Business Commencement

Company Registration Process Explained
author07 6 Apr 2 min read

Documents Company Registration

Company Registration Process Explained
author08 6 Apr 2 min read

Company Registration FAQ

Company Registration Process Explained
author08 6 Apr 2 min read
Company Registration Process Explained

Business Commencement

author07 6 Apr 2 min read

A company can commence business ONLY AFTER filing a declaration with the registration with Registrar of Companies (ROC) stating that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him and the paid-up share capital of the company is not less than less than One Lakh Rupees or Five Lakh Rupees as the case may be for Private and Public Companies respectively.

All companies (including a Small Company and OPC) shall not start any business or exercise any borrowing powers without filing the declaration with registrar within 180 (One Hundred and eighty) days from the date of incorporation as stated above. The contents of this declaration shall be also be verified by a Company Secretary or a Chartered Accountant or a Cost Accountant in practice:

In case the declaration (Form INC 21) has not been filed by the company with the Registrar within 180 days of the date of incorporation of the company, the Registrar may initiate action for the removal of the name of the company from the register assuming that the company is not carrying on any business or operations.

In order to file the required declaration, the company shall comply the following requirements after registration.

a)To file the Registered Office verification with Registrar of Companies within 30 days of its registration.

b)Every subscriber to the memorandum has to pay the value of the shares agreed to be taken by him and the paid-up share capital of the company is not less than less than One Lakh Rupees or Five Lakh Rupees as the case may be for Private and Public Companies respectively.

The Subscribers are bound to bring the amount of shares subscribed by him to the company before filing required declaration. To record the remittance of share subscription amount, the company has to open a bank account and all the subscribers should bring entire subscription money to this account before filing the declaration.

Company Registration Process Explained

Documents Company Registration

author08 6 Apr 2 min read

  • DIRECTORS (Who does not have a DIN)
  • a)Identity Proof:

    Indian Nationals – Copy of PAN Card (Self certified)

    Non Indian Nationals – Copy of Passport (Self Certified and notarized)

    b)Address Proof:

    Permanent Address Proof: Copy of Passport or Driving License or Aadhaar Card or) or Voter Identity Card or Telephone Bill or Electricity Bill or Bank Statement (Not older than 2 months)

    Present Address Proof : Telephone Bill or Electricity Bill or Bank Statement (Not older than 2 months)

  • SHAREHOLDERS (If the Shareholder is not a proposed Director)
  • a)Identity Proof:

    Indian Nationals – Copy of PAN Card, Passport or Driving License or Aadhaar Card or Voter Identity Card. (Self certified)

    Non Indian Nationals – Copy of Passport (Self Certified and notarized)

    b)Address Proof:

    Permanent Address Proof: Copy of Passport or Driving License or Aadhaar Card or) or Voter Identity Card or Telephone Bill or Electricity Bill or Bank Statement (Not older than 2 months)

    Present Address Proof : Telephone Bill or Electricity Bill or Bank Statement (Not older than 2 months)

    Passport Size Photos - 6 Nos.

    Notes:

    a)All the Copies of documents must be self attested by the applicant

    b)In case of non-Indian Nationals, the documents are required to be notarized from the home country.

    c)The Telephone Bill / Mobile Bill/Electricity Bill / Bank Account Statement must be in the name of applicant and should not be older than 2 months.

    d)In case of documents that are in languages other than English, it should be translated to English with the help of a professional translator, carrying his details (name, signature, address, and seal) If the proposed director has a valid Director Identification Number and if he or she is a proposed shareholder, the address in MCA records and should match with present address proof.

  • Registered Office Address (Required after Incorporation)
  • The following documents are required to file return of verification of registered office with Registrar of Companies within 30 days of registration.

    a)If the Registered office is owned by the company:

    Copy of ownership document

    Copy of utility bill such as telephone bill or gas bill or electricity bill.

    b)If the Registered office is rented by the company:

    Notarized copy of Rent Agreement

    Copy of rent paid receipt

    Copy of utility bill such as telephone bill or gas bill or electricity bill.

    c)If the Registered office is owned by any other person:

    No-Objection letter from the owner

    Copy of utility bill such as telephone bill or gas bill or electricity bill.

