A Private Limited Company is an organisational vehicle to carry on business in corporate structure. The process of company registration is provided under Indian Companies Act, 2013 whereas 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
Private Limited Company Registration process involves two extensive steps further classified in four steps. First is the name approval and reservation and second step is the application of company incorporation. Below explained are the steps involved to promote a company at operational stage.
Step 1: Procure Digital Signature Certificate
Digital Signature Certificate allows the application filed with MCA signed digitally 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 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.
Step 2: Reservation of name under RUN
MCA portal provide web-form RUN (Reserve Unique Name), whereby the applicant using its login credential can apply for the desirable name for registration of company. In 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 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 are already registered with 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 Name Approval Letter. The applicant must complete following steps within given time to register a company with same name.
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 company and defines the how operations are carried out.
When comes to register a company as Private Limited, below three clauses are included in its AoA in addition to the general clauses.
- Number of members is limited up to 200.
- Transferring of shares is restricted.
- Prohibition on accepting securities from public.
In addition to MoA and AoA, the application for Private Company Registration must be accompanied with following documents:
- NOC from the owner of registered office address and Utility Bill;
- In case the premises is rented, Rental Agreement with the registered office owner.
- Consent to act as a Director of the company in form DIR – 2;
- Declaration by first subscriber(s) and director(s) in form INC – 9
- Certified true copy of the self-attested Identity proof of the first subscriber(s) and director(s).
- 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 with SPICe MOA and AOA. The said form is consolidated application for making an application for incorporation of company along with allotment of DIN, PAN and TAN.
As per latest amendments, the Government fee for registration is waived off for small and other companies having authorised capital up to 10 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 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 physical card.
Factors to keep in mind while registering a Private Company
- One can process only one name through SPICe form for name reservation. If your organisation name is similar to another current name, it will likely to be rejected. You will require repeating the complete procedure.
- RUN service is optionally available. You may use it to test the reservation of your name. You need to pay fee of INR 1000 to make an application.
- RUN services are most efficient, as in case of rejection of name, one do not need to redo all the documental requirements.
- Recollect, if you are a company with authorised capital is INR 10 lakhs, the Government fees is 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 in to existence in eyes of law, whereby it is authorised to carry out business in its own name and hold assets. Also, the company is required to fulfil the applicable compliance after incorporation of the company, as guided by the professional.