Incorporation Of Private Limited Company

Last Updated On: May 28, 2020, 9:15 p.m.
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INCORPORATION OF PRIVATE LIMITED COMPANY

Introduction:

As we are aware there are many types of companies which can be incorporated through our governing law, Private Limited Company is also one of them which is the most popular type of corporate legal entity in our country, as we all know Private limited company incorporation is governed by the Companies Act, 2013 read with the Companies Incorporation Rules, 2014, to register a private limited company a minimum of two shareholders along with two directors are required. company registration means registering an entity that is governed by company law. If you have to register a company first you have to register under the Ministry Of Corporate Affairs. Ministry of Corporate Affairs (MCA) has recently launched SPICE+ and AGILE-PRO (Incorporation Forms) to turn down the procedure

HOW TO REGISTER A PRIVATE LIMITED COMPANY:

1. Obtain a Digital Signature Certificate

     a. Digital Signature Certificate is the E-signatures of the Directors. It takes 2 days to obtain DSC.

     b.Obtain Director’s Identification number.

2. Director’s Identification Number is mandatory according to the amendment act of 2006.

     a. Every intending and existing directors need to acquire DIN.

     b.First file DIN (e-form) through the MCA portal.

     c.DIN 2 form lets the directors know about their DIN to the company.

     d.DIN 3 form intimates the Registrar of Corporate about the director's DIN.

     e.DIN 4 form is submitted if the director wants any change in his DIN.

     f.This process takes 1 day to be completed.

3. Filing new user registration or E-form.

     This is for having a registered account for e-form filling for different transactions.

4. Incorporating the company.

  • The final step of registering a company online is Incorporating company name, notice for appointment of managers, the appointment of secretary and company directors, office address.
  • This process takes 5 days to get completed.

Documents required for Incorporating a Private Limited Company:

    1. Proof of Address of Registered office: Lease Deed/ Rent Agreement/ Ownership document/ Non Objection Certificate (in              case ownership of the property is in blood relation)

    2. Copy of utility bills that should not be older than 2 months.

    3. Proof of Identity and Proof of residential address of the subscribers and Directors: PAN Card and Aadhar Card. (PAN Card is          mandatory in case of person is resident of India) 

    4. If any of the proposed Directors does not have a DIN at the time of filing the application proof of identity (Voter id card,              Passport or Driving Licence) and residential Proof (Bank, Electricity Bill, Telephone Bill or Mobile bill) is required.

    5. Consent from Directors in form DIR-2 is required.

    6. Passport size photograph of proposed directors (only in .jpg format and max. size is 100kb)

    7. Proof of appointment of Authorized Signatory for GSTN (letter of Authorisation, copy of the resolution passed by Managing          Committee or acceptance letter)

    8. Specimen Signature of Authorized Signatory

 

Key points for Incorporating A Private Limited Company:

1.Name Approval:

The first step to Incorporate a company is to find a name that is not similar to any existing company under MCA or similar to any trademark which is in existence. Through Incorporation form i.e SPICE+(Part A) we can apply for two names concurrently and the Filing fee for the same is Rs.1000 and if the applied name is rejected then only one resubmission is allowed for name approval by paying the same fee Rs.1000.

An alternative way to apply: We can also apply the whole registration procedure in one go in SPICE+ (by clicking on the button proceed for incorporation) without prior reservation of name but in this case, only one name is to be applied and before application, it should be taken care of that this name is available because in case the name is not available then the form will be rejected.

2.Preparation of the Main Object:

Filing the main object should be done parallel with the reservation of the name.

Preparing the main object is quite an analyzing task, we have to take care of all the ideas, proposed projects, and the work which is to be done by the proposed company. A pdf copy of the main object clause should be sent at the time of the name reservation.

3.Capital Structure of The Incorporating Company:

One of the important aspects of a company is that every business whether small or huge needs capital, at the time of planning a business we have to analyze how much capital is required, if we fail to estimate the required capital then the business may face the failure.

4.Authorized capital:

Authorized capital is the maximum amount of the capital for which shares can be issued by the Company to shareholders. It is mentioned in the Memorandum of Association of the Company under the head “Capital Clause”, it is wise to plan the necessary amount of Authorised Capital at the time of incorporation for our company although, we can increase it any time in future by filing the required form.

 Fee for filing of forms on MCA is based on the authorized share capital of the company, so we have decided the optimum amount of the capital structure.

5.Digital Signature Number:

As Indians, we can see in recent times everything is done in electronic form.

While Incorporating a company all the filing is also done in electronic form, we have to sign the form in digital mode only, for signing the prescribed form we should have Class-2 digital signature which is required for signing the e-forms of company incorporation.

