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Procedure for Incorporation/Registration/Formation of a Company under Companies Act, 2013

CS Sweta Abhishek

This article is an attempt to share my experience and to provide a brief knowledge of Company Incorporation/Formation/Registration procedure not only to my professional colleagues/friends but also to the entrepreneurs looking to set up their businesses in India.

A Company is an Artificial person in the eye of law. A company need to get incorporated/Registered to get a position of legal entity.

As per Companies Act, 2013 Minimum requirement to incorporate a Company requires the following:

Private Company:

 A Private Limited Company is a Company limited by shares in which there can be maximum of 200 shareholders, no invitation can be made to public for subscription of share and debenture, there is restriction on transfer of shares and cannot accept deposits from public.

MINIMUM REQUIRMENT

  • Minimum 2 Directors

           As per Companies Act, 2013, every company shall have atleast one Indian Director i.e. who has stayed in India for a period of 182 days or more in the previous calendar year.

  • Minimum 2 Shareholders

           Directors and Shareholders can be the same persons

  • Minimum Share Capital

          Minimum share capital shall be Rs. 1,00,000 (INR One Lakh)

  • DSC (Digital Signature Certificate ) of  the Directors
  • DIN(Director Identification Number) of the Directors

Public Company:

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits.

MINIMUM REQUIRMENT

  • Minimum 3 Directors

           As per Companies Act, 2013, every company shall have atleast  one  Indian Director i.e. who has stayed in India for a period of 182 days or more in the previous calendar year.

  • Minimum 7 Shareholders
  • Minimum Authorised Share Capital of Rs. 5 Lacs
  • DSC (Digital Signature Certificate ) of  the Directors
  • DIN(Director Identification Number) of the Directors

PROCEDURE FOR INCORPORATION/REGISTRATION/FORMATION OF A COMPANY

Obtain DSC (Digital Signature Certificate)

          Obtain a Digital Signature Certificate from Authorized DSC issuing Authority.

          Documents required for obtaining DSC :

  •  Proof of Identity
  • Proof of Residence
  • One self attested passport size photograph

           Obtain DIN

          Application to be made in Form DIR-3 for obtaining the DIN no. of the Directors after obtaining the DSC.

         Documents required for obtaining Director Identification Number:

              1. Scanned copy of Passport-sized photograph (JPEG Format)

             2. Identity proof: Scanned copy of PAN card (passport if foreign national) and

            3. Address Proof: Driver’s License/Voter ID/ Utilities Bill not more than two months old from the date of filing. Documents should be  self-attested.

Note:

if DIN is applied for Foreign national: Details of a valid passport should be filled in form DIR-3 and a certified copy of same should be attached with DIN application. All supporting documents including photograph should be certified by the Indian Embassy or a notary in the home country of the applicant or by the Managing Director / CEO / Company Secretary of the company registered in India, in which applicant is a director. If a foreign director has a valid multiple-entry Indian visa or Person of Indian Origin card or Overseas Citizen of India card, then the attestation could also be done by Public Notary / Gazetted Officer in India or practicing CA / CS / CWA.

           Register DSC

          After obtaining the DIN No. register the DSC on MCA portal in the name of Director. In MCA portal go to MCA services-DSC Services-Register DSC.

Companies Act, 2013 provides two ways by which a Company can be incorporated:

  1.  New Fast Track Company Incorporation method (Form INC-29 Integrated Form for Incorporation)
  2. Regular Incorporation method (Form INC-1, Form INC-7, Form DIR-12 & Form INC-22)

 

NEW INCORPORATION METHOD:

MCA has tried to simplify the Incorporation procedure by introducing Form INC-29, an integrated form in which on a one go applicant can apply for the following:

1.Name Availability

 Form INC-29 allows to apply for only One name (Make sure that proposed name is available by checking Name availability in MCA portal and adhere to the Companies Act, 2013 and rules thereunder (Naming Guidelines) and Companies (Incorporation) Amended Rules, 2016)

2.Apply DIN for Maximum of 3 Directors

One of the Director of the proposed Company must contain DIN No. before filing and for other Directors (max 3 Directors) of the Company  can apply DIN in the integrated form.

Example: if there are 4 Directors in the proposed Company and none of the Director is having a DIN then out of 4 directors, 1 Director should apply DIN by applying in Form DIR-3 and rest of the 3 Directors DIN can be applied in the Form INC-29.