"Well begun is HALF Done!"

Aristotle

"Organize all required documents to avoid delay in Incorporation Process"

CompaniesInn

Company Registration Process Explained

Company Registration FAQ

author08 6 Apr 2 min read

Who is a Shareholder?

Shareholder(s) or Member(s) are the persons who invest capital and holds shares in a company. Members are the ultimate owners of the company.

How many Shareholder(s) and Director(s) are required for registering a company?

Number of Shareholder / Directors required for registering a Limited company varies depends on the type of the company, which are.

One Person Company – Only 1 (One) shareholder and 1 (One) or more Directors and 1 (One) Nominee Shareholder.

Private Limited Company - Minimum of 2 (Two) Shareholders and 2 (Two) Directors

Public Limited Company - Minimum of 7 (Seven) Shareholders and 3 (Three) Directors.

Who can become a Shareholder in a company?

In case of One Person Company, only an individual who is an Indian citizen and resident in India can become the shareholder. In case of Private Limited Company and Public Limited Company, shareholders could be Individuals, Companies or LLPs, but only individuals can become directors of the company.

Who is a Nominee Share holder in a One Person Company?

Nominee shareholder is a person nominated by the member of an OPC to become the member of the company in the event of the Member's death or his incapacity to contract. Initially the subscriber to the memorandum shall nominate another person as his/her nominee and the nomination can be changed at any time by the Member. Only an individual who is an Indian citizen and resident in India can become nominee for the sole member of a One Person Company.

Who is a Director?

Directors of company are responsible for company management and legal compliance under various laws.

Who can become a Director in a company?

Only an individual can be appointed as a director of a company. A director need not be a shareholder of the company and shareholders need not necessarily be the directors also.

What is Authorised Capital?

Authorised Capital or Registered Capital of a company is the upper limit of capital that a company can issue shares and collect money from shareholders.

What is the minimum Authorised Capital for registering a Company?

Minimum Authorised Capital for registering an OPC and Private Limited Company is Rs.1,00,000 ad public limited company is Rs.5,00,000.

Can authorised capital be increased?

Authorised Capital can be enhanced at any time by passing a resolution at a meeting of shareholders. Authorised capital can be any amount above the minimum limit. The fee payable to ROC will be calculated on the basis of Authorised Capital

What is Subscribed Capital?

Subscribed Capital refers to the total amount of share capital agreed to be brought in by the shareholders to the company

When the Subscribed capital has to be brought in to the Company?

For commencing the business by a Limited Company, the subscribers to Memorandum have to bring the agreed amount of capital to the company's account and the Company has to file a declaration to the Registrar of Companies. Only after filing the referred declaration, the company can start doing business. So the subscribers to MOA have to bring the entire amount of subscribed shares capital immediately after Incorporation. The maximum time available to bring the capital is 180 days from the date of registration of company.

What happens if the subscribed capital is not brought in within specified time?

If the subscribers are not brought the money within the specified time, the registrar can issue notice for closure of the company.

What is Paid Up Capital?

Paid up capital of a company refers to the amount of capital actually brought in by the shareholders to the company

How the money can bring into the company?

The subscribed capital can be brought into the company in any accountable mode. The best practice is to open the bank account for the company and bring the money to company's account from the personal account of each subscriber by way of cheque or bank transfer.

What is meant by Objects of the Company?

Objects are the proposed business of the company. The objects can be any business that is legal. It is advisable to identify the main objects of the company in a particular line of business. The name of the company must be in line with the main objects of the company. If the name of the company is not describing a particular object, then the company can have multifaceted objects. The objects are described under a Clause in Memorandum of Association of the Company.

Whether the objects of the company can be changes later?

A company can change its objects by passing a resolution at the Shareholders meeting.

How to decide the Name of the Company?

