Apply for Company Incorporation

Company Incorporation

Incorporation is the judicial process which basically used to form a company. It is a procedure in which business is formally organized and leads into existence.

How Company Incorporation Works

How Incorporation Works:

Due to incorporation, the company gets many benefits which will be discussed below:
It protects the owner’s assets.
Allows easy transfer of ownership to another partner.
It receives lenient tax restrictions and it carries forward the loss.
It is helpful to achieve lower tax rates.

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

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 requirement time to time.

It is simple to admit 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 whole or part of business of the company without disturbing ongoing business.

Financial Institutions are more comfortable with the corporate clients.

Easy to dispose of or part with whole or part of business of the company without disturbing ongoing business.Corporate status

Enjoying greater degree of confidence and trust by the public at large and Government Agencies.

Private Limited Company

Private Limited Company is most common and popular format of legal entity in India. It can have minimum two and maximum 200 (Two Hundred) shareholders. It cannot invite public for subscription of its shares or debentures. Further, the shares of 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 need to have minimum two directors and can have maximum of fifteen directors. One of the directors of the company must be Resident in India.

PROCEDURE FOR INCORPORATION OF PRIVATE LIMITED COMPANY

Step 1

Obtain Business details from client.
Collecting documents such as KYC of Directors and Shareholders, DSC, DIN details, if any.
Preliminary name search and / or suggestion of available name for the proposed company

Step 2

Filing Name Application for reservation of name via SPICE + PART A (We recommend filing name reservation application and obtaining approval on it, before filing for incorporation to reduce the chances of rejection. Applying for Company Incorporation without reserving name involves inherent risk of rejection of the application by the Registrar either on technical ground or on merit).
Acquiring DSC for the Proposed Director(s) and Proposed Shareholder(s).

Step 3

Post approval of name preparing necessary documents for registration of the company.
Incorporation documents like Memorandum of Association (MOA) & Articles of Association (AOA), Form INC 9, Form INC 10 etc are required to be drafted. The MOA and AOA are charter documents of the company. Therefore, these documents should be drafted with due diligence and by a professional having in depth knowledge of the subject and applicable Indian Rules & Regulations.
The MOA states the main and incidental or ancillary objects of the proposed company. It also states the authorized share capital of the proposed company and the names of its promoters.
The AOA contain the rules and procedures for the routine conduct of the proposed company. It also states the names of its first directors of the proposed Company.

Step 4

Once the documents as stated above, are properly signed by the promoters, the consultant responsible for incorporation of the company will witness the signature and address of the promoters. Further these documents need to be notarized & legalized in case the document has been signed outside India. Thereafter these documents will be submitted to the ROC for incorporation of the company along with requisite fee as prescribed under the Act.
The Registrar of Companies on being satisfied about the documents filed and contents thereof will issue certificate of incorporation. The certificate so issued by the ROC is conclusive proof of incorporation of the company in India.

Step 5

Once the company has been incorporated, the requirement of compliances starts from the very first month
Compliances such as convening and conducting first Board Meeting within 30 days of incorporation, appointment of auditor, filing w.r.t. commencement of business are required to be completed

Step 6

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.

FAQ

Certainly, you may not have an office at the time of opening the company. However, on incorporation, you need to fill some additional forms, you should complete this, after incorporation you have 30 days to complete the details.

The registration of a company takes around2 to 3 weeks. However, it depends on the structure or plan of the company.

There are a few requirements:

  • NOC and utility bill from the owner of the registered office.
  • If the building is rented then the rental agreement with the registered owner.
  • Form INC9 needs to be signed by the director or subscriber.
  • Self attest is required from both ends director as well as subscriber.

Yes. The proposed made should not be identical or similar to the existing name of a registered company or LLP or registered trade mark. It is advisable to avoid general name. at the same time the proposed name should disclose the activities of the company as far as it is possible to avoid rejection of name approval application.

  • Charter Document of Foreign Corporate entity/MOA in case resident company.
  • Copy of Address proof of Foreign Corporate entity/Resident Company.
  • Certificate of Incorporation of corporate entity in their home country.
  • Board resolution authorising use of Name of entity (if the proposed company wishes to use name of such entity).
  • Board Resolution authorizing a representative to execute documents on behalf of company and certified KYC (Identity and Address Proof) of such authorized representative.

There is no minimum threshold to invest in Company.

Every company needs to be registered in India must have permanent place of business. In fact, this is the address where all official correspondence takes place during the course of business unless, until the company desires to have different correspondence address. Generally the consultants provide this facility to the companies to begin with. Shifting of registered office within the state is permitted under the Law without much compliance.

A company can start its business activities only after bringing Paid up share capital as agreed in MOA & applying for certificate of Commencement of Business. This needs to be done within 6 months from the date of incorporation of company.

Yes, NRIs, foreign nationals and foreign entities can register a company in India either under automatic route or subject to approval by RBI depending upon the nature of activities being undertaken by the company after its incorporation. However, the Indian company must have one Indian national as one of the director of the company, a registered place of business in India.

The company can designate Indian director on the board to execute and sign necessary documents and deed on behalf of the company in the regular course of business without Foreign Nationals being physically present in India. Or else, the Foreign Nationals director can appoint “Alternate Director” to act on his behalf. In any case, under Companies Act, 2013, every Company incorporated in India must have one director on the board who must also stay in India for more than 180 days in a year.

The companies have an option to have a comman seal made of metal or any other material to authenticate various contracts and other deeds including share certificates. Common Seal should be adopted by a resolution of the Board (generally First Board Meeting) & impression of seal should be made part of the minutes of the meeting in which it is adopted).

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