Nominee’s assent;
· Residential & identification proof of the applicants
· Identity proof as well as residential address of the nominees as well as subscribers;
· The declaration or resolution passed by the non-incorporated entities;
· Any other document [If required]
· Proof regarding the principal place of business;
· Evidence regarding the Authorised Signatory’s appointment for GSTIN;
· Copy of Resolution or Authorization letter passed by the BODs;
· Managing Committee & Acceptance Letter
· Specimen Signature of Authorised Signatory for EPFO
· Proof pertaining to Authorised Signatory’s identity for the opening of a bank account
DECLARATION OF DIRECTORS AND SUBSCRIBERS
The declaration in the form, viz INC-9 of the directors and subscribers, should be provided with the authority via digital mode. The applicant has to submit the recommendation affixed with a certificate approved by CA CS & Cost Accountant.
STEP 3: SECURE DIGITAL SIGNATURE CERTIFICATE, i.e. DSC
Digital Signature Certificates are the digital equivalent of paper or physical certificates. For example, physical documents are DL, passports, or membership cards. Documents serve as identification proof of an individual for a certain purpose; for instance, a DL specifies someone who can legally drive in a specific nation.
Similarly, a DSC can be presented digitally to prove one’s identity, access services or data on the internet, or e-sign specific documentation. One can secure DSC from MCA’s recommended agencies against requested paperwork and fees.
STEP 4: REGISTER PROPOSED BUSINESS NAME VIA PART A FORM OF SPICE+
The company incorporation process is initiated by filing the Spice+ form available on MCA’s website. It is a web-based integrated form that has been introduced by GOI in view of the initiative “ease of doing business” in Feb 2020.
This form entails two parts, i.e. Part A and Part B. Part A offers the service relating to name reservation which allows the applicant to register their proposed business name in a prompt duration.
PART B, ON THE OTHER HAND, FACILITATES THE SERVICES RELATING TO;
· Allotment of DIN
· Allotment of PAN and TAN
· Allotment of EPFO registration and ESIC registration
· Allotment of Profession Tax registration (Maharashtra)
· Particulars of Opening the Bank Account for the Company
· Allotment of GSTIN
STEP 5: FILE SPICE+ PART B FOR INCORPORATE A COMPANY
Next, down the Spice+ Part B form for filling the given forms:
· INC-9 and URC-1) and for affixing the “DSC,”
After filing the requested particulars along with the documents, the subsequent step is to submit the SPICE+Part B on the MCA portal. After submitting Part B, other forms (AGILE-PRO, SPICe+ MOA, & SPICe+ AOA) will also become available.
Besides, INC-9 shall be auto-prompted based on the particulars inserted in Part B of Spice +. After submitting these forms, the same can be downloaded, and DSC can be affixed accordingly. Finally, the said forms can be submitted in the order shown below.
1. SPICe+ Part B ,
2. SPICe+ MOA,
3. SPICe+ AOA,
4. AGILE-PRO, INC-9.
STEP 6: CONDUCT PRE-SCRUTINY CHECK
After uploading the said forms, use the option called ‘Pre-scrutiny’ check located at the bottom of the form. After this, the applicant must tap on the Confirmation tab for the successful submission of the e-form. After this, a Service Request Number, i.e. SRN, shall be generated by the portal for submitting fee for incorporation.
STEP 7: VERIFICATION OF DOCUMENTS AND ISSUANCE OF REGISTRATION BY REGISTRAR
In this step, MCA shall conduct the verification of the documents for flaws identification. The Registrar shall grant the COI, i.e. Certificate of Identification, in case of successful incorporation.
STEPS TO INCORPORATE A COMPANY IN DELHI
If we talk about the proper company then it’s also called the Private Limited Company Registration in Delhi. Pvt ltd company in delhi is a little bit expensive as compared to above sole proprietorship firm. you can checkout the below to register a private limited company in Delhi –
Step 1 : First of all before register a private limited company in delhi we have to complete following requirements – :
- Required minimum 2 Shareholders and 2 Directors.
- Directors and Shareholders can be the same.
- Pan Card, Voter id or Aadhar Card with Bank Statement Copy or any utility bills copy like electricity bill copy of the directors.
- Business Premise address proof like rent agreement or utility bills copy or sale deed copy etc.
If you don’t have any partner in your business then you can register with any family member in delhi state. It’s a company with limited liability in the business so your family member is secure. Every company shall have at least one director on its board of directors, who has stayed in India for a total period of not less than one hundred and eighty-two (182) days in the previous calendar year.
Step 2 : Now in the 2nd step we have to apply for the Director identification Number(DIN) in Delhi MCA Regional office but it’s completely online through government of India MCA Portal.
Director Identification Number is like a Code which is provided by the ministry of corporate affairs. It’s required by every director or person who wants to become the director in a company.
Step 3 : Now in the 3rd step we have to register Digital Signature Certification(DSC) for the directors. Digital signature has been prepared by the third parties companies which is authorised by the government of India. in that some companies are like Emudra, Sify, NCode Solutions & many other companies.
