Planning to start a business in India? Searching the Internet to find all the legal requirements for setting up a company? Here we have covered every aspect to aid you with the process of company formation in India.
A checklist
According to the Indian Companies Act, 2013, you need to adhere to the following conditions for incorporating a private limited company in India.
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Unique name:
The name you choose should be unique and should not be similar to the name of any other company already registered in India.
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Two Directors
A private company should at least have two directors and at maximum, it can have fifteen. One of these directors should be a resident of India.
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Registered office
The registered office does not need to only be a commercial space. You can even use a rented accommodation if you have a NOC from the landlord. The registered office should be located in the state of registration of the company only.
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Minimum Capital Contribution
A private company should have a minimum authorised capital of 1 lakh rupees.
Things to check before Company Registration
The primary and most important step while company registration is to ensure that the proposed name is not the same as any other legal entity in the country. You can check for the name availability digitally through the MCA and trademark database. This is the reason that most promoters prepare three prospective alternative names for their company. However, the final authority rests in the hands of the ministry to decide which name will be approved based on the prevailing rules and regulations.
Here are certain rules to help you further:
- A company dealing with financial activities should have a name about the financial aspects.
- You can change the company name only after three years.
- The name should clarify the principal object of the company.
- The names which include words such as Venture capital, bank, insurance, and mutual funds need regulatory compliance from SEBI, RBI, and IRDA.
- Few names require Central government approval that holds Scheme, National, Prime Minister, Union, Statutory, Federal, and Small Scale.
- A company, for instance, getting established as Nidhi can include “Nidhi Limited” at the end of the name.
A detailed process of registration:
Registration of private companies should increase in India for boosting start-ups and the Atma Nirbhar Bharat Campaign. The rules laid down by the Ministry of Corporate Affairs govern the company formation in India. It is necessary to read all the necessary information before filing the documents and fees. The following are the steps you need to follow for India company incorporation.
- Application for Digital Signature Certificate
- Application for Director Identification Number
- Application for using the preferred name
- Filing of electronic Memorandum of Association and Articles of Association
- Apply for the Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) of the Company
- Obtaining Certificate of Incorporation from the Registrar of Companies of the state where the registered office of the company is situated with PAN and TAN.
- Opening a bank account in the Company’s name.
Necessary Documents for Company Registration
No company in India can be registered without proper scrutiny of necessary documents in the prescribed form. All the directors and shareholders need to provide identity proof along with other documents for incorporation purposes.
Here is a list of documents accepted by MCA for completing the registration process:
- Scanned Copy of Driving License/ Voter’s ID/ Passport
- Scanned copy of Passport and PAN Card (Foreign National and NRIs)
- Scanned copy of the latest electricity bill/ bank statement/ telephone or mobile bill
- Scanned passport-size photograph with a specimen signature
A notarised or apostilled copy of a valid passport must be submitted in case of foreign nationals. The documents demanded residence proof such as bank statements or electricity bills should not be more than two months old.
Registered office formalities
If you want to get a company registered in India, it is necessary to have a registered office in the country itself, and the documents should be filed with the registrar of the concerned state where this office is situated.
For instance, for a company formation in Delhi, the registered office should be situated in Delhi only and the registrar should also be of Delhi. To prove the admittance towards the registered office, you require the following documents.
- Scanned Copy of notarised rent agreement in English (only if the office is a rented accommodation)
- Scanned copy of the latest telephone bill or mobile bill/ bank statement/ electricity or gas bill
- Scanned copy of a Non-Objection certificate from the property owner (only if the office is a rented accommodation)
- Scanned copy of property/sales deed in English (only if the office is self-owned)
These were the various rules and procedures to get a private limited company incorporated in India. For detailed information, you can visit the MCA portal of the government of India.
Wondering about the benefits of registering a private limited company in India?
- Customer base is huge and widespread
- Greater stability
- Diversity of consumers
- Bank credits and investment opportunities are available at a low rate
- Increases growth potential
- Low transportation costs
- Availability of all kinds of labor at a cheaper rate
- Fewer restrictions in the domestic boundaries
- Flexible government regulations
- Business-friendly policies
Still have queries related to company registration in India? Get in touch!
Ms. Priyanka Bhandari is part of the management team at IMC. She has vast experience is Business Consulting in the Middle East region. She spearheaded our Digital Marketing initiatives and her core expertise lies in communications management. With a Masters in Communication she is at the forefront of our Client relationship Management, Media and Marketing Division & Business Development opportunities amongst other responsibilities.
This article does not constitute legal advice.
The opinions expressed in the column above represent the author’s own.
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