6.Paid-up capital share:

 It is an amount of money for which shares of the Company were issued to the shareholders and payment has already been paid by the shareholders. Every important thing to keep in mind paid-up capital shall be less than or equal to .authorized share capital but it cannot be more than authorized share capital of the Company.

7.Registered Office:

The company is required to decide a certain place to carry or operate their business activities. The address of Registered office at the time of filing of SPICE+ Part B or a company can be established its place of registered office within the 15th day of approval of SPICE+ and shall also inform such address of registered office within 30 days of the incorporation via e-form INC-22 should be mentioned.

In case the Company establishes its registered office after incorporation then the correspondence address of the proposed company to be mentioned in the SPICE+ form at the time of incorporation and make sure that the correspondence address should be of the same state where the company is willing to have its registered office.

8.Director’s Identification Number:

The allotment of Director’s Identification Number is carried out by the Ministry of Corporate Affairs for any individual acting as a Director in the company. DIN is a unique number like PAN which is allotted and applied for a lifetime.

In case a director do not have DIN at the time of incorporation then he can apply DIN as well at the time of filing of form SPICE+ 

Only 3 Directors not having DIN can apply for DIN in SPICE+ Part B.

 Application for Certificate of Incorporation:

Once the reservation of the name for the proposed company is done,  shall proceed for making an application of Incorporation through the filing of SPICE+ Part B form which is digital-based form and it should be accompanied with SPICe_MOA, SPICe_AOA, AGILE- PRO and INC-9, where the other information is required to be filled in all the required details of director’s, subscriber’s details and other required details of the company.

The application is submitted by paying the requisite Stamp Duty as applicable in case of concerned state because payment of stamp is a state subject and we have to fill the other required details for application of PAN and TAN of the company which shall be duly submitted after affixing the DSC of directors and professional with MCA portal.

After uploading all the required forms, application for the incorporation is successfully submitted, and after processing of the application by the department the certificate of incorporation is issued by the authority. 

Frequently Asked Questions:

1) What is Company?

Ans: According to the Companies Act, 1956, a Company is an association of people which is formed and registered under this Act or any previous company laws. A company is a separate legal entity that is different from its shareholders. It is an important feature of the Company that there is a difference between people who have control over the affairs of a company and the people who actually own it.

 2)What is MOA and AOA?

Ans: MOA stands for Memorandum of Association whereas AOA means Articles of Association. Both these documents act as an important source of information for various shareholders and other stakeholders associated with a Company.

MOA reveals the name, aims, objectives, registered office address, the clause regarding limited liability, minimum paid-up capital and share capital of the Company. In short, it explains the relationship of a Company with the outside world.

AOAs are the necessary documents to be submitted when the company is incorporated with the Registrar of Companies (ROC). When AOAs are in conjunction with the MOA, they are called the Constitution of the Company

3) What is a DPIN?

Ans: The DPIN (Designated Partner Identification Number) used for identifying a designated partner in a Limited Liability Partnership (LLP) firm, is equivalent to the DIN (Director Identification Number) of a director of a private or public limited company. Both of these identifying numbers are issued by the Ministry of Corporate Affairs (MCA), Govt. of India.

4) How do I check whether my company is registered or not?

Ans: Following the below-given steps, you can check the status of the company registration.

Step 1: Go to the MCA website.

Step 2: Go to the ‘MCA Services’ tab. In the drop-down click on ‘View Company/LLP Master Data’.

Step 3: Enter the companies CIN. Enter the captcha code. Click on ‘Submit’.

5) What are the benefits of company formation in India?

Ans: Let’s see how Company formation puts you in an advantageous position.

1. It protects you from personal liability for business risks and losses.

2. It makes you look serious and attracts more customers.

3. It creates better image and credibility in the market.

4. Easier to get bank credit and investment from investors.

5. Creates faith in employees and easy to attract talented manpower.

6. It is very convenient to exit or sell the business, due to less documentation and cost.

6)Whether company registration in India is completely online? Do I need to submit my papers anywhere physically?

Ans: Yes, the Company Registration process in India is completely online. Today, company registration and other regulatory filings are paperless; documents are filed electronically through the MCA website and are processed at the Central Registration Centre (CRC), a dedicated back office for Company and LLP Registration process.

Upon completing all registration formalities, the Registrar of Companies issues a digitally signed Certificate of Incorporation (COI). Electronic certificates issued by the ministry can be verified by all stakeholders on the MCA website itself.

7) Is it mandatory for a company to keep its documents, records, registers, minutes, etc. in electronic form?

Ans: Yes, Rule 27 of Companies (Management & Administration) Rules 2014 says that A Listed Company or a Company having more than 1000 Shareholders shall maintain Records in Electronic Format. However, all the other companies are required to maintain statutory records in the form of registers, minutes, etc. throughout its life.

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