CS Kanika Kumar
Before Studying the Whole Process, Let us know what is the actual meaning of Company?
“Company” is derived from the Latin word “com” which means together and “panis” means Bread, in short it means eating a meal together”.
In General Sense, A company is an association or collection of individuals, whether natural persons, legal persons, or a mixture of both, where members share a common purpose and unite in order to focus their various talents and organize their collectively available skills or resources to achieve specific, declared or desired goals.
Company is a legal entity, allowed by legislation, which permits a group of people, as shareholders, to apply to the government for an independent organization to be created, which can then focus on pursuing set objectives, and empowered with legal rights which are usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money.
Now, In Accordance with the Companies Act, 2013, Company is defined under Section 2(20) of the above named act which means Company incorporated under this act or under any previous company law.
COMPANY’S ARE OF VARIOUS TYPES, BUT HERE WE ARE DISCUSSING WHAT A PRIVATE COMPANY IS??
What is a Private Company?
Section 2 Sub section (68) of the Companies Act, 2013, defines the Private Company. The “private company” means a company which by its articles,—
a) Restricts – the right to transfer its shares, if any
b) Limits – the number of its members to two hundred, except in case of One Person Company
Provided further that—
shall not be included in the number of members for the purpose of aforesaid Point (b)
Note: where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member.
c) Prohibits- any invitation to the public to subscribe for any securities of the company
NOW HERE-UNDER COMES THE PROCESS TO INCORPORATE A PRIVATE COMPANY
Requirements for the Incorporation of a Private Company:
Note: Now there is no limit for the minimum capital to form a private company as per Companies (Amendment) Act, 2015.
Steps/ Checklist to Private Company Incorporation:
Following here under are the applicable laws related to Incorporation of a Private Company:
|Section 7||Incorporation of Company|
|Section 12||Registered Office of The Company|
|Section 152||Appointment of Directors|
|Section 153||Director Identification Number|
|Rules||1. Companies (Incorporation Rules), 2014 Online GST Certification Course by TaxGuru & MSME- Click here to Join|
Detailed Process For the Incorporation of a Private Company
1. Firstly, Check the availability of the DIN of the proposed director in the company, if the proposed director does not already have a DIN, then he/she must obtain the DIN before incorporation as per Section 153 of the Companies Act, 2013 and the same can be obtained by making an application in Form DIR-3.
Following are the documents required for DIN application
Note: In case of a Married women, Photocopy of Marriage Certificate is required if DIN needs to be in the changed name.
Following are the reasons due to which DIN may not be allotted:
2. As all the filings done by the companies are required to be filed with the use of Digital Signature, so check whether DSC is available of that proposed director or not, if not available then acquire Digital Signature Certificate.
Documents required for obtaining DSC:
3. Check the availability of the proposed name, Promoters may propose upto 6 names in order of their preference and ensure that the proposed name is not available on the MCA website and the name proposed must not be same as in accordance to the trademark act rules.
4. After giving the proposed names make an application to Central Registration Centre (Earlier with Registrar of Companies, ROC) in Form INC-1 and while applying name, Rule 8 of the Companies (Incorporation) Rules, 2014 must be applied.
5. Upon Receipt of name application, name is reserved for a period of 60 days from the date of name application.
6. After name approval, draft MOA and AOA. The MOA of the Company shall be in Table A, B, C,D and E in Schedule I as per Section 4(6) of the Companies Act, 2013, and the AOA of the Company shall be in Table F,G,H,I and J in Schedule I as per Section 5(6) of the Companies Act, 2013.
Note: These two documents are basically the charter and internal rules and regulations of the company. Therefore, it must be drafted with utmost care and with the advice of the experts and the other object clause should be drafted in a very broader sense.
7. File following E-Forms with ROC to initiate the process of Incorporation:
Mandatory attachments for Form INC-7 are as follows;
Important Points to be kept in mind
Note: All above named which is to be mentioned in the subscriber sheet must be in Subscriber’s and witnesses own handwriting.
Optional Attachments are as follows:
♣ As Per Rule 17 of the Companies (Incorporation) Rules, 2014, the details of First Directors as per articles, their Interest in other entities shall be filed in E-Form DIR-12 which is for appointment of Directors and KMP in the Proposed Company
♣ Mandatory attachments for Form DIR-12 are as follows;
Note: – DIR-12 will be filed simultaneously after Filing of Form INC-7 and In Case when address for the correspondence is the address of the registered office of the Company then File Form-INC-22 along with Form- INC-7
8. After filing above named forms, make payment of ROC fees and Stamp duty in respect of the states, which is to be done electronically through MCA Portal.
9. Verification of Documents/ Forms by ROC, if any deficiency is there in any of the documents or forms, Registrar will send an electronic communication about the deficiencies and after the same is removed, the Registrar will register the company.
10. After following all the above steps and if ROC is satisfied with the documents filed, Certificate of Incorporation is issued in the name of Company in Form-INC-11 as directed by Rule 11 of the Companies (Incorporation) Rules, 2014 and it will be considered as date of incorporation.
11. The Company have to file Form INC-22 (In Case when address for the correspondence is not the address of the registered office of the Company) with Registrar in accordance with Section 12 read with Rule 25 of the Companies (Incorporation) Rules, 2014, for the verification of Registered of the Company within a period of 30 days of its incorporation
Following are the attachments for the above named form:
Important Note: All the abovementioned Process of Incorporation i.e. from Name Approval to Company’s Incorporation has now been Centralised. Earlier all the forms related thereto incorporation are made to ROC, Now it will be send to Centralised Registration Centre.
As soon as a company is incorporated, whether public or private limited, it becomes a juristic person. It has its own name and property. It is a separate legal entity distinct from its members who incorporate it. So, Directors are required to care of the Company and its members both legally and socially. Once the Company is incorporated, it is the responsibility of every individual linked with the company to take company to its peak.