“Looking for some business plan!!!!!!!”
“Then why not to start with a private limited company, Today I am going to discuss with you all the relevant aspects of incorporation of a company because it is always prudent to incorporate a company for a long run, moreover our government is also promoting corporate culture by reducing compliances day by day by introducing integrated and versatile forms along with simplified guidelines in this emerging era to simplify and accelerate the procedure.”
As we know there are many types of companies which can be incorporated through our governing law, Private Limited Company is also one of them which is the most prevalent and popular type of corporate legal entity in our country, as we all know Private limited company incorporation is governed by the Companies Act, 2013 read with the Companies Incorporation Rules, 2014, to register a private limited company a minimum of two shareholders along with two directors (they can be same person) are required, w.e.f February 23,2020 Ministry of Corporate Affairs (MCA) has recently launched SPICE+ and AGILE-PRO (Incorporation Forms) to turn down the procedure, time and cost for new company incorporation through these integrated forms it becomes quite simple to incorporate a company.
In this article my effort is to highlight the registration process of private limited Company and documents required thereof, through this article I would like to show the road map of the end to end procedural aspect of the incorporation.
Fasten your seat belt we are going to incorporate a company:
This is the first step toward incorporation, before incorporation we should have a name in our mind which should not be similar with the name of any existing company registered with MCA or having a similar registered trademark, we can apply two names simultaneously for a company through incorporation form i.e. SPICE+ (part A) and filing fee for the same is Rs. 1000.00 only in case our applied name is rejected then only one resubmission is allowed for the name approval with the same fee of Rs. 1000.00.
Point to be noted: We can also apply the whole registration procedure in one go in SPICE+ (by clicking on the button proceed for incorporation) without prior reservation of name but in this case only one name is to be applied and before application it should be taken care of that this name is available because in case the name is not available then the form will be rejected.
“Filing of the main object is in parallel with name reservation.”
Preparation of the main object is quite the brainstorming task, as we have to take care of all the proposed project, ideas and the work which is to be done by the proposed company, it should be specific and shows all the proposed business of the company and we have to upload a .pdf copy of proposed main object clause at the time of name reservation.
As we are living in the 21st century and we are incorporating companies in INDIA where all the filing of the company is in electronic form hence, we have to sign the form in digital mode only, for signing the prescribed form we should have Class-2 digital signature which is required for signing the e-forms of company incorporation.
Capital Structure of company
“Every business needs capital because it is one of the most important aspects of a business, at the time of planning for any business we have to ascertain how much capital is required, in case we fail to estimate the correct amount of capital required in the business which may also lead to failure of business.”
Let us discuss some legal terms used in the Companies Act, 2013 regarding share capital:
Authorized share capital
It is the maximum amount of the capital for which shares can be issued by the Company to shareholders and It is mentioned in the Memorandum of Association of the Company under head “Capital Clause”, it is prudent to plan necessary amount of Authorised Capital at the time of incorporation for our company although, we can increase it any time in future by filing the required form.
Point to be noted: Fee for filing of forms on MCA is based on the authorised share capital of the company, so we have decided the optimum amount of the capital structure.
Paid up share capital
It is an amount of money for which shares of the Company were issued to the shareholders and payment has already been paid by the shareholders and paid up capital shall be less than or equal to authorized share capital but it cannot be more than authorized share capital of the Company.
A certain place is required where the company can keep its books of account and from where the company can operate its business activities and we have to mention the address of Registered office at the time of filing of SPICE+ Part B or a company can be established its place of registered office within 15th day of approval of SPICE+ and shall also intimate such address of registered office within 30 days of the incorporation via e-form INC-22.
In case the Company establishes its registered office after incorporation then the correspondence address of the proposed company to be mentioned in the SPICE+ form at the time of incorporation and ensure that correspondence address should be of the same state where the company is willing to have its registered office.
Director Identification Number (DIN)
“DIN allotment is carried out by the Ministry for the Individual for acting as Director in a company, DIN is a unique number like PAN Card for any person and which is applied and allotted once in the lifetime.”
In case a director do not have DIN at the time of incorporation then he can apply DIN as well at the time of filing of form SPICE+
Point to be noted: Only 3 Directors not having DIN can apply for DIN in SPICE+ Part B.
Application for Certificate of Incorporation
Once the name is reserved for the proposed company, one shall proceed for making an application of Incorporation through filing of SPICE+ Part B form which is web based form and it should be accompanied with SPICe_MOA, SPICe_AOA, AGILE- PRO and INC-9, where the other information is required to be filled in all the required details of director’s, subscriber’s details and other required details of the company.
The application is submitted by paying the requisite Stamp Duty as applicable in case of concerned state because payment of stamp is a state subject and we have to fill the other required details for application of PAN and TAN of the company which shall be duly submitted after affixing the DSC of directors and professional with MCA portal.
After uploading all the required forms, application for the incorporation is successfully submitted and after processing of application by department the certificate of incorporation is issued by the authority.
Checklist of documents required for the company incorporation:
1. Proof of Address of Registered office: Lease Deed/ Rent agreement/ Ownership document/ Non Objection Certificate (in case ownership of the property is in blood relation)
2. Copy of utility bills which should not be older than 2 months.
3. Proof of Identity and proof of residential address of the subscribers and Directors : PAN Card and Aadhar Card. (PAN Card is mandatory in case of person is resident of India)
4. If any of the proposed Directors does not have a DIN at the time of filing the application proof of identity (Voter id card, Passport or Driving Licence) and residential Proof (Bank, Electricity Bill, Telephone Bill or Mobile bill) is required.
5. Consent from Directors in form DIR-2 is required.
6. Passport size photograph of proposed directors (only in .jpg format and max. size is 100kb)
7. Proof of appointment of Authorized Signatory for GSTN (letter of Authorisation, copy of resolution passed by Managing Committee or acceptance letter)
8. Specimen Signature of Authorized Signatory
Author has tried her level best to cover all the relevant aspect related to the topic and In case of any suggestion or improvement the author can be reached through whatsapp or mail which is available on the cover page.
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DISCLAIMER: This article is based on the relevant provisions and to the best of my knowledge at the time of preparation of this article and moreover in no event author shall be liable for any direct and indirect result from this article and this is only a knowledge sharing initiative provided solely for information, this article is not a professional advice or recommendation.