Digital Signature Certificate (DSC) is like an electronic signature which is used for the filings government EForms.In Simple words it’s like USB Tokens with a prefix file so you can attach your signature on the company registration eforms. It’s used only for the Filings Forms so as a security purpose this can not be used for any other money or banking related transactions.
Step 4 : Now in the 4th Step we have to search the company name on MCA Portal. Before choosing any name we have to give them at least 4 to 5 names in the application form. Read here guidelines on checking company names in India. After receiving the application for the Name Approval Delhi MCA Regional office checkout their availability as per the guidelines.
In Delhi once a Private Limited Company Name is registered then no one other company or llp can register the same or identical word name.
Step 5 : Now in the 5th Step we have to draft the MOA and AOA of the Company.Both are important documents regarding company registration. MOA and AOA are documents where a company’s internal rules and regulations are mentioned.
MOA(Memorandum of Association) and AOA(Associates of Articles) are well drafted and as per the new companies act 2015. you can download the Format of MOA and AOA Here
Step 6 : Now in 6th step we have to file forms to ROC Delhi regional office on MCA Website like Form INC-7, INC-22,DIR-12 which are final forms for the company registration in delhi state.
Step 7 : Seven steps are for the Paying ROC Stamp Duty. We have to pay the fees of ROC Delhi on MCA Portal online through the Debit/credit/net banking and generate the challans.
Stamp Duty is state wise. You can Checkout Here Complete Fee of the Company Registration in Delhi State
Step 8 : Eight steps regarding the confirmation or verifying the things. ROC Delhi regional office checks all the eforms and support documents which we filed and if we have any issue then they give us a return for the resubmission.
ROC Delhi Regional office takes minimum 5-6 Days for Verifying the things. If you file through INC29 then it takes minimum time for the verify things because in that you completed all the above steps in One Shot manner.
Step 9 : Ninth Step regarding the final step on the part of delhi regional roc office. They issued a final certificate of incorporation in electronic mode which you got by email.
Certification of Incorporation(CIN) is used by the government organisation or banks or any other purpose where anyone asks for the certification so you can give them this final certification. It’s used by the banks also for opening a current bank account on your company name.
Step 10 : Tenth Step that is the final step for running your business. Now you have to apply for the Pan Number on the name of the company. Pan Number is required which is allotted by the Income tax department. you can apply through the NSDL Govt official Website.
Pan Number is a mandatory thing but when you apply for the Pan then you can apply for the TAN Number also which is required in some cases when you hire any employees and want to deduct the TDS.
Hope this quick guide is helpful to you regarding registering a Company in Delhi State. We recommend to all delhi entrepreneurs to always hire a good professional to incorporate your own company because it is required to digitally attested documents from the CA/CS/Lawyer during the incorporation. Some Helpful Resources –
- Firm Registration in Delhi State
- LLP Registration in Delhi State
DOCUMENTS REQUIRED FOR COMPANY REGISTRATION IN DELHI
If you want to register a company in delhi then its required the basic documents with the ID & Address Proof for the same. below are some checklist –
- Pan Card Copy of the Applicant
- Aadhar Card Copy of the Applicant
- Firm Address Proof like electricity bill copy
- If Firm address is on rent then its required the rent agreement or Electricity Bill with the NOC.
COMPANY REGISTRATION CONSULTANT IN DELHI
So as mentioned above Company Registration in Delhi is not easy, it’s always required the professional help from CA or Lawyer etc. There are various online platforms to get done to register a company in delhi but you have to always choose a trusted company registration consultant.
You can choose on the below factors –
- Past Social media reviews where you can check the original reviews of the consultant.
- Compare the Pricing of the Company Registration with the Government. Delhi Government is the same for any type of registration but you have to compare the professional fee.
- Reliable Consultancy because sometimes you are misguided and forced to choose only the pvt ltd company registration in delhi by ignoring simple sole proprietorship firms.
CHECKLIST OF UPLOADING/SUBMITTING SPICE+ FORM TO INCORPORATE A COMPANY
1. The version of PDF should not be dated
2. Form must enclose the signature of Directors
3. Digital signatures are verified
4. Keep the Disqualified Directors out of the equation
5. Upload the requested documents in the prescribed file format and size
6. Attachments should be free from legibility issues
7. Signature should not be in copy-paste format
THE FOLLOWING DOCUMENTS ARE REQUIRED TO BE EXECUTED (SIGNED) BEFORE THEY ARE SUBMITTED TO THE REGISTRAR FOR INCORPORATION OF THE COMPANY:-
- MOA and AOA – These are required to be executed by the promoters in their own hand in the presence of a witness in quadruplicate stating their full name, father’s name, residential address, occupation, number of shares subscribed for, etc.
