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Step-by-Step Guide to Incorporating a Company in India

Incorporating a company and doing a company regitration in India under the Companies Act, 2013, and the Companies (Incorporation) Rules, 2014 can be straightforward if you follow the right steps. This guide will walk you through each stage of the process, from checking the availability of your company name to receiving the Certificate of Incorporation. A company conducting its primary operations in India must obtain a registration certificate from the Registrar of Companies (ROC) to legally operate its business. The ROC grants the registration certificate upon verifying that the company complies with all relevant provisions of the law.

The Ministry of Corporate Affairs (MCA) hasintroduced a new company incorporation form, i.e., Simplified Performa for Incorporating a Company Electronically The SPICe+ form was introduced on 23 February 2020 for the incorporation of new companies. This form is mandatory for all companies incorporated after the specified date in order to streamline the incorporation process. The company founders should submit their application for company registration on the MCA website in India.

Pre-requisites for Company Registration in India

Before filing the company incorporation form, certain pre-requisites must be complied with:

  • Digital Signature Certificate (DSC): The company registration in India process is entirely online, requiring the SPICe+ form to be filed on the MCA website. All proposed directors and subscribers of the Memorandum of Association (MoA) and Articles of Association (AoA) must obtain a DSC.
  • Selection of Name: A name must be selected, an appropriate name that is not similar or identical to any already registered company or trademark. Conducting a trademark search on the IP India website is crucial to avoid legal issues and ensure the uniqueness of the name. The name should also comply with the Companies (Incorporation) Rules, 2014. The reservation of the company name should be applied for first.

Step 1: Check the Company Name

The first step is to ensure your desired company name is available and complies with the relevant laws. Here are the key guidelines:

  • Uniqueness: Your company name must not be identical or similar to any existing company names. This prevents confusion and protects the identity of your brand.
  • No Plural Forms: Plural versions of existing names are not allowed.
  • No Case or Punctuation Changes: Simply altering the case, spacing, or punctuation of an existing name is not acceptable.
  • No Combining Words: Joining two or more words from existing names will be rejected.
  • No Translations: Using translations of existing company names is prohibited.
  • Approval for Specific Terms: Names including terms like Bank, Insurance, Stock Exchange, and Mutual Fund require approval from relevant regulatory bodies in India.

One must check their proposed name on the MCA Portal.

Step 2: Obtain Pre-Registration Documents

Before you begin the online registration process, gathering the necessary documents ensures a smooth application process.

  • Digital Signature Certificate: According to the Information Technology Act, 2000, and the Companies Act, 2013, DSCs are required for all proposed directors and subscribers of the MoA and AoA. You can obtain a Class 3 DSC from government-recognized certifying authorities. This process can take about two days.
  • Director Identification Number (DIN): As per Section 153 of the Companies Act, 2013, anyone intending to become a director must obtain a DIN. You can apply for a DIN while filing the SPICe+ form.
  • Memorandum of Association and Articles of Association: The MoA outlines the company’s objectives and the scope of activities, while the AoA details the internal rules and regulations governing the company. These are crucial documents as per Sections 4 and 5 of the Companies Act, 2013 and without them no company registration in India can take place.

Step 3: Select Your Business Type

Choose the structure that best suits your business needs. Here are the main types:

  • Private Limited Company (PVT LTD): A private entity with shares held by private investors. Profits and liabilities are borne by the company. Governed by the Companies Act, 2013, it offers limited liability to its shareholders.
  • Partnership Firm: Formed by two or more individuals who share profits and losses. Governed by the Indian Partnership Act, 1932.
  • Limited Liability Partnership (LLP): Combines elements of partnerships and corporations, providing limited liability to partners. Governed by the LLP Act, 2008.
  • Sole Proprietorship: Owned by a single individual, with no distinction between the owner and the business.
  • One Person Company (OPC): Allows a single individual to incorporate a company with limited liability. Introduced by the Companies Act, 2013, to encourage individual entrepreneurs.

Step 4: Online Company Registration

With your documents in hand, you can proceed with company registration online through the MCA Portal. Here’s how:

  1. Create an MCA Portal User ID: Register as a user on the MCA Portal. Only directors who have obtained DIN can create an account.
  2. Fill Out the SPICe+ Form: This integrated web-based form facilitates various services, including name reservation, incorporation, DIN allotment, PAN and TAN application. The form is divided into two parts:
    1. Part A: Name reservation. Submit two proposed names to ensure your company’s name is unique and complies with the rules.
    1. Part B: Incorporation details. Provide information about the company, its directors, and its registered office. Attach required documents and DSC.

