All about Company Incorporation and its Procedure
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October 26, 2021
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October 31, 2021All about Company Incorporation and its Procedure
When you have an idea for a start-up, nothing should come in the way of starting it. Especially if you need to know about all the necessary details of incorporating your company, the correct set of information is highly needed to make your dream come true. When forming a company, you need to register it as a legal company under government rules to avoid further hustling.
With our extensive article, you can get all the necessary help you need regarding the information on incorporating a company. In addition, you can find all the necessary details such as required documents, procedures, and governing authorities.
Company incorporation is a legal procedure for forming a company. The incorporated company is legally a separate entity, The MCA or Ministry of Corporate Affairs, which takes care of the procedure of company incorporation and the legalities. Companies such as Private Limited Companies, Public Companies, Sole Proprietorships, NBFC, and some others lie under the Jurisdiction of Companies Act, 2013. On the other hand, LLPs or Limited Liability Partnerships come under the jurisdiction of the LLP Act, 2008. Therefore, based on the different Acts, both types of companies have different procedures.
In the next part of the article, you can get the idea of the procedure of Incorporation of a company in India.
What are the legal steps of incorporating a company in India?
Without any information, you may find it very confusing what to do next. However, the process is very simple if you follow the right steps one after another. So, let's take a look at the procedure on a step-by-step process.
Decide on the Business Structure
This is the most crucial step while incorporating a company. Deciding the type of company indicates its direction. Based on what type of company you want to form, you can decide the type- whether you need investments, want to go solo, or restrict the liability. Based on your decision, you can form one of these types of companies-
- Private Limited Company
- Limited Liability Partnership
- One person Company
- Public Company
- Sole Proprietorship
- NBFC (Private Limited Company)
Choose a name and check availability
The next step of incorporating the company is finding a suitable name for your company. Choose a name carefully, as with this name; the company will be registered and identified. After registration, the name of the company will be labeled with the memorandum of association. For example, when it is a private company, the name of the company must end with 'private limited. Then, the promoter (who comes up with the idea of the company) needs to write the application for registration to the Registrar of Companies of the State. Once they verify whether the name is available for adoption, they allow the promoter to use the name and proceed with further legalities. Additionally, starting from then, all the formalities need to be fulfilled within a three-month span.
Director's Digital Signature Certificate or DSC
While forming a company, appointing a Director is a must step. Once you are done appointing, obtain the digital signature of that person. The Digital Signature of the director in a digital format is called the Digital Signature Certificate or DSC.
Procedure of incorporation
When the two basic steps- Approval of the Name and Digital signature certificate (DSC) are done, the next step is the Incorporation filling. Companies that come under the Companies Act 2013 have the same incorporation filling procedure using the SPICe forms. This form facilitates One-Day Company Incorporation for all the companies coming under the Companies Act, 2013. This form integrates all the below-mentioned registration procedures for the company under a single form.
- Name Reservation
- Obtaining DIN, i.e., Director Identification Number
- Incorporation
- PAN Application [ Section 49 A of the SPICe form (INC-32]
- TAN Number [Section 498 of the SPICe form]
What is the procedure of incorporation for LLPs?
The LLPs come under the LLP Act, 2008. Therefore, the SPICe forms are not applicable for these companies and the procedure is a bit different as well. First, you can get the name approval via RUN-LLP. After that, the LLP business owners need the DIR-3 e-KYC for obtaining the DIN and DPIN (Designated Partner Identification Number). The next step is for the LLP incorporation owner to fill the FLLIP (Form for Incorporation of LLP) form with the Registrar of Companies (ROC) of that particular area. From the date of incorporation, the agreement for partnership must be applied within 3-30 days.
What documents are needed for the Company Incorporation Procedure?
To have a successful registration process while incorporating, one must have the following documents-
For Indian Resident Director
- PAN Card
- Address Proof (following are documents qualifying as address proof)
- Aadhaar Card
- Driving License
- Ration Bill
- Electricity Bill
- Telephone Bill
- Residential proof
For Foreign Resident Director
- Passport
- Address Proof (following are documents qualifying as address proof)
- Driving License
- Residential Card
- Bank Statement
- An identification proof containing the address issued by the government
- Residential proof
Registered office address
- A registered document of the title of the premises of the registered office
- Notarized copy of the lease/rent agreement
- A No Objection Certificate (NOC) from the landlord.
- Any utility service proof in the registered office- electricity, gas, or telephone.
How long does the incorporation process take?
According to the government, a company incorporation takes one day. However, that is just the procedure of filling the SPICe form. The entire process usually takes 7-8 days, but it is never fixed.
What is the procedure fee of incorporating a company?
This is the most common question among all the companies incorporating queries. Let us tell you; the government charges NOTHING while you do it via the MCA portal of the government.
