An Overview of Company Registration

One of the many essential aspects of running a business is deciding on the legal status of the business entity and acquiring appropriate registration. Incorporating a business as a company has nimiety of benefits attached to it. Companies incorporated under the Companies Act 2013 have a separate legal entity, perpetual existence, higher credibility and directors and shareholders have limited liability. To register a company under the Companies Act 2013, it needs to be registered with the Registrar of Companies as per the guidelines and norms laid down by the Ministry of Corporate Affairs. Depending on the business model, companies receive many benefits and exemptions from the government.

One can obtain a company registration online through the Ministry of Corporate Affairs website.

Benefits of Incorporating a Company in India

As mentioned above, there are many benefits to registering your business as a company over other business models. Some of the many advantages of registering a company with the Registrar of Companies are as follows:

• Separate Legal Entity

A company duly registered is considered an artificial person and has a separate legal entity, which is distinct and wholly different from its members. A company can own assets in its name, incur liability, sue, and be sued in its own name.

• Limited Liability of Members

The liability of the company’s members is limited and extends only to the face value of shares of the company owned by them. This means that if the company is in debt, the responsibility of members to repay that debt extends only to the value of shares held by them and shall not extend to their personal assets.

• Perpetual Existence

Since a company has a distinct legal identity which is separate from its members, it can exist in perpetuity even after the members leave the company. Once incorporated, a company shall continue to survive until it is wound up, irrespective of whether the death or insanity or insolvency or retirement of the founding members or directors or shareholders of the company.

• No Minimum Capital Requirement

There is no minimum paid-up capital required to incorporate a private limited company. A company’s capital structure is flexible and can be altered at any time to receive more funds when needed. It can raise funds either through debentures or through venture capitalists or angel investors.

• Exemptions for Certain Companies

Based on the business model of the company, the Central Government grants certain exemptions to companies which are operating for charitable purposes. NGOs and other not-for-profit organizations registering as Section 8 companies receive many tax benefits and exemptions.

• Higher Market Credibility

A company duly incorporated as per the MCA norms has higher credibility in the marketplace as this ensures that the entity has followed and shall be required to follow specific compliances, making it more trustworthy than other entities. Moreover, suppliers, vendors or investors or other businesses can quickly obtain basic information about the company from the MCA website. This builds confidence in the brand name and enhances the goodwill of the company among entities looking to conduct business with it.

Requirements for Incorporating a Company in India

There are specific requirements which entities need to meet before they can be incorporated as a company, and they are as follows:

• Directors

To be incorporated as a company, it should have a minimum of two directors for a private limited company and a minimum of three directors when it is a public company. It is also required that at least one of the directors has been residing in India for at least a period of 182 days. There must be a minimum of 2 shareholders, while the maximum number of shareholders of a private company can extend up to 200, while there is no upper limit on the number of shareholders in a public company.

• Digital Signature Certificate or DSC Requirement

Shareholders, proposed directors, and other authorized signatories of a company are required to acquire a Digital Signature Certificate or DSC from a certification agency which has been approved by the Controller of Certification Agencies. DSCs are necessary to attest forms and duly submit them on the MCA website during the registration process. It is also imperative to have a valid DSC to apply for a Director Identification Number.

• Director Identification Number or DIN Requirement

Every proposed director of a company is required to have a Director Identification Number or DIN. The DIN can be applied for by filling out Form DIR-3 on the MCA website along with the SPICe+ Form. The Form is to be submitted with valid identity proof, and address proof of the director and the Form must be signed by a chartered accountant.

• Name of the Company

It is imperative to decide on a unique and distinct name for one’s company when applying for registration of the company on the MCA website.

Documents Required for Company Registration in India

Along with many regulatory and legal compliances involved, one needs to submit specific documents while applying for registration with the Registrar of Companies on the MCA website. The registrar scrutinizes the application along with the documents submitted and grants the certificate of incorporation once she is satisfied with the sufficiency of the submissions made. Some of the crucial documents to be submitted are as follows:

• Documents related to the proposed directors of the company

1. PAN card and Aadhar card of the proposed directors.
2. Address proof of the proposed directors like Aadhar cards, utility bills, Voter-ID cards, ration cards, driver’s licenses, passports,
3. Identity proof of directors like driver’s license, voter ID, and Aadhar card.
4. Contact details of the proposed directors along with their Email IDs.
5. Passport-sized photographs of the proposed directors.

• Documents related to the company

1. Proof of ownership of the office space, if any
2. If the office space is on rented premises, then the lease deed.
3. If the office space is on rented premises, then a No Objection Certificate from the landlord is needed.
4. Address proof of the office space, like utility bills.
5. Email ID of the company
6. Draft Articles of Association or AOA and Draft Memorandum of Association or MOA of the company.

