Relevant Provision – Section 7 under Companies Act 2013 read with the Companies (Incorporation) Rules, 2014
The foremost step for an entrepreneur who want to incorporate a company is to identify what kind of company he wants to incorporate (i.e. Private limited, public limited, OPC or etc.)
Let us first understand the General type of companies: –
Private Company – Defined under section 2(68) of Companies Act 2013, means a company which by its articles: –
- Restrict the right to transfer its shares – i.e. they cannot transfer their shares freely, they have to first offer the shares to existing shareholders then to the third party.
- Member of Private limited company can be maximum 200 excluding current or past employees.
- Prohibits any invitation to the public to subscribe for any securities of the company
Public Company – Defined under section 2(71) of Companies Act 2013 means a company which is a not a private company i.e. the above restrictions are not applicable to public companies.
One Person Company – Defined under section 2(62) means a company which has only one person as a member.
In India, most companies are incorporated as private limited because of less compliances and easy procedural norms.
The foremost step to incorporate private limited company is to check its name availability. This includes 5 major checks: –
- Name search at Ministry of Corporate Affairs (MCA) portal (Name should be unique and not identical to any existing company/ LLP )
- Trademark search –You can do it on MCA portal or at ipindia website https://tmrsearch.ipindia.gov.in/tmrpublicsearch/
- Domain search – You can do it on MCA portal or at https://registry.gov.in/
- Name should not be offensive to any section of people.
- The proposed name should not be identical to any foreign embassy, Govt, any high esteemed personage at government.
(One should always refer Rule 8 of companies (Incorporation Rules) 2014 while selecting the name of company to avoid any resubmission/ rejection by CRC)
Once the name is selected, there are two options for incorporation i.e. either one can go with name approval first and then incorporation or can go with direct incorporation.
STEP 1: APPLY FOR NAME APPROVAL IN E-FORM SPICE PART A AT MCA V3 PORTAL.
In SPICE Part A, you just have to mention the type of company, NIC codes of objects in which the company will work and the name of proposed company)
- CRC (Central registration Centre) may take 2- 7 days for its approval, or it may provide for re-submission if the proposed name is identical to any existing company or is not as per the Rule8 of Companies (Incorporation) Rules 2014) (** Resubmission shall be filed within 15 days **).
Once the name is approved it will get reserved for maximum 20 days so we have to proceed for incorporation within these 20 days otherwise the name will expire.
**Can we extend the name reservation? – Yes! Reserved name can be extended further in the following manner :-
- For 40 days on payment of 1,000 Rupees made before the expiry of above 20 days.
- For 60 days on the payment of 2,000 Rupees before the expiry of above 40 days
- 60 days on the payment of 3,000 Rupees before the expiry of above 20 days from the date of approval under section 9 i.e. SPICE Part A
STEP 2:- FILING INCOPORATION FORM:-
Now there are further some pre requisite for filing incorporation forms: –
- The Minimum Director shall be 2 (3 in case of public company) and that too having a valid DIN (Director identification number). – if the directors are not having DIN , then DIN of 2 directors can be applied through SPICE part B also.
- Directors shall have valid DSC (Digital signatures)
- There shall be minimum 2 shareholders
Further the incorporation forms shall consist of SPICE PART B, INC-33, INC-34, INC-9, AGILE PRO.
SPICE Part B shall consist of basic information about company i.e Capital structure, Director details, shareholder details, registered office address, PAN, TAN AO codes etc
INC-33 – MOA (Memorandum of Articles)- shall be filed as per the tables described under Schedule 1 depending upon the type of company.
INC-34 – AOA (Articles of Association) – shall be filed as per the tables described under Schedule 1 depending upon the type of company.
INC-9 – declaration by the directors
AGILE pro –GST, EPFO, ESIC etc.
There shall be some mandatory attachments to the above forms: –
- DIR-2 (Consent to act as directors of the company)
- Declaration by first directors
- Self-attested Aadhar and PAN of directors
- Specimen signatures
- Authority letter for GST
While filing incorporation forms, make sure all forms are filed correctly because all e forms are are linked and if you edit previous forms you have to fill all forms again.
After uploading all the e-forms and payment , CRC will further take a week or two for approval , or in case of any discrepancy It can provide for resubmission .
Once the incorporation forms get approved, CRC will issue Certificate of incorporation
The second way to incorporate company Is to file SPICE PART A, SPICE PART B , INC-33 , INC-34, INC-9 simultaneously
The first way is more feasible as if in the second way the form got rejected the MOA stamp duty, incorporation fees and name application fee shall be wasted.
GENERAL ISSUES WHILE INCORPORATING A COMPANY ARE :-
- PAN , TAN AO codes – In spice part B , we have to mention PAN and TAN area codes, ward no. AO type, – You can get these details on NSDL portal https://tin.tin.nsdl.com/pan/servlet/AOSearch and if the details do not match then MCA will auto download one Excel in which the correct AO codes will be mentioned and then you can put those in e-forms
- DSC shall be registered at MCA V3 portal – otherwise uploading error will occur
- After downloading the e-form , make sure the attachments are visible.
- keep checking the status at my application in MCA portal in case of any resubmission remarks has been raised by CRC
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