Company Registration In India: Expectations vs. Reality
The process for company registration in India has been made easier and friendly due to a bunch of benefits since 23rd February 2020. A private limited company in India is governed by the Companies Act 2013.
A Private Limited Company is a separate legal entity in the eyes of the law. Different from its two owners, with the capacity of holding asserts and operating in its own name. It also enjoys decent credibility in front of financial institutions.
With the introduction of SPICe+ and AGILE Pro forms on 23rd February 2020, now it is mandatory to apply for PF, ESIC, Bank Account, and Professional Tax. In fact, there has been a slight change in the process of company registration in India. These are the steps you need to follow –
- An application for reserving a company name should be made to the Ministry of Corporate Affairs (MCA). In this application, two suggestions can be made. It should be noted that the names proposed will be approved as per the rules of the MCA.
- In the next step, an application is made for Digital Signature Certificates (DSC) for all the shareholders and Directors.
- On the other hand, draft declarations and other documents like DIR2, INC9, NOC, along with the Memorandum of Association (MOA) and Articles of Association (AOA) are finalised. Once finalised, these are signed by all the shareholders and directors.
- Now, applications for incorporations will be filed with MCA in SPICE+ and AGILE Pro, which are comprehensive forms for Company Registration, PAN and TAN Allotment and registration under EPFO, ESIC, Opening of Bank Account and Professional Tax (in case of Maharashtra).
- As per the directions of the registered office, relevant fee and stamp duty needs to be paid at the time of form filling. It also needs to be signed by a CA/CS in practice.
- Now, the certificate of incorporation gets issued by the MCA, and the company is incorporated.
- Registration under PF, PF, ESIC, Professional Tax, GST, and Bank Account normally will take place. This usually takes about 10-15 working days after incorporation.
Documentation Required –
Requirements for all Shareholders and Directors of the company
1. Passport Size Photograph
2. Identity Proof including Voter ID, Driving License, Passport etc
3. Address Proof such as Bank Statements, Electricity Bills, Telephone Bills
(not older than two months)
4. E-mail ID and Mobile Number of every Shareholder and Director.
5. Educational Qualification and Place of Birth of every Shareholder and Director.
Documents required for the registered office address of the company
For rented property:
1. Electricity Bill/Water Bill/Gas Bill (not older than two months)
2. No Objection Certificate (NOC) from the Owner of Premises
3. Rent Agreement
- Electricity Bill/Water Bill/Gas Bill (not older than two months)
- A registered document in the name of the company as evidence of transfer of title.
A private company with a foreign shareholder or director
The process of registering a company in India remains the same as long as you have one shareholder on the board, who is an Indian citizen and resident. Secondly, not more than 50% of the shares are to hold with any foreign company.
Considering the requirement for registering a company is duly followed and understood, the foreign national will require their passport in addition to the documents submitted by the rest of the shareholders.
The documents of the foreign shareholder will be notarized by the Public Notary of their respective country.
- If the country is a signatory of the Hague Convention, then documents will be apostilled by the competent authority of that country.
- If the signatory is not from a country belonging to the Hague Convention, the documents shall be consulraised by a competent authority of the foreign convention.
Who can be a shareholder and director of a private limited company?
Anyone who is of or above 18 years of age, sound mind, or artificial legal person or any corporate can become a shareholder of a private limited company. However, only individuals can be directors, and corporate are not allowed to be directors of a private limited company.
Registering for a new company is an easy process. However, it is detailed and requires dealing with government officials and attesting documents. It is wise to hire a professional who avoids delays, submission difficulties, cancellations, etc. A business enjoys various benefits after registration and can even sign up for start-up programmes and MSME programmes.
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