1. Document showing the expected income of the company and the expenditure for the next three years with the source of income and the purpose of the spending.

The team of professionals at Corpbiz is well experienced in helping companies prepare the necessary documentation required for the registration process well beforehand to avoid any confusion when applying for registration.

1. Identity proof and address proof of the proposed directors of the company and subscribers who have signed the memorandum of association.
2. Passport-size photographs of the proposed directors of the company.
3. The articles of association and the memorandum of association signed by the subscribers as provided under the Companies (Incorporation) Rules, 2014.
4. Proof of ownership of the office space.
5. If the office space is on rented premises, then the lease deed and a no objection certificate from the landlord.
6. Utility bills for the office space.
7. Details of the registered office space, if any or the office space being used till then.
8. Declaration under Form INC-9 stating that the shareholders and the directors have committed no offence or malfeasance.
9. Document showing the expected income of the company and the expenditure for the next three years with the source of income and the purpose of the spending.

• AGILE PRO Form

The AGILE PRO Form is filed for registration of Goods and Service Tax Identification Number, bank account opening, professional tax registration, and registration with the Employees’ State Insurance Corporation and the Employees’ Provident Fund Organization. Mentioned below are certain documents which are required to be attached along with this Form:

1. Proof of the principal place of business.
2. Identity proof of the authorized signatory for bank account opening.
3. Address proof of the authorized signatory for bank account opening.
4. For EFPO purposes, the signature of the authorized signatory.
5. Copy of the resolution or a letter of authorization passed by the board of directors.
6. Proof of appointment of the authorized signatory for Goods and Service Tax Identification Number.

• Form DIR 2

This Form is filed to intimate the consent of the proposed directors of the company to be appointed as the directors of the company.

• Form DIR 3

This Form is filed to obtain the unique director identification number for the proposed directors of the company.

• Form INC 22

the applicant shall file this Form to provide information pertaining to the registered office space of the company. This Form is required to be filed after the applicant receives the certificate of incorporation from the registrar within 30 days of such receipt.

Procedure for Incorporating a Company in India

The following steps are required to be followed to duly incorporate a company with the registrar of companies:

• Registration on the MCA website

All applicants are required to create a new user account on the MCA website shall be used to make the necessary submissions with the registrar of companies.

• Apply for a digital signature certificate

The proposed directors, shareholders and authorized signatories are required to apply for valid digital signature certificates from a certification agency approved by the Controller of Certification Agencies. Digital signature certificates are imperative 2A test forms on the MCA website during the registration process.

• Apply for a director identification number

once the proposed directors have obtained their respective digital signature certificates, they are required to fill out Form DIR 3 and apply for the unique director identification number. The application has been approved by the registrar of companies, and she shall grant the distinctive DIN to the proposed directors.

• Select a unique company name and reserve it

The next step is to fill out the SPICe+ Form Part A and reserve the company name.

The applicant has to click on the SPICe+ Form under the MCA services tab. One must select the company type, class of company, company category and sub-category of the company. The next step is to give details as to the ‘main division of industrial activity of the company’ The applicant is required to provide two alternative names from which the registrar of companies shall choose the most appropriate name. The forms shall be submitted along with documents as mentioned above and the prescribed fee.

• Duly Fill out SPICe+ Form Part B

Once the company name has been reserved, the next step is to file a new application under the SPICe+ Form Part B along with the requisite documents as mentioned above. The applicant is required to provide details pertaining to the proposed directors and shareholders of the company, information about the company’s registered office and resources of the company. One can also apply for PAN and TAN registrations at this stage.

The applicant is required to conduct a pre-scrutiny check to review the correctness of the information filed under Part B. After the scrutiny check, and the Form can be submitted.

The next step is to download the Part B of the Form to affix the DSCs of the directors or the authorized signatories. There are certain forms which are to be filed along with the SPICe+ Part B form. The forms which are linked to the SPICe+ Form Part are AGILE PRO, SPICe+ MOA, SPICe+ AOA, URC-1 and INC-9.

The applicant must ensure that SPICe+ AOA and SPICe+ MOA forms are filled as per the instructions provided under Schedule 1.

The next step is to upload all the forms on the MCA portal.

• Assessment by the Registrar

All the submissions made shall be scrutinized add assessed by the registrar of companies. If there a star finds any lacuna or error in the application or the documents, it shall give the applicant an opportunity to rectify the error and resubmit the forms again, as stated above.

• Issuance of Certificate of incorporation

After the registrar has reviewed the application along with the details and the documents submitted by the applicant and the registrar is satisfied with the accuracy and completeness of the application, she shall grant the certificate of incorporation to the company. A unique corporate identification number or CIN shall be generated along with the certificate, and this shall be valid proof of the registration of the company.

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