Company registration is also known as the incorporation of a company or the formation of a business that makes the business a distinguished entity and gives it a legal existence. All companies operating in India are required to register with the Registrar of Companies (RoC), a department working under the supervision of the Ministry of Corporate Affairs (MCA). MCAdeals with the companies registration formalities in India and the registration process are legally governed by The Companies Act, 2013.
Types of Companies:
- One Person Company– When there is only one owner
- Limited Liability Partnership – Partners limited only to their level of contribution
- Private Limited Company – A separate legal entity which has shareholders and directors
- Public Limited Company– Incorporated under company law has separate legal existence and the liability of its members are limited to shares they hold
Basic Requirements to Incorporate a New Company
Name for Company or Business:
Company Name: Company or business name should be identified, which must be unique and describe the services or the products associated with the company or business. It will always better to have 5-6 names, in case of a resemblance with the already existing company/business. Further, domain name availability must also be searched to easily register the website and to boost the online presence.
Company Name Search: A company name search should be performed to identify if there is any other company or business is operating under the same or similar name or any other existing trademark. Care must be taken that the identified business name complies with the MCA naming guidelines.
Charter Documents with the Appropriate Stamp Duty:
Memorandum of Association (MoA): The MOA contains all the details of the registering company required during the incorporation process.
Articles of Association (AoA): This document specifies the rules and regulations laid by the company. It provides details about the management, conduct, and bye-laws governing the internal affairs of the company.
Documents Required to Incorporate a New Company:
- Passport size photograph
- PAN Card Copy (mandatory)
- Proof of Identity (Any one of the below)
- Aadhar Card
- Driving License
- Voter ID
- DIN of all the directors of a proposed company
- Digital Signature Certificate(DSC)
- Form-1 for the incorporation of a company
- Form-18 for the situation or address of the proposed company. The company must have a registered office in India. Acceptable documents are the Latest copy of an energy bill or water bill or the property tax receipt, tenancy agreement, the maintenance bill or the sale deed, or a letter from the landlord with his/her permission to use the office.
- Form-32 for particulars of proposed directors, managers, and secretary
- Original copy of the formal letter issued by Registrar of companies (ROC) regarding the availability of Company name
Advantages of Incorporation:
- The company becomes a legal entity and is recognized as a person under the law. It can take the stance of a person that has the right to sue and be sued.
- The company acquires the perpetual succession, which means the company can be everlasting till dissolved legally.
- Shares can be transferred or sold freely unless and until there is an agreement to regulate the transferability of the shares.
- Banks and other financial institutions prefer to lend to incorporated companies. The borrowing capacity of the companies is valued based on the incorporation and the companies have many advantages while raising equity.
Author: Govindhaswamy Srinivasan, a Principal Associate – Patents at Khurana&Khurana, Advocates and IP Attorneys. In case of any queries please contact/write back to us at email@example.com