3. First Directors of the Company

4. Incorporation of Company

5.Situation of Registered office

6.Application of PAN

7.Application of TAN

8.Employer Registration under ESIC

Incorporation Documents to be attached in Form INC-29:

1. MOA (Memorandum of Association)

                  The Memorandum of a company shall be adopted in the specified form of Schedule I (Table A,B,C,D,E as applicable) of the Companies Act, 2013

2. AOA (Article of Association)

                  Article of the Company shall be adopted in the specified form of Schedule I (Table F,I,J as applicable) of the Companies Act, 2013

3. Identity proof and Residential Proof of the Directors who applied for DIN

4. Identity proof and Residential Proof of the Subscribers

5. Proof of Registered Office

       1.No Objection Certificate from the Owner

      2.Rent Agreement/Lease Agreement etc.

      3.Utility Bill (Not more than 2 months old from the date of filing)

6. Declaration by Professional- INC -8

7. Affidavits and Declaration by the First Subscribers and Directors:

  • INC-9-Affidavit from the Subscriber to the Memorandum (MOA)
  • INC-10-Verification of Signature of subscribers
  • DIR-2-Consent to become a Director of the said Company
  • Affidavit under Circular 11/2013

Note: The Memorandum of a company shall be adopted in the specified form of Schedule I (Table A,B,C,D,E as applicable) of the Companies Act, 2013 and Article of the Company shall be adopted in the specified form of Schedule I  (Table F,I,J as applicable) of the Companies Act, 2013.  

Subscriber Sheet of MOA & AOA: Last page of MOA and AOA consist of Subscriber sheet in which the  following details of the subscribers to the MOA and AOA need to be mentioned:

  • The MoA and AoA shall be signed by each subscriber to the memorandum, who shall add his name, address, description and occupation in his own handwriting in the presence of at least one witness and shall contain photo of each individual subscriber.
  • Witness Signature along with Name, Address, Occupation and Membership No. (if any). The witness shall state that:

“I witness to subscriber/subscriber(s), who has/have subscribed and signed in my presence (date and place to be given); further I have verified his or their Identity Details (ID) for their identification and satisfied myself of his/her/their identification particulars as filled in”

  • If the subscriber is illiterate, he should affix his/her thumb impression or mark which shall be described as such by the person, writing for him, who shall place the name of the subscriber against or below the mark and authenticate it by his own signature and he/she shall also write against the name of the subscriber, the number of shares taken by him/her. Also such person shall also read and explain the contents of the MoA and AoA to the illiterate subscriber and make an endorsement to that effect on the MoA and AoA.
  • Where the subscriber to the memorandum is a body corporate, the MoA and AoA should be signed by director, officer or employee of the body corporate duly authorized in this behalf by a resolution of the board of directors of the body corporate and where the subscriber is a Limited Liability Partnership (LLP), it should besigned by a partner of the Limited Liability Partnership, duly authorized by a resolution approved by all the partners of the LLP. However in either case, the person so authorized shall not, at the same time, be a subscriber to the memorandum and articles of Association.

Payment of ROC Fee & Stamp Duty

After Uploading the Form INC-29 , one need to make payment of RoC fees and Stamp Duty electronically as per  the Authorised Capital of the Company .

Verification of Documents

RoC scrutinises all the documents and forms and may suggest few changes as per the requirement. In such case, required changes has to be made by the Applicant and resubmit the form .

Incase of INC-29, only two resubmissions are allowed. If after two resubmission still some changes were found by RoC then fresh form need to be submitted along with RoC fee and Stamp Duty again.

Issue of Certificate of Incorporation

RoC approves the Incorporation of the proposed Company, when after scrutiny, RoC is satisfied with the Form and its attachments and issues "Certificate of Incorporation". Once the Incorporation Certificate is received , Company can start its Business.  

REGULAR INCORPORATION METHOD

1. DIN Application

Obtain Director Identification Number for all the Directors of the proposed Company. Apply In Form DIR-3.

2. Name Approval (FORM INC-1)

Apply in Form INC-1 for Name approval of the Proposed Company after drafting the Main Object/ nature of Business of the proposed Company. Maximum Six names can be given in order of preference. RoC will approve the available and suitable name among the given names for the proposed Company.

Note:

 Name should be selected as per the Companies Act, 2013 and Rules made thereunder. Applicants can themselves check the available names in MCA Website under the head MCA Services: Check Company Name. Name of the proposed Company should not fall under "Undesirable names" as mentioned in Companies (Incorporation) Rules, 2014 and Companies (Incorporation) Amendment Rules, 2016 .

