Company Formation in India – How to incorporate different types of companies in India, Like Public Company, One Person Company, Private Limited Company, Section 8 Company, Limited Liability Partnership Firm in India, you must submit an application to the Ministry of Corporate Affairs (MCA). You make the application online at the MCA portal remotely too. For registration, you’ll need a Digital Signature Certificate(DSC), and Director Identity Number(DIN), among other things.
What is Company Formation in India?
Company’s Incorporation means making Company a legal person in the eyes of Law or the process of making own identity of the company.
Incorporation simply means giving Birth to a Company or bringing the Company into existence. However, in order to incorporate a company, we need to fulfill various Legal Compliances.
What are the Benefits of incorporating a Company?
- To wave off ourselves from any outstanding liability.
- To Establish Perpetual Existence and Transfer of Ownership.
- To Gain Tax Advantage.
- Enhance the Company’s brand value.
- Improve the ability to manage the Business.
How to Register a Company in India?
Registering a company in India is now a simple 4-step process. Here is what you’ll need to acquire:
- Digital Signature Certificate (DSC)
- Director Identification Number (DIN)
- Registration on the MCA Portal
- Receive Certificate of Incorporation from Registrar of the Company (ROC)
These are the basic steps to Incorporate a company in India with minimum government approvals. If you still need help registering your company, don’t stress over it, and let our team of experts guide you.
Filing various forms in ROC for Registration a Company in India
- The following documents are required to be filed with the Registrar of Companies:
- The Memorandum of Association (duly stamped) and a duplicate copy thereof
- The Articles of Association (duly stamped) and a copy thereof
- An affidavit from the applicant for the Memorandum in Form INC-9
- Proof of residence
- Proof of identity
- The verification of the subscribers’ signatures on Form INC-10
- A copy of the letter from the Registrar of Companies stating the availability of the company’s proposed name
- The e-Form No. 1 (with prescribed stamps) for the incorporation of a company
- The receipt indicating the payment of the prescribed registration and filing fee.
How to Start a Business from Scratch?
You should opt for the Private Limited Company if you are planning to raise funds, LLP if it’s a family business and you are not planning to raise funds, and One Person Company if you are a single founder.
Applicable Laws for Forming a Company in India
The laws applicable for incorporating a company in India include the India Companies Act of 2013, and Foreign Exchange Management Act of 1999 as is applicable for foreign direct investments (FDIs), and the Limited Liability Partnership Act, 2008 is governed by the Ministry of Corporate Affairs http://www.mca.gov.in.
Here we bring you with detailed Business set-up process and services in India.
Both Indian promoters and foreign promoters can form the following business entities:
Types of Companies that can be Incorporated in India?
1. Private Company
A private company is a closely held one and at least 2 or more persons are required to form a private company. A private company is not traded publicly i.e. a private company cannot come out with a public offer. A private company also restricts the right to transfer its shares and except in one Person Company, limits the number of members to 200.
- The minimum requirements for the Private Limited Company
- Minimum 2 Directors
- Minimum 2 Shareholders (Directors & Shareholders can be the same)
- Minimum paid-up capital of Rs. 1,00,000/-
- DIN for both Directors
- Digital Signatures for all Directors
- Consent from subscriber or director
- Proof of Registered Address
- NOC from the owner of the premises
2. Public Company
A public company is defined as a company that is not a private company. The following conditions apply only to a public company:
- It must have at least seven shareholders.
- A public company is required to have at least three directors.
- No restriction or prohibition for raising funds from the public through IPO, FPO, etc.
3. Limited Liability Partnership(LLP)
LLP is an alternative corporate business entity that provides the benefits of limited liability of a company but allows its members the flexibility of organizing their internal management on the basis of a mutually arrived agreement, as is the case in a partnership firm. LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. While the LLP will be a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution in the LLP.
4. One Person Company (OPC)
One person company is a type of company introduced by the Companies Act, 2013 that has one person as a shareholder and director. During the incorporation of a one person company, the sole director & shareholder must propose a person as his/her nominee.
5. Section 8 Company
Section 8 Company is a Company that is licensed under Section 8 of the Companies Act, 2013 which had the main object; for promoting research, social welfare, religion, charity, commerce, art, science, sports, education, and the protection of the environment.
- There must be a minimum of two shareholders.
- There must be a minimum of two Directors (Directors and shareholders can be the same person);
- At least one of the Director shall be a resident in India;
- There is No requirement for Minimum capital
- The Income-tax PAN is a mandatory requirement in case of the Indian nationals;
- Any one of the Identity Proof be it Voter ID/Aadhar Card/Driving License/Passport is required; Passport is, however, a mandatory requirement for the proof of identity in case of the foreign nationals;
- Any one of the Proofs of Residence (Electricity Bill/Telephone Bill/Mobile Bill/Bank Statement);
- The Registered Office address proof
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