Company Formation in India

If you want to conduct your business in the most structured format, private limited company is your answer to it. As Private Limited companies is governed by Companies Act, 2013, the businesses are to be run as per the strict word of law. Although there are various other structures available, Private Limited Company is the most preferable entity structure especially in the case of:

       a) Foreign companies;

       b) Companies looking to raise funds in future from third party investors;

       c) Expansion in future.

       e) Owners desiring Limited Liability for their business.

Procedure to Form a Company in India:

  1. Ownership and Board of the Company.

The first step is to decide who shall be the Shareholders (Owners) and Directors (Board) in the Company:

       a) Minimum number of shareholders should be two. Maximum number of shareholders can be 200;

       b) Minimum number of Directors is two.

In case, there are foreign shareholders / directors involved, there are restrictions on directorship. Atleast one Indian Director should be on Board. There are no such restrictions in case of sharehoding.

  1. Director Identification Numbers (DIN):

       a) Assuming there will two directors, both the directors will have to obtain DIN.

       b) For obtaining, it is compulsory to obtain Digital Signature Certificate (DSC)

  1. Application for Reservation of Name:

       a) If you have decided the name for your company, you can search whether a company with a similar name is registered or not. If a company with a similar name is already registered, the chances of allocation of that name to your company becomes very slim.

       b) Maximum six alternate names can be submitted alongwith your application for name reservation.

  1. Company Incorporation Form:

       a) The next step is to draft the Memorandum of Association.

       b) If any changes are there in the Table__ of Articles of Association, such changes should be made in Spice form

       c) The incorporation application is to be submitted within 60 days of such approval.

  1. Registered Office:

       a) This form may also be submitted alongwith the Incorporation application or separately within a period of 30 days post incorporation application submission.

The Documents that shall be required for Company Incoirporation are as under:

  1. Identity Proofs for Directors and Shareholders:

       a) PAN for Indian nationals;

       b) Notarised Passport for foreign nationals

  1. Address Proofs for Directors and Shareholders:

       a) Passport / Driving License / Aadhar; AND

       b) Bank Statement / Electricity Bill / Mobile Bill / Telephone Bill

Notarised copy of the above for foreign nationals.

 

  1. Proof of Registered Office:

       a) Rental Agreement / Sale Deed; AND

       b) Electricity Bill / Property Tax paid receipt.

       c) NOC Letter from the Landlord for use of premises.

 

Company Incorporation is a much easier process today than it was five years ago. However, there are certain safeguards and planning to be done before incorporating a private limited company.