Lets Start StartUp with Private Limited Company in India-Khanna & Associates LLP

Lets Start StartUp with Private Limited Company in India

Step by step guide to Formation / Registration / Incorporation ofa Private Limited Company, in India

Defitions:-

“company” means a company incorporated under Companies Act 2013 or under any previous company law.

Company limited by guarantee

“Company limited by guarantee” means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up.

Company limited by shares

“Company limited by shares” means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by them.

Minimum requirements for the Private Limited Company:-

Features of Private Limited Company :-

Require 2 Person as Entrepreneur i.e Directors :- shall have at least one director on its board of directors, who has stayed in India for a total period of not less than one hundred and eighty two (182) days in the previous calendar year
Easily Setup and recommend to Growing Startups.
Limited Liability for Members.
More Credibility as Compare to others.
Easily raise funds from Investors.
Minimum 2 Shareholders
The directors and shareholders can be the same person
Minimum Share Capital shall be Rs. 100,000 (INR One Lac)
Application of allotment Director Identification Number (DIN) for all the Directors
DSC (Digital Signature Certificate) for two Directors

Steps Taken for Register a Private Limited Company :-

Step 1. Application for Director Identification Number (DIN) in form DIR-3 & DSC (Digital Signature Certificate).
Step 2. Search for the Company Name availability.
Step 3. Application for the Name availability.
Step 4. Drafting of Memorandum of Association (MOA) & Articles of Association (AOA).
Step 5. Filing of e-forms with RoC (Registrar of Companies).
Step 6. Payment of RoC Fees & Stamp Duty.
Step 7. Verification of documents / forms by RoC
Step 8. Issue of Certificate of Incorporation by RoC

Documents Requirements-

ID Proof and Address Proof for all Directors. as id proof PAN Card is Mandatory.

latest utility bill (electric bill/telephone bill) or latest tax receipt/ownership deep of the property for the property to be used for registered office.

Company Formation FAQ’s

The complete procedure is primarily divided into following 8 Steps.

Step 1. Application for Director Identification Number (DIN) in form DIR-3 & DSC (Digital Signature Certificate)

What is a Director Identification Number (DIN)?

Director Identification Number (DIN) is a unique identification number issued by the Ministry of Corporate Affairs (MCA), for an existing director or a person intending to become a director of a company.

Documents required for DIR-3 Application

In case of Indian National

Identity Proof: Copy of PAN Card (Income Tax Permanent Account Number (PAN) is mandatory in case of Indian National and in such cases applicant details should be as per Income tax PAN)
Address Proof: Copy of Passport or Election/Voter ID or Ration Card or Driving license (address having pin code) or Electricity/telephone (Utilities) bill or AADHAR Card. All this should be in the “Name of Applicant” only and it should not be older than 2 months from the date of filing of the e-form.
Passport Size Photograph (latest) : 1 photocopy or a soft-copy in (.JPEG format)
*Current Occupation
*Email Address of the Applicant
*Mobile/Cell Number
*Educational qualification
*Verification to be signed by the Applicant. See the attached DIR4 format

In case of Foreign National

Identity Proof: Copy of Passport (mandatory)

Address Proof: Address proof should not be older than 1 year from the date of filing of the eForm.

Passport Size Photograph (latest): 1 photocopy or a soft-copy (in .JPEG format)

*Current Occupation

*Email Address of the Applicant

*Mobile/Cell Number

*Educational qualification

*Verification to be signed by the Applicant. See the attached DIR4 format

All the documents require “Self attestation”.

. In case, the director is residing outside India, the attached supporting documents should be attested by the Consulate of the Indian Embassy, Foreign Public Notary. In case of director, supporting documents can also be attested by Company secretary in full time employment / CEO / Managing director of the Indian company in which he / she proposed to be a director.

DIR-3 shall be digitally signed by the same person i.e. applicant who is filing the application and by either of the following:

Company Secretary (in whole-time practice) or a Chartered accountant (in whole-time practice) or Cost accountant (in whole-time practice)
Company secretary in full time employment or Director of the company in which the applicant is to be appointed as a director

. While making DIR-3 Application following details are mandatory :

First Name, Middle Name, Last Name, Details of father of an applicant (even in case of a married woman)

In case of a Married woman, a photocopy of the Marriage Certificate is required (If DIN needs to be in the “Changed Name”)

. There could be instances of DIR3/DIN Rejection. Refer “Common Causes of DIN Rejection” for the resolution.

*Starred items are mandatory fields of DIR-3 application

What is a Digital Signature Certificate (DSC)?

Digital Signature Certificate (DSC) is the digital equivalent (i.e. electronic format) of physical or paper certificates. Examples of physical certificates are driver’s license, passport. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver’s license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove your identity, to access information or services on the Internet or to sign certain documents digitally. Since MCA accepts electronic submission of Forms on its website the DSC is mandatory for all the users.

Documents required for obtaining DSC

Digital Signature Certificate application Form (duly signed by an applicant). An applicant is required to sign across the photo.

