Dear readers, as we all know, know a day youngster are giving preference to start their own venture instead of doing jobs. Some of them have a unique scalable idea for which they require external funding like seed funding from investors. As per data available on MCA portal even during Covid period a large number of companies were registered. If you need seed funding for your venture then incorporation of private limited is a good option for you. In this article we will discuss about the process of incorporation of private limited company, its compliances and benefits.
First of all, we have to check the availability of company name which we want to incorporate, which can easily be search from MCA Website.
For incorporation of Private Limited Company minimum 2 Members are required. While searching name of your name, you have to take into consideration Section 4 (2), 4(3) of Companies Act 2013, read with Rule 8 of The Companies (Incorporation) Rules, 2014.
After searching name of your company, you have to apply for its name Approval from MCA. For this you have 2 Options. You can apply online through RUN Form after login into your MCA Portal Account.
In this form you have to give details of your 2 Proposed name of your company and have to make payment of Rs.1000/- online. In this case either your name will be approved or rejected/objected. If your name is rejected then you have to resubmit the form within 15 days.
2nd Method is, you can apply in SPICe Form (Simplified Proforma for Incorporating Company Electronically), in which you can directly apply for Name approval or if you have already applied name approval through RUN Form and your name is approved then you have to mention SRN Number of that approved RUN Approve.
While applying through SPICe Form (INC-32), e-MOA (INC-33) and e-AOA (INC-34) are to be filed simultaneously, declaration by First Subscriber and Director along with Address proof of the premises and copy of Utility bill (not older than 2 Months). Please note that Stamp duty has to be paid online according to paid up capital of company.
In SPICe form, you can apply for 1 Proposed name, so it is suggested that, firstly apply for Name approval in RUN Form which cost Rs.1000/- and then further apply in Form SPICe.
Through SPICe form you can directly apply for PAN Number, ESI, EPF & GST Registration and DIN Approval of Maximum 3 Directors is allowed through SPICe Form.
When digitally signed SPICe form is submitted to Concerned ROC, officer will scrutinize the attachments and filed detail, if he is satisfied then he will approve the form and issue incorporation certificate in Form INC-11.
If he needs some more information, then they give intimation to the applicant to remove the defects and re-submit the e-form within 15 days from the date of such intimation given by the registrar.
In case of incorporation of Private Limited company minimum 2 Shareholder and 2 directors are required and there KYC is required
♦ PAN Card Copy
♦ Aadhar Card/Voter ID/ Passport Port/ Driving License Copy
♦ Last 2 Months Bank statement (If Available)
♦ Mail id and Mobile Number
♦ Digital Signature of the Proposed Directors
♦ And Copy of Electricity bill along with NOC/ Rent Agreement of the premises, which will be the registered office of the company after incorporation.
√ Intimation of registered office to MCA (Applicable in case address shown at time of company incorporation is different from actual office)
√ Conduct of 1st Board meeting within 30 days of incorporation and appointment of First Auditor and intimation of same to MCA in Form ADT-1
√ Issuance of Share Certificate and Opening of Bank Account within 60 Days
√ As per Sec- 10A, every newly incorporated company having share capital shall not commence any business or exercise any borrowing powers unless Form INC-20A is filed within 180 days
√ Conduct of Board meeting at regular intervals and preparation of Minutes of these Meetings
√ Filing of Form MSME on half yearly basis (If Applicable)
√ If any special resolution is passed then company is required to file MGT-14
√ Reporting of advances and deposit in form DPT-3
√ Director’s KYC in Form DIR-3
√ Preparation of Minutes of Board Meeting, EGM and AGM
√ Preparation of statutory registers such as Members Register, Register of Charge, Shareholder Register etc
√ Conduct of Statutory Audit as per Companies Act, Tax Audit as per Income Tax Act and GST Audit as per GST Act (as applicable)
√ Preparation of Financial Statement and reporting of the same in MCA in Form AOC-4 And MGT-7
√ No minimum capital required
√ Company has a separate legal entity
√ Limited liability of Shareholders
√ If company has a unique idea which is scalable in nature or doing business that can create large number of employment then the company is allowed to register under Startup India Scheme of Government where they get recognized from DPIIT and gets access to seed funding and other benefits in the form of lower fee in case of Patent registration, trademark registration, tax exemption (if approved) for 3 years
√ If company is recognized by DPIIT then there is relaxation related to labour law compliances
√ Creates credibility in the mind of debtors, creditors and external stake holders
This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. This article is written on the basis of author’s person experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers.
The Author can be reached at mail –[email protected] and Mobile/Whatsapp – 9911303737/ 9716118384