Have you decided to Incorporate a Private Limited Company but are not sure about the steps involved? Not to worry! In this article, we will navigate you through the steps for forming a private limited company in India taking approval from the Registrar of Companies (ROC) which is now working under the aegis of the Central Registration Center (CRC) with the Ministry of Corporate Affairs of India by considering the provisions of the Companies Act, 2013 (the Act).
The definition of a private limited company (company) covers the following points:
- The shares are not freely transferrable;
- Minimum 2 persons are required to hold the shares of the company;
- The maximum number of members is limited to 200; and
- The general public cannot be offered shares of the company.
A private company can be
- a company limited by shares; or
- a company limited by guarantee; or
- an unlimited company.
FOLLOWING ARE THE STEPS TO INCORPORATE A PRIVATE LIMITED COMPANY LIMITED BY SHARES.
Basic requirements
Before applying for registering a Company, some of the points to be considered are:
- Deciding the number of initial shareholders i.e. the subscribers and the capital contribution to be brought in by them
- Number of Directors (the minimum number being two)
- Obtaining Digital signatures for certifying the e-forms for each promoter
- Finalizing the capital structure (authorized share capital, paid up share capital, the value of each share etc.)
- Structuring the main object of the Company
Name Approval
Since the Company Law does not allow names which are identical to an existing company, the applicant needs to check whether the desired name is available on the MCA site. Further, in order to avoid trademark conflicts in future, it is also suggested to check if the desired name bears any resemblance with any existing trademark in the TM Class for the activities that the company wants to pursue post incorporation
After passing the above checklist, the applicant can either apply for
- Name reservation initially and then proceed with the incorporation application; or
- Apply for name reservation along with the incorporation application
For reserving the desired name, the applicant needs to fill out the form named SPICe+ Part A. After filing and submitting the said form, the ROC can either accept or return the same with resubmission remarks citing the reasons why names are not available wherein the applicant has to satisfy the ROC Remarks diligently on its ground or modify the name.
After resubmission of the name, the ROC can either accept or reject the application. If the application is accepted, the applicant can move ahead with the submission of the incorporation form within 20 days of approval. Before the expiry of the name approval, the applicant can also file for an extension of up to 60 days with additional fees to be paid to MCA.
The application for Incorporation
After the name is approved, the next step is the submission of the incorporation form named SPICE+ (INC-32) with eMOA (INC-33) and eAOA (INC-34). Since all the forms are web-based forms, one is required to enter the details by logging in to the MCA site. After all the details have been entered, the form can be downloaded for affixing DSCs. The signed form is then required to be uploaded on the MCA site.
Note: There are certain situations where eMOA and eAOA are not allowed. In those cases, the applicant has to submit physical copies of MOA and AOA.
Attachments
The incorporation form will ask for the following attachments/information
- Memorandum of Association in the e-form eMOA (INC-33) and Articles of Association in the e-form eAOA (INC-34) of the company signed by each initial shareholder and a witness;
- Declaration in the form INC-8 by an advocate, a chartered accountant, cost accountant or company secretary in practice that all the requirements of the Companies Act,2013 have been met with;
- Declaration by a proposed director, manager or secretary of the company that the submitted application has complied with the relevant provisions of the Companies Act, 2013;
- Declaration by the proposed directors and the subscribers to the memorandum (initial shareholders) stating that
- they have not been convicted of any offence while promoting, forming or managing any company;
- they have not been found guilty of any fraud or misfeasance or of any breach of duty to any company under this Act or any previous company law during the preceding five years; and
- all the documents submitted to the ROC for the formation of the company contain true information.
- Proof of address for correspondence or registered address of the company
- Detailed information about the subscribers and directors of the company as per the specified format
- Proof of address and identity of subscribers and directors
Payment of fees
After uploading the signed form on the MCA site, payment of the applicable fees is necessary so that the application moves forward. Once the payment is successful, the application proceeds further for scrutiny. PAN and TAN fees in all cases are same which is Rs. 131/- and stamp duty is subject to change with each state or UT.
Resubmissions, if any
The ROC can ask for further clarification/information or ask to correct entered details by sending queries to be addressed within a given timeline. The applicant will be asked to resubmit the form with the asked changes for further process.
Approval with COI and other approvals like PAN, TAN, GST, EPF etc.
The ROC on satisfying itself with the details accept the application and approves the form. On the approval of the form, the applicant receives details on the registered email id like the Certificate of Incorporation, E-PAN, E-TAN, E-GST certificate (if applied for) etc. The registered company is provided with a unique identification number known as a Corporate Identity Number (CIN) to be used in all further correspondences.