company registration process and formalities
- 2. Definition ▶ Companies Act, 2013, defines the term ‘Company’ as follows: “Company means a company incorporated under this Act or under any previous company law.”
- 3. Introduction In India, there are about 7 lacks registered companies and every month thousands of firms apply for registration. Under the ministry of corporate affairs, every company is to be registered by the registrar of companies for the state. This act maintains two types of companies called private and public companies. The ‘Limited’ is the most commonly used corporate form at the end of the company name.
- 4. Two choices during company registration: ▶ Private company: Company, whose shares may not be offered to the public for sale and which operates under legal requirements less strict than those for a public company. ▶ Public company: Company, whose shares are traded freely on a stock exchange.
- 5. Differences Private company Public company Minimum number of Board members Two Seven Number of members Maximum only 50 members Any number of members Starts its business As soon as its in cooperated. Until it receives business commencement certificate. Sells its shares Shouldn’t sell it’s shares to anyone or shouldn’t make any invitation to people Can invite people to buy its shares Number of directors Two Three Differences between Private and Public companies
- 6. Steps for registering a company in India Step 1: Acquire Director Identification Number(DIN). Step 2: Acquire Digital Signature Certificate(DSC). Step 3: Create a account on MCA Portal – New user registration. Step 4: Apply for the company to be registered
- 7. Step 1: Acquire Director Identification Number(DIN):- Each director of the company should obtain their identification number. As per the Amendment act 2006, acquiring a DIN is compulsory for every director. To get DIN one need to file a eForm DIN-1. The form is available on Official site of the ministry of corporate affairs. Register yourself on MCA Website first and have a login id. After filling DIN-1 Form, one should upload the filled form by clicking to eForm upload button on MCA website and should pay applicable fees. Then company should intimate the Registrar of Corporates(ROC) about all director’s DIN through DIN-3 Form.
- 8. Step 2: Acquire Digital Signature Certificate(DSC) To ensure the security or authenticity of documents filed electronically the Information act, demands a valid digital signature on the documents. The digital signature certificate should be acquired by only those agencies which are appointed by the controller of certification agencies (CCA). One should not use Digital signature certificate (DSC) given by any other agency which is not approved and it’s illegal to use others DSC as yours or the false one. If you already have a digital signature then you can use the same.But,check for your digital signature validity, agencies issue DSC’s with one or two year validity after expiry you have to renew it. One can acquire his/her Digital Signature certificates from these government listed agencies like TCS, IDBRT, MTNL, SAFESCRYPT, NIC, nCODE Solutions etc.
- 9. Step 3: Create a account on MCA Portal – New user registration Its about having a registered user account on MCA Portal for filing a eForm, for online fee payment, for different transactions as registered and business user. Creating an account is totally free of cost. To register yourself on the MCA portal, click on the register link.
- 10. Step 4: Apply for the company to be registered ▶ This is the final major step in a registration of your company which includes incorporating company name, Registering the office address or notice of situation of office and notice for appointment of company directors, manager and secretary. And also regarding the take and pay for their qualification shares.
- 11. Types of Forms ▶ Form-1A: Application form for availability or change of a company name. Once you apply for new company name, the MCA will suggest four different form of your company name; you have to choose one among them. To do the same you have you have to fill Form-1A and submit. ▶ Form-1: This is for application or declaration for incorporation of a company, in this form you have to fill the same name which you have chosen during application of form-1A. ▶ Form-18:This form is for notice of the situation of a new company office or change of situation of previously registered office.
- 12. Form-32: ▶ For a new company, this form is for notice for appointment of new Directors, Managers and Secretary. ▶ For an existing company, this form is for a change of directors, Manger, Secretary or company head. ▶ After submitting these forms, once the application has been approved by MCA, you will receive a confirmation email regarding the application for incorporation of a new company, and the status of the form will get changed to Approved.
- 13. Detailed procedure for approval of the proposed company name: ▶ For obtaining name for your new company, An application in Form-1A needs to be filed with the Registrar of Companies (ROC) of the state in which the Registered Office of the proposed Company is to be situated to ascertain the availability of a name along with an official service fee of Rs.500/-. ▶ You have to provide four alternative names for the proposed company. Your company name shall not resemble the name of any other company already registered or violate the provisions according to Act, 1950.
- 14. ▶ In this form you have to fill name and addresses of directors (minimum 2 for a private company and 7 for a public company). You have to mention main objects of the company and authorized capital. ▶ In about 10 days, the ROC will inform you about approval or objections. If there are any objections then ROC will suggest you with some available names and let you choose among them. If your company name is approved then you will receive a formal letter regarding the confirmation of the same. Keep the same which will be required during registration process of the proposed company.
- 15. Documents required before submission DIN of all those directors of a proposed company. DSC – Digital Signature Certificate Original copy the of formal letter issued by ROC regarding availability of Company name. Form-1 for incorporation of a company. Form-18 for situation or address of the proposed company. Form-32 for particulars of proposed directors, managers and secretary.
- 16. Formalities to be followed while incorporation of a company: Obtain a TAN card Obtain a Permanent account number (PAN) from income tax dept. India If required: Documents obeying shop and establishment acts. If required: For foreign trade, Registration documents of import export code from Director General of foreign trade. If required: Registration documents of Software technologies Parks of India (STPI). If required: RBI approval for foreign companies investing in India and FIPB approval. Both Indian and foreign directors need to have valid Digital Signature Certificates from authorized agencies.