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COMPANY REGISTRATION

Legal Meaning: "Company" means a company incorporated under the Companies Act 2013 or under any previous company law;

A company is a legal entity formed by a group of individuals to engage in and operate a business commercial or industrial enterprise. A company may be organized in various ways for tax and financial liability purposes depending on the corporate law of its jurisdiction.

 


CHARACTERISTIC'S OF A COMPANY


1. Separate Legal Entity


A company has a definite legal entity which is different and independent from its members. It can hold and deal with any sort of property.

2. Limited Liability


The liability of the shareholders of the Company is restricted to the magnitude of the due amount of the shares that are held by them.

3. Continual Succession


The company is an artificial person that is established by law perpetuates to exist regardless of the differences in its membership.



4. Common Seal


The Company is an artificial entity or a person, cannot sign its name by itself. Hence, every company is enforced to possess its own authentication or a seal which moves as official signatures of the Company.

5. Transferability of Shares


The shares of a public limited company (PLC) are transferable. The authorisation of the Company or the concession of any member of the Company is not required for the transfer of shares.

6. May Sue or be Sued


A company is a legal person can get into contracts and can implement the permissible authorities against others. It can accuse and be accused in its name if there is a breach of contract by the Company



KIND'S OF COMPANY


A 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.

A Company Ltd 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.

An Unlimited Company


"Unlimited company" means a company not having any limit on the liability of its members.





ADVANTAGES OF COMPANY


1. Limited Liability


The liability of shareholders, unless and otherwise stated, is limited to the face value of shares held by them or guarantee given by them.

2. Perpetual Existence


Deaths, insanity, insolvency of shareholders or directors do not affect the company’s existence. A company has a separate legal entity with perpetual succession.

3. Professional Management


In company business, the management is in the hands of the directors who are elected by the shareholders and are well experienced persons. In order to manage the day-to-day activities, salaried professional managers are appointed. Thus, the company business offers professional management.

4. Expansion Potential


As there is no limit to the maximum number of shareholders in a public limited company, expansion of business is easy by issuing new shares and debentures. Companies normally use their reserves for expansion purposes.

5. Transferability of Shares


If the shareholders of a company are displeased with the progress of the business, they can sell their shares any time. During all this change of ownership, the business continues to operate.

6. Diffusion of Risk


As the membership is very large, the whole business risk is divided among the several members of the company. This is an advantage particularly for small investors.




DISADVANTAGES OF COMPANY


1. Lack of Secrecy


As per the legal provisions, a company has to make various statements available to the Registrar of the Companies, Financial Institutions; the secrecy of business comes down.

2. Restrictions


Compared to proprietorship and partnership, a company has to comply with more legal requirements. It consumes considerable time and effort.

3. Management Mischief’s


Sometimes the managers and directors misuse the company resources for their personal benefits. This brings losses to the company and company is closed.

4. Lack of Personal Interest


Unlike proprietorship and partnership, the day-to-day affairs of a company are looked after by salaried managers. Since they are the employees not the owners, they do have hardly any personal interest and commitment in the company. This may result in inefficiency and, in turn, losses.

5. Winding Up Procedure


The Companies Act provides for a detailed and lengthy process to explain the winding up of a company. This process is a lot more time consuming and expensive.

6. Greater Tax Burden in Certain Cases


Incorporated companies have to pay a higher tax. An incorporated company does not get any discounts and any minimum taxable limits. An incorporated company also has to pay income tax on the whole of its income at a fixed rate whereas other companies are charged at a gradual or slab rate.




PROCEDURE FOR COMPANY REGISTRATION


Step 1 : Director Identification Number (DIN)


It is important to note that every person who is to be appointed as a director must have “Director’s Identification Number (DIN)” [Section 152(3)] or any number as may be prescribed under Section 153. If the proposed director does not already have a DIN, he/she must obtain the same before incorporation of the company. This can be obtained by making an application on the MCA portal in Form DIR - 3. DIN may also be obtained through Form INC-32 (SPICe).

Step 2 : Digital Signature Certificate (DSC)


Section 18 of the IT Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. Acquire DSC - A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian Information Technology Act, 2000.

