Process of Incorporation of Company | The Complete Information

 

The Ministry of Corporate Affairs has mandated the process of incorporation of company in India under the new Companies Act 2013.

In this article, we'll walk you through the steps of company registration online in India and provide information on the documentation you'll need.

In addition to the documents needed, we'll explain the Pvt limited company registration fees and the meaning of the director identification number, which might be complicated for novice business owners.

 

Company Incorporation in India: A Step-by-Step Guide

 

Step 1: Reserve the name of your company under RUN or Spice.

The first and most important stage in the company registration process is to reserve the company's name.

There are two approaches: RUN and Spice. RUN, or Reserve Unique Name, is a web form on the Ministry of Corporate Affairs' website that allows applicants to verify whether their new business name is available and then apply for a desirable name.

The candidates must supply two names in priority order and adhere to all of the naming convention's rules.

When approving a company name, the MCA considers three crucial factors:

• The name should be distinctive, and it should not be used by any other company (public or private).
• The name mustn't be offensive.
• Its name should not imply that it is associated with the government.

Filling out the Spice-32 form is another choice for finalising the name, but you can only choose one option, and if it's denied, you'll have to start over with all of your evidence.

The applicant must also choose the names of the company's directors. At least two directors' names must be submitted for a private limited corporation.

 

Step 2: Obtaining a Certificate of Digital Signature

After the MCA has authorised and registered the company name, the following step is to obtain a Digital Signature Certificate for your private limited company.

A digital signature certificate is a type of digital key that contains all of the necessary information about the signatory, such as name, address, email, phone number, and the authority that issued the certificate.

A registered company's authorised signatory can use a digital signature to confirm its identity and sign documents electronically. A Digital Signature Certificate is required for electronic filing.

For acquiring a Digital Signature Certificate, the candidate get in touch with a business service provider like StartEazy, Vakilsearch or IndiaFilings.

 

Step 3: Obtaining a Director Identification Number (DIN)

The Director Identification Number, or DIN, is a one-of-a-kind identifier for a registered company's board of directors. Registrar Form No.-DIR-3 can only be used to file corporate documents once the DIN has been approved.

It's worth noting that the company's name can be approved before filing for a DIN. There's a price of Rs 500 for this, and the Process of Incorporation of Company takes seven days.

 

Step 4: Writing the Memorandum of Association 

The Memorandum of Association, or MoA, must be in the form provided in Table A, B, C, D, and E of Schedule-I of The Companies Act, 2013.

MoA is like the Constitution of the Company: It will emphasise all the fundamental knowledge regarding the company, its shareholders, directors, and their loyalty towards the company. This document contains information on the company's goal, liabilities, the state in which it operates, and more.

The memorandum outlines the field in which the firm will operate, as well as the company's goals and the type of business it intends to pursue. 

It's further broken down into five sections.

• Capital Clause 
• Name Clause
• Registered Office Clause 
• Objects Clause 
• Liability Clause

 

Step 5: Composing Association Articles (AoA)

The Articles of Association, or AoA, is a document that outlines the company's mission. How it will do business, and how its directors will be appointed, among other things.

 

Step 6: Submit a Company Incorporation Application

The applicant may register for company incorporation once all of these documents are available and complete. Under Section 7 of the Companies Act 2013, the application must file with the registrar whose jurisdiction the company's address is in.

Company registration online can be made via e-Form SPICe accompanied with SPICe MOA and AOA.

The Registrar of Companies issues a Certificate of Incorporation. It serves as proof of the company's existence. Once all of the required procedures have been completed.

 

The certificate of incorporation of a private limited company has this 3 critical information:

• Company Identification Number (CIN)
• Company PAN Card
• Director Identification Number (DIN)

 

The list of documents required for the Process of Incorporation of Company includes: 

• Aadhaar card
• PAN Card 
• Address proof
• Digital Signature Certificate attested by the applicants.

 

Private Limited Company Registration Fees 

Only private limited businesses with an authorised capital of less than Rs 15 lakh are eligible for the registration cost waiver. In this situation, only stamp duty must be paid. However, such small enterprises seeking fee waivers for registration cannot raise any capital till one year.

A private limited company with a capital of more than Rs 15 lakh but less than Rs 50 lakh must pay Rs 2000 in registration fees. If your firm isn't small, you'll have to pay Rs 36,000 in registration fees.

 

Certificate of Incorporation 

If the Registrar totally satisfies that the company incorporation has met all of the conditions, he will register the company and issue a certificate of incorporation. As a result, the Registrar's certificate of incorporation is irrefutable proof that the Act's conditions have been met.

 

Commencement of business

A private limited company and a company without share capital can start doing business right away after completing the Process of Incorporation of Company. According to section 149(2A) of the Companies Act, 1956, a private limited company with share capital must additionally get a separate certificate of commencement of operation.

The MCA 21 project has made it feasible to incorporate a business without having to go to a registrar's office. 

From obtaining a Directors Identification Number (DIN) through receiving a Certificate of Incorporation, the entire process is accomplished online. 

Due to the fact that the entire process is now online, the formation of a private company takes about 10 to 15 days. As a result, if a businessman wants to start a business, this choice is highly recommended.