What is the procedure for Incorporation of Company in India?
Know the Step by Step Process
Under the New Companies Act 2013, the Ministry of Corporate Affairs has mandated the procedure for the incorporation of company in India.
In this article, we will discuss the step-by-step process and required documents for the incorporation of company in India.
There are two sectors of companies i.e. Public and Private.
In this article, we will emphasis on private company incorporation, as per the new Companies Act 2013.
Besides the required documents, we will also discuss about private limited company registration fees and director’s identification number meaning, which is baffling for new business owners.
Step by Step Process for Incorporation of Company in India
Step 1: Reservation of Company’s Name Under RUN or Spice
The initial and prime footstep in the company registration process is preserving the name of the company.
There are two methods to do this: RUN and Spice. RUN or Reserve Unique Name is a online form on the website of the Ministry of Corporate Affairs, wherein aspirants can checked if their new company name is existing or not and then can apply for a required name for the company.
The aspirants must provide two names in privileged order and then must follow all the norms of the naming convention.
Once MCA approves a company name, it’s reserved for 20 days within which the applicant must complete all the residual steps vital for company registration. You may visit the RUN web service by the Ministry of Corporate Affairs.
Ministry of Corporate Affairs checks three major factors while approving the company name:
By filling of the Spice-32 form is another way to settle the name, but you can opt only one option and if, it’s rejected, you will need to do again all documentation.
The applicant must also decide the names of the Directors of the company. In a private limited company, at least two names of the Directors are to be provided.
Step 2: Procuring Digital Signature Certificate
After the company name has been approved by Ministry of Corporate Affairs and registered, then the next step is procuring a Digital Signature Certificate of your private limited company.
Digital Signature Certificate is a arrangement of a digital key, which contains all the vital information about the registered signatory like authorized person name, address, email, phone number, and the authority which has provided the certificate.
Digital Signature for a registered company permits the authorized signatory to prove its identity and sign the documents electronically. For E-Filing, Digital Signature’s Certificate is a mandatory prerequisite.
Step 3: Applying for Director Identification Number or DIN
DIN or Director Identification Number is the Unique Identification Number for Directors of a registered company. Once Director Identification Number is approved, only then corporation documents can be filed under Registrar Form No.-DIR-3.
Note: Here, that the name approval process for the company can be filed before applying for Directors Identification Number (DIN), and there is a fee of Rs 500 is applicable for this process, and it may take seven days for DIN to be activated and approved.
Step 4: Writing Memorandum of Association (MOA)
Under the Section-4(6) of The Companies Act, 2013, Memorandum of Association or MOA must be in a respective form mentioned in a Table A, B, C, D and E of Schedule-I.
MOA is similar to the Constitution of the Company. It will highlight all the fundamental info about the company, its directors’, stakeholders and their relationship with the company. The objective of the company, liabilities associated, the state in which the company is functioning, and other related information are presented in this document.
Step 5: Writing Articles of Association (AOA)
Articles of Association or AOA is the article that procures the purpose of the company, how its business will run and how its Directors have been appointed and much more.
Step 6: Application for the Incorporation of Company
Once all these documents are arranged and finalized, the applicant may file for the incorporation of the company and under Section 7 of the Companies Act 2013, the application requests to be filed with the registrar under whose jurisdiction the company’s address is sited.
The application for company’s registration can be done thru e-Form (Simplified Proforma for Incorporating a Company Electronically) accompanied by SPICe MOA and AOA.
Once the outstanding procedures are completed, the Registrar of Companies grants a Certificate of Incorporation, which is the best evidence of the company’s existence.
The certificate of incorporation of a private limited company has under mentioned three critical information:
The list of documents required for the incorporation of company includes an Aadhaar Card, PAN Card, Address Proof, Digital Signature Certificate attested by the aspirants.
Private Limited Company’s Registration FeesPrivate Limited Company’s Registration cost is zero if, the company is small. In 2019, the Government of India abandoned off the registration fees for new companies which are incorporating under the private limited category. This abandonment of registration fees is applicable only for those private limited companies whose authorized capital is less than Rs 15 lakh. Only stamp duty requires to be paid in such a case. However, small companies availing fee abandonments for registration cannot raise any capital till one year. Registration fees for a private limited company having more than Rs 15 lakh capital and less than Rs 50 lakh capital are Rs 2000. In case, if it is not a small company, then registration fees are Rs 36,000. Don’t get dazed when it comes to considerate the procedure for the incorporation of company in India! We at (
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