Company form of business is the most common corporate structure in India. A company is a business entity which has its own legal identity and registered under the companies act 2013. Out of the options available to register, private limited company is the most popular type of corporate legal entity registered in India.
Registrations of these companies are overseen by the state ROC office functioning under the ministry of corporate affairs of India. On behalf of these jurisdictional Registrar of Companies, private limited company registration process has been centrally managed by the Central Registration Center located at Manesar.
If you are interested to know how to set up a company in India then this article is for you.
To get started, you need to have a minimum of two shareholders and two directors. One of the directors must be an Indian citizen and Indian resident. A natural person can be a shareholder and director.
Registration procedure for a company in India has been simplified with the introduction of MCA21 i.e. online registration portal of Ministry of corporate affairs. The entire registration process can be finished within a period of 6-7 business days.
Any one planning for company registration in India must follow the defined step by step procedure required by Ministry of corporate affairs. Before starting the step by step process of private limited company registration, let us first look into to types of company that can be formed in India.
Type of company in India
The most important part of company registration procedure is to select the type of company that you want to incorporate. As per the present companies act 2013, only four types of companies can be registered with Ministry of Corporate Affairs (MCA);
- Private Limited or Pvt Ltd or (P) Ltd
- Public Limited
- One Person Company or OPC in India
- Registration Under section 8 of the Companies Act, 2013 (Non-Profit Organization).
In the initial step you need to choose the type of company that you want to register. Your decision for registration depends on your business requirements and the resources available to you.
In this article, we have restricted our discussion only to the registration process of a private limited company in India.
After registration a company uses the word “private Limited” or (P) ltd. or “pvt ltd” or “ltd” at the end of its name to represent the type of company that is registered with ministry of corporate affairs. Out of which “private Limited” or (P) ltd. or “pvt ltd” is used by a company registered as a private limited.
Applying For Digital Signature Certificate (DSC)
For online company registration, various application forms are required to be signed electronically by either of the directors. Digital signature certificate (DSC) is required to sign memorandum of association, Article of association and registration document to be filed with ROC. You need to obtain digital signature in the name of all subscribers and one director. If subscribers are going to be appointed as directors, then separate DSC is not requried.
Digital signature can be obtained from any authorised agent by submitting PAN, Aadhar and one photo along with the application form. In addition to these documents, you are also required to verify your mobile number, email id and upload a video clip for your identification. For verification and other assistance you can take help of the authorised agent or from the person who is engaged in your company incorporation process.
For company registration requirements, class 2 digital signature certificate (DSC) is required. You can get a digital signature certificate from following organizations;
Applying For Company Name
The foremost thing in company registration process is to check for name availability. The company is named before its birth. In the first step of company registration, you are required to apply for company name. Digital signature can be processed simultaneously while applying for company name as its not required to use DSC while applying for name approval.
You can provide up to 2 names on priority for approval. In case of rejection, opportunity will be provided for re-submission. Please remember, ROC will approve the name that has given highest priority if it’s available.
It’s not mandatory that you have to compulsorily give 2 alternative names. If you are 100% sure that the name of the company is available then you can apply with one name.
Your name may get rejected because of trademark issues. Before applying, you need to check it online to know whether your desired name is available for registration.
You are not required to provide any kind of documents while applying for name approval. However, if you have trademark registration, then a self attested copy of trademark registration certificate can be attached with the application.
Getting your desired name approved is a vital point in the whole process of company registration. Generally, government will take 2-3 working day for giving approval. After getting approval, your next step for company registration will start.
Link to check company name availability at MCA Site.
Draft MOA, AOA and other legal documents
Your next step in company registration procedure after name approval is to draft memorandum of association (MOA) and Article of Association (AOA). You can also start the process while applying for name approval or before that. After getting your name approved, you can change the name clause and process it for final registration.
Memorandum of association or MOA will have company’s main objective of registration in addition to following things;
- Name of the registered entity
- Registered office address
- Authorised share capital
- Information of first shareholder and number of shares allotted to them.
Object clause of the Memorandum of association will indicate the business objectives for which you are forming your company. You cannot carry any other business if it’s not specified in the object clause of MOA.
Article of Association or AOA is the by-laws of your company. According to this document directors and other officers are required to perform their duties. This means, Article of Association will specify the rules and regulations that the company will follow along with other applicable laws while carrying on its business.
Along with all the rules and regulations, you are required to check who has been appointed as director of the company if it’s mentioned in it and details of shareholders at the end.
These two documents are vital for company registration and you must go through and ask your Chartered Accountant or CS to make necessary changes that are required for your business or else take their opinion to understand it better.
There are some more documents which are required based on the types of company you register and place of registration. To understand it better you can avail professional services of a chartered accountant or CS for drafting MOA, AOA and other documents.
Shareholders need to specify their name, address and occupation on the last page or subscription page of the Memorandum and article of association before applying for company registration. E-MOA and E-AOA need to be signed with DSC of the respective subscribers and the CA or CS appointed by you.
Apply for Company Registration
With your name, now you are ready to follow the final step in company registration process.
In this last step of company registration, you need to upload registration form along with e-MOA, e-AOA to MCA site. These forms are to be digitally signed by respective person by using their DSC. INC-22 can be filed within 30 days after the company registration .
Here is the list of forms filed with government for approval:
- Registration Form (For incorporation and filing of other legal documents)
- INC-22 (Notice of the situation of registered office which can be filed within 30 days of registration)
- E-MOA – Its company’s Memorandum of Association to be digitally signed by subscribers and One witness
- E-AOA – It’s company’s Article of Association to be digitally signed by subscribers and One witness
If everything goes well, then within 3 to 5 working days you will get your incorporation certificate delivered to your e-mail Inbox.
At the time of uploading, you need to pay requisite fee as applicable based on the authorized capital of the company mentioned in the registration form.
With these steps your private limited company registration will be over.
Director identification number or DIN is a unique number issued by the ministry of corporate affairs to all new or existing directors. If any of your director has their own DIN issued, then they can use the same or else while applying for registration, it will automatically get issued based on the documents submitted along with the registration form. You need to attach documents of the director for which DIN has not been issued with the registration form.
As suggested earlier, you can engage a practicing chartered accountant or CS for this process who can help you in completing all legal formalities. We suggest you to engage a chartered accountant or company secretary or cost accountant before starting the incorporation process.
After getting your certificate of incorporation, you have to appoint first auditor and comply with all other things that are required by the Companies act 2013.
- How to get Director Identification Number (DIN)
- Minimum requirements for a Private Limited Company
- Job of a Chartered Accountant in company registration process
- How much i have to incur in my company registration
- Company Name Approval Process
- What is Memorandum Of Association
- What is Article Of Association
- How to open a current account for your company
- How to start one person company or OPC in india