Download the DSC Application Form (Class II Individual Certificate)

All other documents are same as required for the DIR-3 Application

Note: All the documents require “Self attestation” and identity proof and address proof should be attested by either a Gazetted officer (Class I) or Bank manager or Post Master.

Step 2. Search for the Company Name availability

The Promoters have to provide at least 6 names in the order of their preference/priority. The Promoters can themselves search for the available names by visiting the MCA Website: Check Name Availability

Step 3. Application for the Name availability

After drafting of Main Object of the proposed company, need to file e-Form INC-1 (Application for reservation of name) with Registrar of Companies for name availability. The Applicant needs to give 6 proposed names in preference/priority along with their meaning and significance of each word.

Note: Refer the “undesirable names” rules extracts from the Companies (Incorporation) Rules, 2014.

Also refer MCA General Circular on Use of word ‘National’, ‘Bank’, ‘Exchange’, ‘Stock Exchange’ in the names of Companies or Limited Liability Partnerships (LLPs). Refer General Circular No. 2/2014

Step 4. Drafting of Memorandum of Association (MOA) & Articles of Association (AOA)

What is a Memorandum of Association?

Memorandum of Association covers fundamental provisions of the company’s constitution. It covers main object and other objects of the company.

What is Articles of Association?

Articles of Association contain rules and regulations governing the internal management of the company. It is a binding contract between company and its members and members among themselves defining their rights and duties.

As per Section 4(5)(i) of the Companies Act 2013 upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of sixty days from the date of the application.

After name approval from ROC, the next step is to draft MOA & AOA. The subscribers need to specify Name, Address, and Occupation in their own handwriting & sign the subscription pages of MOA & AOA.

Where subscriber to the memorandum is a Foreign National (residing outside India), please refer Chapter 2 of Companies (Incorporation) Rules, 2014 notified by Ministry of Corporate Affairs for knowing the procedure of obtaining attestation and notary while signing subscription pages of Memorandum and Articles of Association and other relevant document.

Step 5. Filing of e-forms with RoC (Registrar of Companies)

Following Forms to be filed/uploaded on the MCA Website.

a) Form INC-7 : For application of Incorporation of the Company

Mandatory attachments to e-form INC-7

Memorandum of Association

Articles of Association

Declaration by Professional in INC-8

Affidavit from the subscriber to the Memorandum in Form No.INC-9

Proof of residential address which should not be older than two months

Proof of identity

Verification of signature of subscribers i.e. Form No. INC-10, in case the company is not having share capital.

It is mandatory to attach entrenched Articles of association if any of the articles are entrenched.

ii) Optional attachments depending upon case

Copy of in principle approval granted by the Reserve Bank of India or any concerned authority in case proposed company shall be conducting NBFI (Non-Banking Financial Institution) activities

NOC in case there is change in the promoters (first subscribers to Memorandum of Association)

Proof of nationality in case the subscriber is a foreign national

PAN card (in case of Indian national)

Copy of certificate of incorporation of the foreign body corporate and proof of registered office address

Certified true copy of board resolution/consent by all the partners authorising to subscribe to MOA

Form INC-22 : For Notice of situation of registered office

Attachments to e-form INC-22

Proof of Registered Office address (Conveyance/Lease deed/Rent Agreement along with the rent receipts) etc.

Copies of the utility bills (proof of evidence of any utility service like telephone, gas ,electricity etc. depicting the address of the premises not older than two months is required to be attached).

No Objection Certificate or permission to use

Certification of e-form INC-22 by CS/CA/CWA (in Whole Time Practice)

Form DIR-12 : For providing information about particulars of appointment of Directors of the company and Key Managerial Personnel

Attachments to e-form DIR-12

Following are the Mandatory attachments in case of an appointment of a Director / Manager / Company Secretary / CEO / CFO.

Letter of appointment
Declaration by first director in Form INC-9
Declaration of the appointee director, managing director, in Form No. DIR-2

Step 6. Payment of RoC Fees & Stamp Duty

After filing of documents online, we need to make payment of RoC fees and Stamp Duty electronically which is based upon the Authorised Capital of the Company.

The MCA Fee Calculator currently being unavailable, please refer the attached “Fee Schedule”

Step 7. Verification of documents / forms by RoC

After payment of all RoC Fees & Stamp duties, RoC verifies/scrutinises all the documents and forms and may suggest few changes to be made in the attachments or form itself. We need to make necessary changes accordingly.

Step 8. Issue of Certificate of Incorporation by RoC

Once all the Forms are duly approved by RoC, the digitally signed “Certificate of Incorporation” is emailed to the Directors.

As part of the Green Initiative by the MCA (Ministry of Corporate Affairs), few Certificates including “Certificate of Incorporation” are now issued only in the electronic format i.e. soft-copy (having digital signature of RoC Registrar). Once the Incorporation Certificate is received, Company can start it’s operations.

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Lets Start StartUp with Private Limited Company in India-Khanna & Associates LLP