Once name of the proposed Company is approved, it remains valid for 60 days from the date of approval.  Within the said period of 60 days, Company has to be incorporated otherwise again name approval in Form INC-1 is required to be filed with MCA.

3. Draft MOA & AOA

Before Incorporation, MOA (Memorandum of Association) and AOA (Article of Association) of the proposed Company is drafted and printed. The Memorandum of a company shall be adopted in the specified form of Schedule I (Table A,B,C,D,E as applicable) of the Companies Act, 2013 and Article of the Company shall be adopted in the specified form of Schedule I  (Table F,I,J as applicable) of the Companies Act, 2013.

Subscriber Sheet of MOA & AOA: Last page of MOA and AOA consist of Subscriber sheet in which the  following details of the subscribers to the MOA and AOA need to be mentioned:

  • The MoA and AoA shall be signed by each subscriber to the memorandum, who shall add his name, address, description and occupation in his own handwriting in the presence of at least one witness and shall contain photo of each individual subscriber.
  • Witness Signature along with Name, Address, Occupation and Membership No. (if any) of the witness. The witness shall state that:

“I witness to subscriber/subscriber(s), who has/have subscribed and signed in my presence (date and place to be given); further I have verified his or their Identity Details (ID) for their identification and satisfied myself of his/her/their identification particulars as filled in”

  • If the subscriber is illiterate, he should affix his/her thumb impression or mark which shall be described as such by the person, writing for him, who shall place the name of the subscriber against or below the mark and authenticate it by his own signature and he/she shall also write against the name of the subscriber, the number of shares taken by him/her. Also such person shall also read and explain the contents of the MoA and AoA to the illiterate subscriber and make an endorsement to that effect on the MoA and AoA.
  • Where the subscriber to the memorandum is a body corporate, the MoA and AoA should be signed by director, officer or employee of the body corporate duly authorized in this behalf by a resolution of the board of directors of the body corporate and where the subscriber is a Limited Liability Partnership (LLP), it should be signed by a partner of the Limited Liability Partnership, duly authorized by a resolution approved by all the partners of the LLP. However in either case, the person so authorized shall not, at the same time, be a subscriber to the memorandum and articles of Association.

4.Incorporation of Company

For incorporation of the Company, applicant is required to submit  Form INC-7(Application for Incorporation of Company), Form DIR-12 (Appointment of Directors) & Form INC-22 (Situation of Registered Office of the Company) together.

Document to be attached in Form INC-7 (Application for Incorporation of Company)

            1. MOA (Memorandum of Association)

            2. AOA (Article of Association)

           3. INC -8-Declaration by Professional(CA/CS/CMA)

           4. INC-9-Affidavit from the Subscriber to the Memorandum (MOA)

           5. INC-10-Verification of Signature of subscribers

           6. Affidavit under Circular 11/2013

           7. Identity proof and Residential Proof of the Subscribers

          8. PAN Card of the subscribers

Document to be attached in Form DIR-12 (Appointment of Directors)

        1. DIR-2-Consent to become a Director of the said Company

        2. INC-9-Affidavit from the First Director in the AOA

Document to be attached in Form INC-22 (Situation of Registered Office of the Company)

         1. No Objection Certificate from the Owner

         2. Rent Agreement/Lease Agreement/ Sale Deed

         3. Utility Bill (Not more than 2 months old from the date of filing)

NOTE:  

  • If the proposed Company registered office is same as any existing Company, NOC  in form of Board Resolution is required from the existing company.
  • Form INC-22 to be filed within 15 days of incorporation of the company, either if, address of correspondence as mentioned in INC-7 is not the address of registered office of the Company or it has not been not filed along with incorporation form.

5.Payment of ROC Fee & Stamp Duty

After Uploading the Form INC-7, INC-22 & DIR-12 , applicant need to make payment of RoC fees and Stamp Duty electronically as per  the Authorised Capital of the Company .

6.Verification of Documents

RoC scrutinises all the documents and forms and may suggest few changes as per the requirement. In such case, required changes has to be made by the Applicant and resubmit the form .

 7.Issue of Certificate of Incorporation:

RoC approves the Incorporation of the proposed Company when after scrutiny RoC is satisfied with the Form and its attachments and issues "Certificate of Incorporation". Once the Incorporation Certificate is received, Company can start its Business.  

 

Legal Disclaimer:

The information/articles & any reply to the Comments in this blog are provided purely for informational and educational purpose only and purely based on my understanding/Knowledge. They do not constitute legal advice or legal opinions.

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