Registration Process for Private Limited Company
In the last article, we have discussed the various business structures and also provided a comparative analysis between them, an exception of a Public Limited Company. As we intend to dedicate a separate article for the same in the weeks to follow.
Understanding the idea of registering a start-up or new business basically involves harbouring the firm/company under the ambit of, the Companies Act 2013 or the Companies Act 2013 which in turn is governed by the Ministry of Corporate Affairs. The procedure requires the start-up or new business to be registered in Indian official records with the Registrars of Companies.
The Companies Act sets down the rules for the establishment of both private & public companies. In a discussion, today is the most common form of business entity in India, The Private Limited Company.
While registration of companies could seem a daunting a task a few years ago, the MCA (Ministry of Corporate Affairs) has to made registration process online a few years back.
The documents listed below must be acquired for registration of company:
- Digital Signature Certificate (DSC):
As per information act 2000, there needs to be a valid digital signature on the documents submitted electronically.
This is to ensure that security and authenticity of documents are maintained electronically.
The controller of certification agencies (CCA) has appointed agencies through which the digital signature certificate can be acquired.
If you have a pre-generated DSC, you can use it. But it’s advisable to check, it’s validity as they usually are sent across with time-bound validity.
One can acquire DSC through any of these government agencies: TCS, IDBRT, MTNL, and SAFESCRYPT.
Applying for a Digital Signature:
- A Digital signature certificate can be obtained from one of six private agencies authorized by the ministry of corporate affairs
- Company directors must submit the prescribed application form along with proof of identity and proof of address
- Director Identification Number (DIN):
As per amendment act 2006, acquiring a din is mandatory for every director existing or intending to be on board in future.
How to apply for a DIN:
- A provisional DIN can be obtained by filing Form DIN-1 online.
- To get DIN one need to file a E-Form DIN-1
- An E – Form DIN-1 is available on the official website of Ministry of Corporate Affairs
- The application form can be printed and signed & sent to the Ministry of Corporate Affairs with proof of identity & proof of address( Manual mode)
- Upon verification and approval, a permanent DIN is issued.
- For E-filing :
Step 1: Register yourself on the MCA website (Link below: http://www.mca.gov.in/MCA21/)
Step 2: Post filling DIN-1 Form, upload the same by accessing the upload button, on the MCA website & pay the applicable fees
Step 3: Post generating DIN, Director should intimate their company using DIN Form-2
Step 4: Post which the company should intimate the ROC, about Director’s DIN through DIN Form-3
Step 5: Any further changes in DIN status e.g. address, personal details etc. Directors must then intimate this change by submitting the e-Form DIN-4 Form
- Registration on the MCA Portal or New user registration:
How to register on MCA portal?
To register on the MCA portal, please log on to http://www.mca.gov.in/MCA21/
Registering with MCA also gives you additional benefits like:
- Upload E-Forms
- Make Payments
- Annual E-Filing
- Applying for the name
The promoters can choose one or more suitable name of the company as it allows flexibility to the Registrar to select a name, in case of duplication or if similar names already registered.
Three conditions must be met:
- The name suggested should not be one prohibited under the ‘Emblems and names Act, 1950’
- No other registered company must be listed or incorporated with the same name suggested
- The Company name must have ended with “Private Limited Company”
Post submission of the name the registrar will initiate the process of review and it usually takes 3-5 days for the approval procedure.
- Filing for Incorporation of Private Limited Company
Post the approval of the name the promoters should submit the application to the registrar to initiate the incorporation process with the prescribed fees and the following documents
- Articles of Association.
- Memorandum of Association :
- Declaration from Directors:
- Affidavits of the Directors:
Articles of association & Memorandum of association are two very important submitted to the ROC for the purpose of incorporation. The Article of Association sets out the constitution of the company. It contains, amongst others, the objectives and the scope of activity of the company besides also defining the relationship of the company with the outside world. They work in tandem with each other because while MOM sets out the objectives it is the AOA that lays down rules & regulations for them to be implemented.
Further, a declaration stating that the requirements of the act & the rules framed have been complied with.
The declaration is required to be attested by an Advocate of Supreme Court
An attorney having the right to appear before High Court
Chartered accountant with a dedicated practice in India, who is engaged in, the formation of the company
By a person named as a Director, Manager or Secretary of the Company
- Subscribing to the Private Limited Company
As per the Companies Act 2013, a subscriber must sign their names and must be subscribed to the shares of the company incorporated.
Which basically implies, that each subscriber must have at least one share of the company
Each subscriber should sign the memorandum in the presence of at least one witness and must clearly state the following:
- Personal Description
- No of shares subscribed
- Nature of shares etc.
Likewise both (Article and Memorandum of Association) must be duly signed and stamped
5: Certificate of Incorporation
After filing the above-mentioned documents and payment of necessary fees, the certificate of Company incorporation would be issued by the Registrar of Companies. Upon Incorporation, the company becomes a legal person separate from its members.