- Other Incorporation Documents such as Form INC 8, Form INC 9, various Declaration and consent to act as director, Power of Attorney etc
ONE PERSON COMPANY (OPC)
One person Company (OPC) is a legitimate way to form a company with only one member & Director. OPC can work like Proprietorship but it holds the status of company and of course enjoys the benefits that comes with it (limited liability, trust factor, least compliances etc, However, privilege of incorporation of OPC is available only to the Indian Residents.
PVT LIMITED COMPANY REGISTRATION FEES
Pvt. Ltd. company registration cost is zero if the company is small. In 2019, the Govt of India waived off the registration fees for new companies which are incorporated under the private limited category.
This waiver of registration fees is applicable only for those private limited companies whose authorised capital is less than Rs 15 lakh. Only stamp duty needs to be paid in such a case. However, such small companies availing fee waivers for registration cannot raise any capital till one year.
Registration fees for a private limited company with more than Rs 15 lakh capital and less than Rs 50 lakh capital are Rs 2000. If it’s not a small company, then registration fees are Rs 36,000.
Don’t get overwhelmed when it comes to understanding the procedure for the incorporation of a company in India! We at Legaltax are here to provide you with expert guidance and mentorship.
INCORPORATION OF COMPANY:
Under the existing Indian Rules & Regulations, a person can incorporate :
1. Private Limited Company
2. Public Limited Company
3. One Person Company (OPC)
WHAT IS A PUBLIC LIMITED COMPANY?
A Public Limited Company is a Company limited by shares. In this case, there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager/Officer of such a Company remains unlimited under certain circumstances. The minimum number of shareholders required is 7 (Seven). The Company must have 3 directors and one of them should be resident of India.
ADVANTAGES OF A LIMITED COMPANY
It has following advantages:
- Members’ (shareholders) financial liability confined to the amount of money they have not paid for shares subscribed/purchased by them.
- Easy to appoint, retire or remove directors or any other officer of the company under the Companies Act, 2013.
- The shareholders can contribute additional share capital or unsecured loan for business requirements from time to time.
- It is simple to admit a business partner in the company by way of offering shares to the incoming partner of the company.
- The death, bankruptcy of one member does not affect the company’s ability to trade.
- Easy to dispose of or part with the whole or part of business of the company without disturbing ongoing business.
- Financial Institutions are more comfortable with the corporate clients.
- Corporate status
- Enjoying greater degree of confidence and trust by the public at large and Government Agencies.
DISADVANTAGES OF A LIMITED COMPANY
It has the following disadvantages:
- Financial details of the company are publicly available on the Government website.
- The competitor/revival can watch technical development of the company as the same are available on public domain.
- Regular and time consuming compliances under various statutes especially applicable to public limited companies whether it is closely held or widely held company.
- Heavy penalties for non compliance or failure to comply timely.
- Overall cost of maintaining a corporate structure is heavy.
- Professional and legal advice is needed on day to day working.
- The advantages of limited liability of the directors remains on the paper as the Financial Institutions and the Vendors invariably insist on personal guarantee before entering into any business commitment with the company.
WHAT IS A PRIVATE LIMITED COMPANY?
A Private Limited Company is the most common and popular format of legal entity in India. It can have a minimum of two and a maximum of 200 (Two Hundred) shareholders. It cannot invite the public to subscribe to its shares or debentures. Further, the shares of a Private Limited Company are not freely transferable under the Companies Act, 2013. The liability of each shareholder is limited to the extent of the unpaid amount of the shares’ face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager/Officer of such a Company remains unlimited under certain circumstances. The company needs to have a minimum of two directors and can have a maximum of fifteen directors. One of the directors of the company must be Resident in India.
One person Company (OPC) is a legitimate way to form a company with only one member & Director. OPC can work like a Proprietorship but it holds the status of the company and of course enjoys the benefits that comes with it (limited liability, trust factor, least compliance, etc, However, the privilege of incorporation of OPC is available only to Indian Residents.
Company Registration Package @8000/- INR
- 2 Director Digital Signature
- 2 Director Identification Number
- Name Approval of the Company
- MOA & AOA of the Company
- Certificate of Incorporation of the Company
- PAN & TAN of the Company
- Free 10+ Premium Legal Agreements for your Bus
- MSME Registration Certificate
Hopefully, now you have learned how to incorporate a company in India, but do not forget to get familiar with post-incorporation compliances, or else you may confront severe penalties. The Companies Act, 2013 has laid down various post-incorporation compliances for different companies that function under its ambit. If you seek end-to-end assistance regarding the same, then let Legaltax professionals help you out.
Why Choose Legaltax for Incorporation of Company?
- One of the best assistance
- Quick and easy processing by the expert.
- The process is done in a short period of time
- Less fee compared to other firms.
- How to file GST Return online in India 2023
- Filing Amendments in Core and Non-Core Fields under GST registration
- Trademark class 1 – for mainly chemical products used in industry, science, and agriculture
- Details Related to Judgement on Facebook v/s Facebake and Facecake
- Trademark Class 8 – For Hand Tools and Implements