Company Formation Procedure in India

 

 A Company may be a sort of entity wherein the liability of its members or shareholders is restricted to their shareholding within the Company. Companies in India are governed by the corporate Act, 2013 (as well as its rules and notification) along side the principles and regulations stated within the Memorandum and Articles of Association of the corporate .
There are two main sorts of Companies:
1. a personal Ltd.
2. A Public Ltd.

Private Limited Company:
(What are the key features of a personal Limited Company?)
A Private Ltd. has the subsequent characteristics:
a. a personal Ltd. are often formed by a minimum of two members and a maximum limit of members is 200 (age of the administrators should be 21 years or more).
b. It cannot issue shares to the overall public, it can issue shares to either its members or a specific group of people .
c. The shares of a personal Ltd. can't be traded within the public market.
d. Disclosure and compliances for a personal Company are fewer as compared to a Public Ltd. .
e. Such companies must use the words “Private Limited”at the top of its name, for e.g. ABC Private Limited.
f. a personal Company should have a minimum of two directors.

Public Limited Company:
(What are the key features of a Public Limited Company?)
A Public Ltd. has the subsequent characteristics:
a. A Public Ltd. are often formed by a minimum of seven members. there's no restriction on the utmost number of members (age of the administrators should be 21 years or more).
b. It can issue shares to the general public and these shares are often traded within the public market.
c. As compared to a personal Ltd. , a Public Ltd. has got to adhere to stringent regulations, compliances and disclosures.
d. Such companies must use the word “Limited” at the top of its name, for e.g. ABC Limited.
e. A Public Company should have a minimum of three directors.

Benefits of fixing a Company:
(What are some benefits of fixing a Company?)
1. As compared to other sorts of entities, a corporation may be a well-structured organization.
2. Liabilities of members are limited to their shareholding.
3. a corporation may be a separate legal entity.
4. a corporation can raise capital by issuing shares to its members, this helps to boost quick funds.
5. a corporation has perpetual existence, which suggests that albeit its members or
directors change or leave the Company’s existence isn't affected.
6. In large and sophisticated projects, a corporation sort of entity is preferred over another sort of organization structures.

Points to be considered while fixing a Company:
1. fixing a corporation is costlier than other sorts of entities.
2. It takes a longertime to line up a corporation as compared to other entities.
3. a corporation has got to adhere to more compliances as compared to other sorts of entities.
4. just in case any compliances aren't completed on time, it can attract penalties and legal proceedings.
5. Percentage of taxes is higher for a corporation .
6. Dissolving a corporation may be a tedious and lengthy procedure.


List of documents and knowledge required to line up a personal Limited Company: (Which documents and knowledge should be kept ready while fixing a personal Limited Company?)

• Proposed name of the corporate .
• Name of the proposed directors and a complete number of directors.
• Name of the proposed shareholders.
• Address proof and identity proof of the administrators and shareholders (Aadhar Card and
PAN card is compulsory).
• Address proof of the registered office of the corporate .
• the entire capital of the corporate and means of raising the capital amount.
• Contribution of every shareholder within the total capital of the corporate .
• List of activities the corporate are going to be engaged in.
• A digital signature of all the administrators (If available).

Brief procedure for incorporation
(How to include a personal Limited Company?)
For incorporating a personal Ltd. e-forms are to be filed through after login to Ministry of Corporate Affairs (MCA) website:
• For reserving and approval of proposed name – Form to be filed through RUN (Reserve Unique Name) service available on MCA website.
• SPICE Form (Simplified Proforma for Incorporating Company Electronically).

After filling all the above-stated forms “Certificate of Incorporation” are going to be issued by MCA. Certificate of Incorporation may be a document which signifies that a corporation has been incorporated.
(Forms are available on http://www.mca.gov.in/MinistryV2/companyformsdownload.html
link)

Note: The procedure, information and documents required to line up a corporation may vary
as per any amendments within the Companies Act, 2013 or the e-form filing procedures and
requirements of MCA website.

FAQ’s

Q. is that the process to include a corporation online?
A: you'll incorporate a corporation by filling online forms through the Ministry of Corporate Affairs (MCA) website.

Q. what's the shareholder’s liability just in case of a Company?
A: Shareholders liability is restricted to their shareholding within the Company.

Q. what's the minimum requirement of directors for fixing a Company?
A: Minimum 2 directors just in case "> just in case of personal Ltd. and a minimum of three directors in case of a Public Ltd. are required to line up a corporation .

Q. what's a Digital Signature Certificate (DSC)?
A: A Digital Signature Certificate or DSC is employed for signing a document, form, etc. digitally.
While filling online forms through the Ministry of Corporate Affairs(MCA), while filing the shape through MCA, the authorized signatories shall need to affix your DSC to varied forms. There are three sorts of DSC, supported the specified you would like to use for and acquire a DSC. The validity of the DSC are often for either 2 years or 3 years, supported your requirement you would like to settle on the validity of the DSC.

FAQ.....................

Q. what's the Memorandum of Association and Articles of Association?
A: When incorporating a corporation , you'll need to prepare Memorandum of Association (MOA) and Articles of Association (AOA)of the corporate . These are the constitutional documents of a corporation . MOA includes clauses like name, the target of the corporate , liability of its members,its registered office address, detailsof share capital, subscribers of the corporate . AOA comprises of rules and regulations that govern the interior working and management of the corporate .