A Private Limited Company can be incorporated in India by a minimum of 2 Promoters/ Subscribers, who need to be an Indian Resident. The Ministry of Corporate Affairs has made the filing of incorporation documents mandatory, and through the electronic mode. This can be done through the online portal of Ministry of Corporate Affairs http://www.mca.gov.in
Prior to initiation of incorporation of a Company the following are the pre–requisites which will need to be obtained by the applicant. This can be outsourced to a Chartered Accountant (CA)/law firm that can connect you to a CA.
- Digital Signature: The Information Technology Act, 2000 provides for use of Digital Signatures (DSC) on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. The DSC is generally in the form of a thumb-drive or electronic file which allows a person to digitally sign the documents. The MCA has provided a list of certifying authorities that can issues a DSC.
- Director Identification Number: Director Identification Number or DIN is a unique identification number for identifying a person intending to become the director of the proposed company. You may read the steps prescribed on MCA and download the applicable forms.
Name Approval – Form No. INC 1
- The first step is to file an application in Form INC 1 with the Registrar of Companies (RoC) online for confirmation and approval of the proposed name of the Company name.
You would need to list, in order of preference, six names indicative of the main objects of the company along with the description of any special coined term.
Note: Prior to filing Form 1A, we recommend you go through the guidelines specified in the Companies (Name Availability) Rules, 2011 and the MCA. The proposed name of the Company shall not be identical to or resemble the name of an existing company, names already approved by the Registrar of Companies or registered trade-mark or a trade mark for which an application is filed under the Trade Marks Act, 1999.
- Additionally, you will need to provide the following details in Form INC 1:
- Details of the Promoters and director of the proposed company
- Main objects to be undertaken by the proposed company
- The name approval is valid for a period of 60 days which can be extended for a further period of 30 days.
On approval of Form INC 1, the charter documents namely Memorandum and Articles of Association will need to be drafted.
For incorporation of the proposed Company Forms INC 7, 22 and DIR 12 need to be filed simultaneously. The requirements of the these Forms are as follows:
Form INC 7 – Application and declaration for incorporation of a company, with particulars of the Promoters, along with signed copy of the Memorandum and Articles of Association.
Form INC 22 – Details of the proposed registered office of the company
Form DIR 12 – Particulars of proposed directors; consent letter of the proposed directors will be filed as an attachment
The registration fee for filing Form INC 1 is based on the authorized capital of the Company.
The new Companies Act also requires certain declarations and affidavits from certain key people of the Company. This includes filing:
Form INC 8 – Declaration by professionals
Form INC 9 – Affidavit from Subscribers and First Directors
Form INC 10 – Specimen signature and Photo (verified by a banker or a notary)
Form DIR 2 – Consent of First Directors
Once the forms are scrutinized (and if there are no errors in the filing or in the attachments),the ROC will register the company and issue a Certificate of Incorporation on which there will be a twenty-one (21) digit Corporate Identity Number (CIN). CIN is unique number allocated to each company incorporated.
The requirement of the Commencement of Business Certificate for a private company before it can start business has been done away with.
The Ministry of Corporate affairs has also introduced an alternate process for incorporating a company. The introduction of the new Form INC 29 collapses all the various forms required to be filed under the original procedure (detailed above) into one single form.