INTRODUCTION
To run a company, it’s not just necessary to establish the company and leave it like that, rather how it will operate is also important. The Companies act of 2013 was introduced for incorporation, regulation, and management of companies. The registration of the company constitutes legal recognition of the corporate entity under company law. The procedure for registration is explicitly delineated in Section 7 of the companies Act 2013.
The incorporation of a company constitute a pivotal undertaking, bestowing substantial legal safeguards, prospects for scalability, and bolstering consumer confidence. furthermore, registration facilitates the establishment of a robust regulatory framework, ensuring adherence to compliance mandates and augmenting the entity’s standing in the marketplace.
A company established in India cannot runs its business without the registration certificate granted by the Registrar of Companies. The Registrar of Companies shall confer the certificate of registration upon the company subsequent to its adherence to the stipulation set forth in the act.
This article dives into the step by step registration of Companies under the Companies Act 2013 and its rules and regulations.
TYPES OF COMPANIES
The promoters must determine the type of company they intent to establish. The various classifications of companies include :
Private Company : A private company is delineated under Section 2 (68) of the Companies Act 2013 and may be constituted by two or more individuals.. This classification restricts the maximum membership to 50, curtails the transferability of shares among its members, and forbids the issuance of shares to the public.
Public Company : A public company is defined under Section 2 (71) of the Companies Act, 2013. It is characterized as a company that is not classified as private and possesses a paid-up capital of Rs 5 lakhs or more. A minimum of seven members is requisite for the formation of a public company.
DIRECT IDENTIFICATION NUMBER OR DIRECT SIGNATURE CERTIFICATE
The commencement of the corporate registration procedure is contingent upon the acquisition of the Director Identification Number and the Digital Signature Certificate for the company’s promoters or directors.
The DIN functions as a singular identifier for directors and is indispensable for the submission of the company registration application. The methodology for procuring a DIN is meticulously expounded upon on the Ministry of Corporate Affairs website.
Conversely, the DSC is imperative for safeguarding the security and authenticity of electronically submitted documents. Serving as the digital analogue to physical certificates, a DSC authenticates and certificates the identity of the individual executing the filings via the MCA portal. It is imperative to apply for a class 3 category DSC, specifically designated for registrations pertaining to companies or Limited Liability Partnerships.
RESERVE COMPANY NAME
Selecting an appropriate nomenclature for your enterprise is of paramount importance, as it encapsulates the essence and principles of your business. The proposed appellation must be distinctive and must not infringe upon any extant trade marks or corporate designations. In this context, the MCAs SPICE Plus PART A form instrumental.
Submit an application via the SPICE Plus PART A form, proposing up to two potential company names. Each application incurs a nominal governmental fee of Rs 1000. Following a comprehensive evaluation, the Registrar of Companies (ROC) will reserve the name deemed valid and available for your enterprise.
DRAFTING THE MOA,AOA
The Memorandum of Association (MOA) and Articles of Association (AOA) serve as the foundational charter and internal governance framework of your company, respectively. The meticulously drafting of these documents is critical, as they delineate the company’s operational scope and the regulations guiding internal management.
The MOA articulates the company’s objectives, while the AOA stipulates the protocols for its quotidian operations.
SUBMISSION OF THE SPICE PLUS APPLICATION
Upon securing name reservation, the subsequent step entails the submission of the SPICE Plus Application (INC-32), which serves as an integrated mechanism for company incorporation. This application can be meticulously completed and submitted through the MCA’s online portal. It encompasses a suite of forms that address all aspects from name reservation to DIN allocation, thereby facilitating a streamlined and efficient incorporation process.
OBTAIN THE CERTIFICATE OF COMPANY REGISTRATION
Upon the successful submission and meticulous processing of SPICE Plus application, accompanied by all requisite documentation and fees, the Registrar of Companies (ROC) undertakes a through examination of the application. Should all elements conform to regulatory standards, the ROC proceeds to officially register the entity, thereby issuing a certificate of registration.
This certificates serves as definitive evidence of your company’s legal existence, encapsulating the Corporate Identification Number (CIN). Concurrently, the newly constituted entity is allocated its Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN).
This comprehensive guide delineates the procedural framework requisite for the formal registration of your enterprise. Each phase must be executed with meticulous attention and due diligence, ensuring that all submitted information is precise and compliant with statutory obligations.
ESSENTIAL DOCUMENTATION FOR CORPORATE ESTABLISHMENT
The procurement of requisite documentation is paramount in the corporate registration continuum. Insufficient or erroneous documentation may precipitate delays or outright rejection of the application.
The following items are indispensable:
Documents from Promoters
PAN Card : Mandatory for Indian nationals, serving as principal identification.
Passport : Required for foreign national promoters.
Address Verification : Recent utility bills (not exceeding two months), Aadhaar Card, voter ID, or passport.
Photographs : Passport-sized images of all directors and shareholders.
Registered Office Documentation
Proof of Registered Office Address: This includes a recent utility bill or a lease/rent agreement, accompanied by no-objection certificate from the landlord.
Legal Instruments Forms
Memorandum of Association and Articles of Association : These foundational legal documents delineate the company’s constitution.
DIR-2 : Written consents from the directors.
INC-9 : A declaration by the initial subscriber and director.
INC-14 : A professional declaration certifying adherence to all statutory compliances.
The advent of the SPICE Plus form (INC-32) has significantly streamlined this process, amalgamating multiple forms into a singular entity, thereby mitigating the bureaucratic burden associated with corporate registration.
DURATION FOR THE COMPANY INCORPORATION PROCESS IN INDIA
The duration for the company incorporation process in India is subject to variability, generally spanning approximately 10 to 15 working days from the date of application submission, contingent upon the absence of discrepancies or complications within the submitted documentation. This timeframe is a mere approximation and may fluctuate based on several factors:
1. The operational load of the Registrar of Companies (ROC).
2. The thoroughness and accuracy of the submitted application.
3. The time required to procure necessary clearances or responses.
BENEFITS OF COMPANY REGISTRATION IN INDIA
The incorporation of a company in India confers a plethora of advantages, rendering it an attractive locus for entrepreneurs and enterprises. The following delineates several pivotal benefits:
Limited Liability Protection : This constitutes a paramount advantage of corporate registration, particularly for Private Limited Companies and One Person Companies. It ensures that the liability of shareholders is confined to their respective capital contributions, thereby insulating their personal assets from the encumbrances of business debts and obligations. This safeguard provides a formidable buffer for entrepreneurs.
Separate Legal Entity: A registered entity acquires a distinct juridical persona, independent of its proprietors or shareholders. This delineation empowers the company to engage in contractual agreements, procure assets, and partake in legal proceedings under its own aegis. This attribute is indispensable for for cultivating a professional business facade and engenders a heightened sense of trust among stakeholders.
Enhance Credibility and Trust : Business registration solidifies a company’s credibility among customers, suppliers, and partners. It signals a serious commitment to legal compliance and adherence to regulatory standards, fostering increased trust and confidence in the enterprise.
Greater Access to Funding : Registered entities are statistically more likely to secure financing from diverse sources. Financial institution regard these businesses as more dependable borrowers, while venture capitalists and angel investors show a marked preference for companies that possess the legitimacy and transparency afforded by registration.
Tax Benefits and Incentives : The Indian government extends various tax advantages to registered firms to stimulate entrepreneurship and growth. These incentives may encompass deductions, exemptions, and targeted benefits designed to bolster specific sectors. Moreover, the corporate tax rates for certain businesses can be more favourable than personal income tax rates, presenting a significant financial edge.