Step 3 : Proposing the Name of the Company and ascertaining its availability from the ROC


An application for Reservation of Name shall be made to Registrar of Company (ROC), through the web service.SPICe+ 32 www.mca.gov.in by using web service SPICe+.
Upon receipt of an application as per above stated provision under section 4(4), the Registrar of Company (ROC), may reserve the name for a period of 20 Days from the date of the application.

Step 4 : Drafting and Printing of Memorandum and Articles of Association


After ascertaining name availability from the Registrar of Companies steps should be taken to get the memorandum and articles of association for the proposed company drafted and printed. The memorandum of a company has to be in Tables – A, B, C, D and E in Schedule-I to the Companies Act, 2013.

Step 5 : Stamping and Signing of Memorandum and Articles


The memorandum and articles should be printed and signed by subscribers. Thereafter, the memorandum and the articles should be stamped by the appropriate State Authority (Collector of Stamps) under the Indian Stamp Act,1899.

Step 6 : Dating of Memorandum and Articles of Association


The memorandum and articles are then dated, but the date must be the date of stamping or later than the date of their stamping and not, in any event, a date prior to the date of their stamping.

Step 7 : Registration or Approval from Sectoral Regulation


Proviso to Rule 12 of the Companies (Incorporation) Rules, 2014 provides that in case pursuing of any of the objects of a company requires registration or approval from sectoral regulators such as Reserve Bank of India, Securities and Exchange Board, registration or approval, as the case may be.

Step 8 : Filing of Documents and Forms for Registration


Various Documents and Forms which are required for Incorporation of the company are filed with respective authorities.

Step 9 : Registration and Filing Fee


The fee shall be as provided in the Companies (Registration Offices and Fees) Rules, 2014.

Step 10 : Scrutiny of Forms and Documents by Registrar


On receipt of the aforementioned documents and forms, the office of the Registrar of Companies will scrutinise them and if they are found complete in all respects, the Registrar will register the company and allot CIN.

Step 11 : Issue of Certificate of Incorporation by Registrar


A Certificate of Incorporation will be issued by the Registrar of Companies under his hand and seal of his office and sent electronically. One may take printout of Certificate of Incorporation which is generated online.


THE FOLLOWING ARE THE DOCUMENTS REQUIRED
FOR INCORPORATION OF LIMITED COMPANY


A. Identity Proof
1) Permanent Account Number (PAN) Card
2) Aadhaar Card / Passport / Driving License / Voter Identity Card
B. Address Proof
1) Telephone Bill / Mobile Bill
2) Electricity Bill / Water Bill
3) Bank Statement /Bank Passbook with latest transaction (Any one of the Document not older than 2 months)
C. Passport size Photographs – 3 each
Notes:
• All the Copies of documents must be Self Attested by the applicant.
• Telephone Bill / Mobile Bill/Electricity Bill / Bank Account Statement must be in the name of applicant and should not be older than 2 months.
• If the documents are not in than English, it should be translated to English.
1) Consent to Act as Director: Form DIR-2
2) Details for DIN
3) Declaration of DIN (If DIN is allotted already)
1)Application for Digital Signature Certificate (DSC)
2) Declaration by Subscribers & Director: INC-9
1) Board Resolution / Formal authorisation for use of Name / Trademark
2) Authorisation for execution Documents from Company / LLP
Note:- These shall be signed by the concerned on their Letter head

COMPANY REGISTRATION

A company comes into existence is generally by a process referred to as incorporation. Once a company has been legally incorporated, it becomes a distinct entity from those who invest their capital and labour to run the company.
Usually the first step to form a company is the process known as ‘promotion’ where a person persuades others to contribute capital to a proposed company before it is incorporated . Such a person is called the promoter of the company. Promoters also can enter into a contract on behalf of a company before or after it has been granted a certificate of incorporation, and arrange share issues in the name of the company. Section 3 to 22 of the Companies Act, 2013 (herein after called the Act) read with Companies (Incorporation) Rules, 2014 made under Chapter II of the Act (herein after called ‘the Rules’) cover the provisions with regard to incorporation of companies and matters incidental thereto