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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.

A company may be contemplated as an association of people who contribute money or money’s worth to a common fund and use it for a purpose. It is an artificial person which has a corporate legal entity different from its core members or shareholders and has a common authentication utilised for its signature.

As per Section 3 of the Companies Act 2013, A company may be formed for any lawful purpose by—

(a) seven or more persons, where the company to be formed is to be a public company;

(b) two or more persons, where the company to be formed is to be a private company; or

(c) one person, where the company to be formed is to be One Person Company that is to say, a private company,

by subscribing their names or his name to a memorandum and complying with the requirements of this Act in respect of registration:


Characteristic features of a Company


• 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.

• Limited Liability

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

• Continual Succession

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


• Common Seal:

The firm 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 firm.


• Transferability of Shares:

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


• 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 firm



Kind 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


The important advantages of company form of ownership are as follows:


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.

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

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.

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.

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.

DISADVANTAGES OF COMPANY


In spite of its several advantages, the company form of ownership also suffers from some disadvantages.


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.

Restrictions

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

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.


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.

PROCEDURE FOR COMPANY REGISTRATION:


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) i.e. Single Application for Incorporation of Company.

Digital Signature Certificate (DSC)

Section 18 of the Information Technology 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.
Register DSC - Role check for Indian companies is to be implemented in the MCA application. Role check can be performed only after the signatories have registered their Digital signature certificates (DSC) with MCA.

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.


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.


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


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.


Registration and Filing Fee

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


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.


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