A Private Limited Company is an organizational vehicle to carry on business in the corporate structure. The process of company registration is provided under the Indian Companies Act, 2013 whereas the Ministry of Corporate Affairs is the regulatory body for this purpose. The process of company registration is simplified by the amendment in the provision applicable. In this article, we are talking about the foremost modifications and a step-smart manual on the way to register a company in India.
Process for Private Limited Company Registration
Wondering what is the process of company registration? There are 4 Simple Steps to follow to register a Private Limited Company.
These steps to register Private Limited Company involves two extensive steps further classified into four steps. The first step is the name approval and reservation and the second step is the application of company incorporation.
Here are the steps to follow as a part of the process of company incorporation.
Step 1: Reservation of name under RUN
One of the first company registration steps involves logging into the MCA portal and access the web-form RUN (Reserve Unique Name). Here, the applicant using the need to enter login credentials and apply for the desirable name for registration of a company. In a given service, alternate two names can be applied in preferential order.
In case, none of the names are approved by the Registrar, the applicant is given another chance to provide the other two names, as desired for the company. In case, the names in re-submission are also not accepted, the applicant shall make a fresh application by payment of applicable Government Fees.
The application of name reservation is followed by the search of name availability by the professionals, to check whether any other company/ LLP is already registered with the same name or a trademark is registered or not. Further, the name applied must also be in line with the provisions of name availability.
The name allotted in his application will be reserved for the concerned applicant for a period of 20 days starting from the date of the Name Approval Letter. The applicant must complete the following steps within a given time to register a company with the same name.
There is another alternative to apply for Name Registration i.e.Spice-32 Form. One can process only one name through the SPICe form for name reservation. If your organization’s name is similar to another current name, it will get rejected. You will require repeating the complete procedure.
Where as in case of RUN Service, you may test the reservation of your name by paying an application fee of INR 1000
RUN services are most efficient, as, in case of rejection of name, one does not need to redo all the documental requirements.
Step 2: Procure Digital Signature Certificate
This company registration step requires one to procure Digital Signature Certificate that allows the application filed with MCA signed digitally. This is done by the Director and Shareholders of the proposed company. DSC must be procured for the propose directors and the shareholders of the company to enable the filing of required e-forms during the registration process.
To obtain DSC, documents such as passport size photograph, PAN card and address proof of the applicant is required. The price for getting the Digital Signature ranges between Rs.1500-Rs.2000 depending upon person to person.
Step 3: Drafting of MoA AoA and other documents
The Memorandum of Association and Articles of Association are considered as vital documents for a company as it prescribes the scope of operation of the company and defines the how operations are carried out.
When it comes to this step of registering a company as Private Limited, below three clauses are included in its AoA in addition to the general clauses.
- The number of members is limited up to 200.
- Transferring of shares is restricted.
- Prohibition on accepting securities from the public.
In addition to MoA and AoA, the application for Private Company Registration must be accompanied by the following documents:
- NOC from the owner of the registered office address and Utility Bill.
- In case the premise is rented, Rental Agreement with the registered office owner.
- Consent to act as a Director of the company in form DIR – 2.
- Declaration by a first subscriber(s) and director(s) in form INC – 9.
- A certified true copy of the self-attested Identity proof of the first subscriber(s) and director(s).
- A certified true copy of the self-attested Address Proof of the first subscriber(s) and director(s).
Step 4: Application for Company Registration
Once all the documents are prepared, the application for registration of Private Company can be made by in e-Form SPICe accompanies by SPICe MOA and AOA. The said form is a consolidated application for making an application for incorporation of the company along with allotment of DIN, PAN, and TAN.
As per the latest amendments, the Government fee for Company registration is waived off for small and other companies having authorised capital up to 15 Lakh. However, the Stamp Duty is payable to the respective State in which the registered office is situated.
After due verification of the application and documents provided, the concerned RoC may grant the Certificate of Incorporation (COI), which is a conclusive proof of existence of the company, wherein the date of Incorporation, Company Identification Number (CIN) and Permanent Account Number (PAN) is mentioned with the sign and seal of the Registrar. Further, the Director Identification Number (DIN) to the directors is also allotted with the approval of registration.
With regards to allotment of PAN and TAN, the amendment u/s Section 139A of Income Tax Act was introduced by the Finance Act, 2018 stating that the numbers shown in the Certificate of Incorporation are the sufficient proof of allotment and there is no need of a physical card.
Factors to keep in mind while registering a Private Company
While you follow all the company registration steps it is best to check whether you are a company with authorized capital is INR15 lakhs or less. In such a case, the Government fees are not payable. However, the company cannot raise the capital for a period of 1 year since incorporation to claim this benefit.
On receipt of Certificate of Incorporation (CoI), the company comes into existence in eyes of law, whereby it is authorized to carry out business in its own name and hold assets. Also, the company is required to fulfill the applicable compliance after incorporation of the company, as guided by the professional.