A company must have a unique Name. The approval of Company Names is subject to Company Name Guidelines issued by MCA. The name of the company should end with the words 'Private Limited (OPC)' or 'Private Limited' or 'Limited' as the case may be. The name of a company should not be identical with or nearly resembling with the name of a company in existence and such a name is already approved by the Registrar of Companies or The name of a Limited Liability Partnership (LLP) in existence or a name already approved by Registrar of LLPs; or A registered trade mark or a trade mark for which an application is filed under the Trade Marks Act, 1999.

How to decide the State in which the company is to be registered?

The jurisdiction of the ROC will depend on the state in which the registered office is situated. Place of registration depends on the convenience to the promoters

What is Registered Office of the Company?

The Registered office address is the official communication address of the Company. The Registrar of Companies shall send all the correspondence relating to the company to the registered office address.

When the company must have a registered office?

At the time of Registration, a Temporary Address can be given as the company's registered office. From the 15th day of registration, company should have a permanent address as registered office receiving and acknowledging all communications and notices. Within 30 days of registration, the company has to file a return of verification of registered office with proof of registered office address with Registrar of Companies.

Whether registered office can be changed from one place to another?

The registered office can be changes from one place to another place within the city, or within the sate or state to state subject to compliance of requirements under Companies Act

Whether Administrative Office can be same or different from Registered Office?

Administrative Office refers to a place where general Administration of company happens. Administrative Office can be same or different from Registered Office

What is a Digital Signature Certificate (DSC)?

DSC is a legally recognised method of signing documents electronically. A digital signature is a type of asymmetric cryptography used to simulate the security properties of a handwritten signature on paper. Digital signature schemes normally give two algorithms, one for signing that involves the user's secret or private key, and one for verifying signatures that involves the user's public key. The output of the signature process is called digital signature. Digital signature certificates are used by programs on the Internet and local machines to confirm the identity of a third party. Digital signatures have often confused with scanned copies of a physical written signature, which do not have any legal backing for authentication of electronic documents.

What is use of Digital Signature Certificate (DSC) in Company Registration?

All the applications, Documents and Returns filed to the Registrar of Companies (ROC) are submitted online through www.mca.gov.in. These forms need to be authenticated by a Digital Signature Certificate (DSC) issued by the Certifying Authority in India.

How to get a Digital Signature Certificate (DSC)?

In India, Digital Signature Certificate (DSC) is issued by Certifying Authorities appointed under Information Technology Act 2000. NCode Solutions, e-Mudhra and Safescrypt are the Certifying Authorities issuing DSC for MCA use. An application along with Identity and address documents are required to be Certifying Authorities for issue of Digital Signature Certificate.

What is a Director Identification Number (DIN)?

Director Identification Number (DIN) is a unique identification number allotted by the Ministry of Corporate Affairs to the Directors of Companies. To become a Director of a Company, the incumbent director must have DIN.

Director Identification Number (DIN) for Company and LLP are same?

Yes. DIN being an identification number issued by Ministry of Corporate Affairs, the same is used for Directors of Company and Designated Partners of LLP.

How to obtain a Director Identification Number (DIN)?

A DIN can be obtained by filing an online application with a copy of identity and address proofs using the Digital Signature Certificate (DSC) of applicant and certified by a Company Secretary / Chartered Accountant / Cost Accountant in Practice. To read more about DIN, See Director Identification Number (DIN).

How to check the availability of Company Name?

The availability of Company Name can be verified at www.mca.gov.in. If there is no similar names registered already, the may be available for registration. The search results do not provide any guarantee that the searched name will be available for registration as the company name has to be approved by office of ROC.

How to make Company Name Application?

The application for Company Name has to be filed for getting the company name approval from the ROC. It is preferable to submit the application with multiple names in the order of preference. Company name application must be in line with the Company Name Guidelines.

How many Names can be applied with one application?

Multiple names can be submitted for approval in one application in the order of preference. If the first applied name is not available, ROC will approve the next name. If you are particular about one name, it is preferable to apply with one name only and in case that name is not available apply the next name. Name application can be resubmitted only once.

How long Company Name is valid for Registration?

Once approved by the office of ROC, Company Name shall be available for 60 days. Company registration documents have to be executed and filed within this time line.

Can I reserve a Company Name?