If the name is not approved, you will need to refile Part A of the SPICe+ form with a new proposed name and pay the prescribed fee. Once approved, the name is reserved for 20 days, within which you must complete and submit Part B of the form.

Step 5: Receive the Certificate of Incorporation

After submitting the SPICe+ form and all required documents, RoC will review your application. If everything is in order, the RoC will issue the Certificate of Incorporation, which includes your company’s PAN and TAN.

The Certificate of Incorporation is a significant milestone, officially recognizing your company registration as a legal entity. You will receive this certificate via email along with the PAN and TAN allotted by the Income Tax Department.

Incorporation Kit Forms

Company Registration in India requires several forms which must be completed and submitted as part of the process. Each form serves a specific purpose and ensures compliance with the relevant laws.

  • INC-22: This form is used to notify the Registrar of Companies (ROC) about the address of the registered office of the company. It must be filed within 30 days of incorporation. The form includes details about the location of the registered office and proof of address.
  • INC-20A: This form is a declaration for the commencement of business. It must be filed within 180 days of incorporation and confirms that every subscriber to the Memorandum of Association has paid the value of the shares agreed to be taken by them.
  • SPICe+ (INC-32): It is an integrated form used for incorporating a company, obtaining a Director Identification Number (DIN), and applying for PAN and TAN. This form streamlines the incorporation process by combining multiple services into one application.
  • INC 33 (e-MoA): The electronic Memorandum of Association (e-MoA) outlines the company’s objectives and the scope of its activities. It is a crucial document that defines the company’s purpose and its relationship with shareholders.
  • INC 34 (e-AoA): The electronic Articles of Association (e-AoA) contain the internal rules and regulations governing the company. It includes details about the management of the company, the rights and responsibilities of directors and shareholders, and procedures for decision-making.
  • AGILE-PRO-S (INC-35): This form, which accompanies the SPICe+ form, is used to apply for various registrations required for the company, including Goods and Services Tax Identification Number (GSTIN), Employees’ Provident Fund Organisation (EPFO), Employees State Insurance Corporation (ESIC), Professional Tax Registration (in applicable states), and opening of a bank account.

Documents Required for Company Registration in India

Documents of the Company’s Promoters:

Promoters are the first shareholders and directors involved in the establishment of the company. They must submit scanned, self-attested copies of the following documents:

  1. PAN Card
  2. Aadhaar Card
  3. ID Proof – Indian promoters must provide a valid ID proof such as a Driving Licence, Voter ID, or passport. Foreign promoters are required to submit a passport as their mandatory ID proof.
  4. Address Proof – For address proof, promoters should submit a recent utility bill or bank statement in their name, displaying their current address. The document must not be older than two months.
  5. Digital Signature – A Class 3 Digital Signature of the authorized director is necessary to electronically sign the application for Company Registration in India.

Documents of the Registered Office:

The registered office is the official address of the company and is used for all legal correspondence. The following documents related to the registered office must be submitted:

  • Proof of Registered Office Address – You can submit a utility bill in the company’s name that displays the registered office address. The address proof should not be more than two months old.
  • No Objection Certificate (NOC) – An NOC from the owner of the registered office premises is also necessary.

 

Frequently Asked Questions

  1. How many days does it take to do company registration in India?
    • In India, registering a Private Limited Company typically takes 10-18 working days, provided all required documents are submitted, and there are no complications.
  2. How much does it cost for company registration in India?
    • The cost of incorporating a Private Limited Company ranges from Rs. 6,000 to Rs. 30,000, depending on the number of directors and other factors.
  3. What is the correct sequence of formation of a company?
    • The process of company formation is divided into four stages: Promotion, Incorporation, Capital Subscription, and then Commencement of Business.
  4. Can a company commence business before incorporation?
    • No, a company can only commence its business and earn profits after it has been issued a company registration in India certificate and is officially incorporated.

Conclusion

Company Registration in India involves a series of well-defined steps guided by the Companies Act, 2013, and the Companies (Incorporation) Rules, 2014. By following this step-by-step guide and ensuring all necessary documents are prepared, you can successfully navigate the incorporation process. For more detailed information on specific types of companies, check our articles on incorporating a One Person Company, Private Company, Public Company, and LLP. With the team of professionals at InstaFiling, you can leverage expert guidance and support throughout the entire incorporation journey. Our expertise ensures that your company registration in India is handled efficiently, meeting all legal requirements seamlessly.

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