Process Of Incorporation Of A Company

Coverage of this Article

Key takeaways

-The Ministry of Corporate Affairs has made sure that not only is the incorporation procedure straightforward, but that the process of registering a company in India is completed more quickly.

Obtaining Digital Signature Certificate

-A DSC is required for all company members who will participate in the incorporation process. 

Documents for a DSC

-Passport photograph

Documents for DIN registration

-Passport photograph

RUN Webservice using the company name

-The name of a company must be reserved before incorporation.

Drafting of the e-MOA and e-AOA

-The Memorandum of Association and Article of Association are necessary documents for the incorporation of any company.

Application for Incorporation

-e-MOA and e-AOA along with the signed subscribers' sheet

Conclusion

-The benefit of incorporating a company is that it can own property, sue, and be sued in its name. Additionally, incorporation protects members from unlimited liability and protects shareholders from having access to their own assets.

Key takeaways

• The Ministry of Corporate Affairs has made sure that not only is the incorporation procedure straightforward, but that the process of registering a company in India is completed more quickly.
• Incorporating a company, is done with the basic intention that it can own property, sue, and be sued in its name.
• Incorporation protects members from unlimited liability and protects shareholders from having access to their own assets.

A company's incorporation and grant of legal standing under Indian law are accomplished through the procedure of company registration. The Certification of Incorporation, a legal document that is acquired at the conclusion of the registration process, serves as the company's official proof of existence. Although there are many different kinds of companies, the two most common are private limited companies and public limited companies. Another new type of company, the One Person Company, was created under the 2013 Act (OPC). Additionally, holding companies, subsidiaries, government-owned companies, and international firms exist. A benefit of using a company as your business entity is that, in contrast to sole proprietorship and partnership arrangements, it is a separate legal entity.

The Indian Companies Act of 2013's requirements apply to pre- and post-incorporation formalities. The Ministry of Corporate Affairs (MCA), Government of India, oversees the same.

The registration procedure for a new company has been made simpler by the Ministry of Corporate Affairs. This is being done in an effort to improve Indian business accessibility and foster a culture of entrepreneurship.

The Ministry encourages a very quick registration process that is simple to complete online. An online registration form that is backed by scanned copies of the necessary papers and the applicant's digital signature (DSC) serves as the process's validation.

Documents required for Company Incorporation

For a private limited company, one-person company, or limited liability partnership to be registered, we will need the following documents. Additional paperwork may be needed if one wants to create a Nidhi company, register the company as an MSME, using Udyog Aadhar, or any other of the options.

The following documents are needed to incorporate a company in India:

• All directors' PAN cards
• Aadhar cards, voter IDs, passports (required in the case of a foreign director), or driving licences are examples of identity verification for directors.
• Address documentation for each director, such as electricity bills and bank statements (or any other utility bill such as a mobile bill). These bills must be in the director's name, be no older than two years, and be submitted.
• Address verification for the company's registered office.

Bills of electricity (or any other utility bill such as a mobile bill). These bills must be in the name of the property owner and cannot be more than two years old.

Along with the No Objection Certificate (NOC) from the owner, the parent documents for the company's registered office's real estate (the registration deed or property tax document) should be submitted. In this scenario, any one of the original stockholders would be thought to be the property's owner.

If a third party is renting the property, the rent agreement would also need to be produced in addition to the owner's NOC. Even though the Ministry may not always require it, it is always preferable to submit it in order to prevent resubmission or the incorporation form.

All parties participating in the registration process must also provide their digital signatures (DSC). Additionally needed is the DSC of the promoters, the initial shareholders, and the directors. The application for the DSC of two directors would be made based on the company formation plan one have chosen; the applications for the other directors would need to be made separately before the incorporation process could begin.

Obtaining Digital Signature Certificate

A DSC is required for all company members who will participate in the incorporation process. The e-MOA and e-AOA of the company must be signed by the DSC of the first shareholders in order to be uploaded to the Registrar of Companies (Roc). DSCs are now required for the initial subscribers or promoters. The potential director would also need to apply for a DIN, which requires a DSC.

Documents for a DSC:

• Passport photograph
• Address proof (Self-attested)
• Copy of PAN card (Self-attested)

Obtaining DIN (Director Identification Number)

In the incorporation forms, the Ministry must be informed of the DIN numbers of the proposed directors. Therefore, DIN is required for the company's proposed directors.

Documents for DIN registration

• Passport photograph
• Address proof (Self-attested)
• Copy of PAN card (Self-attested)
• DSC of the director

RUN Webservice using the company name

The name of a company must be reserved before incorporation. RUN (Reserve Unique Name), an easy-to-use online tool, is used to reserve the name of a new company or change the name of an existing one.

The Central Registration Centre (CRC) processes the application for the company name using a non-straight-through processing method. The CRC will perform a thorough investigation before approving or rejecting the name. The required fee for each name submission is INR 1000.

Once the name is approved, it is valid for:

• 20 days: For a new company
• 60 days: For an existing company

Drafting of the e-MOA and e-AOA

The Memorandum of Association and Article of Association are necessary documents for the incorporation of any company. Both of these documents define the internal and exterior ties of the organisation with its stakeholders. The MOA outlines the goals, funding, registered office, etc. AOA lays up the guidelines for managing and operating the business. Professionals wrote both of these documents, which must be provided with a subscribers' sheet that lists the DSCs of all the initial members.

Application for Incorporation

The following form must be submitted to incorporate the company once the required paperwork has been prepared. SPICe-32, an application for company incorporation.

The following proof of information must be included with these forms as well:

• e-MOA and e-AOA along with the signed subscribers' sheet
• INC - 9 Affidavit and declaration by the first subscribers and directors of the company
• Proof of office address: Lease deed / Conveyance / Rent agreement along with rent receipts
• Utility bills of the registered office (not older than two months)
• Form DIR – 2 (Consent of directors)

Form INC-22: Information about the registered office location (might be required later if proof of address is not filed with the SPICe form)

The company will receive its Certificate of Incorporation once all the requirements for company registration have been met.

Time taken for company registration

The Ministry has made sure that not only is the incorporation procedure straightforward, but that the process of registering a company in India is completed more quickly.

As long as all the paperwork is in line, a company can often be registered in 15 to 20 working days.

Conclusion

The benefit of incorporating a company is that it can own property, sue, and be sued in its name. Additionally, incorporation protects members from unlimited liability and protects shareholders from having access to their own assets. This indicates that a shareholder's obligation is limited to the amount of shares they have contributed. The transferability of shares on the open market is covered under section 82[1]. Western Maharashtra Development Corporation Ltd. v Bajaj Auto Ltd is a case to notice regarding the transferability of shares.