There is no option to reserve a Company Name. The Company Name shall be available for 60 days from the date of approval. After the expiry of 60 days, a fresh application has to be filed for availing the name for registration.

I have a trademark. Can I get the same Name for My Company?

If the trademark is registered, it gives you the right to get the same name. In case your Trademark application is under process at Trade Mark Registry, your application gets priority for approval as long as there is no similar Company or LLP registered at Ministry of Corporate Affairs.

What is the Guidelines for Company Name Approval?

Company name approval is subject to Rule 8 of Companies (Incorporation) Rules, 2014. Read detailed Guidelines for Company Name Approval.

How to Execute the Company registration documents?

After the company name is approved, the company incorporation documents such as Memorandum of Association (MOA) and Articles of Association (AOA) have to be executed by the promoters in the prescribed format. MOA and AOA have to be signed by the subscribers and have to write their details such as Name, Father's Name, Residential Address, Occupation and the Number of Shares they agree to subscribe in their own handwriting. The signatures of the subscribers have to be witnessed by a person with his/her Name, Father's Name, Residential Address and Occupation

Shall I have to write in my own handwriting and Sign?

Yes. All the subscribers to MOA and AOA have to write their details in their own handwriting and sign the same.

How to Submit Company Registration documents to the Registrar of Companies (ROC)?

Duly executed MOA and AOA has to be submitted to the ROC of the respective state for the company registration through online applications along with Company Registration Fee. Along with MOA and AOA, details of directors are also required to be filed with the ROC.

Whether the originally signed MOA and AOA has to be submitted to ROC?

No. The originally executed MOA and AOA are not required to be filed with the ROC. The same has to be preserved by the promoters as permanent records.

Who issues Certificate of Incorporation?

The ROC will register the company after due verification of MOA, AOA and other details and will issue the Certificate of Incorporation (COI). ROC will also allocate a Corporate Identification Number (CIN) to the company so registered.

How the ROC issues Certificate of Incorporation?

The Certificate of Incorporation is issued by the ROC in Electronic Format signed with the digital signature certificate. No physical certificate will be issued by the office of ROC.

What is Corporate Identification Number (CIN)?

Corporate Identification Number (CIN) is the number allotted to a company registered in India by the Ministry of Corporate Affairs, Government of India. CIN is a 21-digit number that contains information such as status, whether listed or unlisted, NIC code of business activity, state of registration, year of registration, whether private or public and the sequential registration number in the respective state (for example, U74110KA2008PTC046914).

When Registered Office Address has to be established?

From the 15th day of registration, company should have a permanent address as registered office receiving and acknowledging all communications and notices.

When the verification of Registered Office Address has to be filed?

Within 30 days of registration, the company has to file a return of verification of registered office with proof of registered office address with Registrar of Companies.

How to file the verification of Registered Office Address?

The verification of registered office has to be filed with the Registrar of Companies along with: 1. Notarized copy of Rent / Lease Agreement in the name of company and Rent paid receipt not older than one month; AND 2. NOC from owner along with proof of ownership like Tax Paid Receipt / Electricity Bill / Sale Deed; AND 3. Any utility bill not older than two months like telephone, gas, electricity, etc. in name of the Owner with complete address of the premises .

When can the Company commence its Business?

A company can commence its business or borrow any money ONLY AFTER filing a declaration to Registrar of Companies confirming the following: 1. The promoters (subscribers to MOA) brought in their agreed share capital to the Company and 2. The company has filed the verification of registered office.

What are the Conditions for filing Declaration for commencement of Business?

Before filing the Declaration for commencement of Business, the Company should that the subscribers to MOA have brought in their agreed share capital to the Company and the company has filed the verification of registered office in prescribed format to ROC.

What is the timeline for filing Declaration for commencement of Business?

Declaration for commencement of Business has to be filed with the Registrar of Companies within 180 days from the date of registration of the company.

What happens if the declaration is not filed in time?

In case the declaration has not been filed by the company with the Registrar within 180 days from the date of incorporation of the company, the Registrar may initiate action for the removal of the name of the company from the register assuming that the company is not carrying on any business or operations.