Checklist for Company Incorporation in India

This blog explains the checklist for Incorporation of Private Limited Company, Public Limited Company, and One Person Company under the Companies Act of 2013.

With initiatives like Digital India and the MCA21 program, the government has successfully digitized Company Registration services offered by the Ministry of Corporate Affairs, and integrated it with other related services offered by the Income Tax Department and the Labour Department. Companies in India are incorporated and regulated under the Companies Act of 2013. The Act makes registration mandatory for all types of Companies be it Limited or Unlimited, Private or Public. However, before initiating the process, the Act prescribes a checklist of conditions which need to be met, mostly related to the eligibility and the documents required to complete the process. Our objective here is to explain the entire checklist to you, and how it fits in the company registration process. However, before proceeding it’s better to first understand what Companies are according to the Companies Act.

Companies are defined under Section 2 of the Companies Act as entities incorporated under the Act or any previous Company Law. This definition indicates the importance of incorporation and formation of a distinct legal identity for Companies in India. So, unincorporated business structures cannot be classified as Companies under the Act. However, this is not enough. Company Formation in India requires other conditions to be met depending on its type, and we will discuss all these conditions one by one.

A Complete Checklist for Company Incorporation in India

To start a Company in India, you first need to ensure the adequate requirements for shareholders, directors and capital are met. Along with these, the Company must also have a finalized name and office address for registration. These requirements differ for different types of Companies in India. Here is a complete checklist for incorporation of Private Limited Company, Public Limited Company, and One Person Company.

Checklist for Incorporation of Private Limited Company:

Minimum Number of Shareholders: A Private Limited Company must have at least 2 Shareholders as part owners with their ownership share dependent on the ration of their shareholding. This number can go up to 200. Shareholders of a Private Limited Company can be individual or non-individual entities, Indian or Foreign in origin.

Minimum Number of Directors: A Private Limited Company must have at least 2 Directors as authorities to control its internal management. This number can go up to 15. Directors of a Private Limited Company can be non-minor Individuals, Indian or foreign in nationality. However, a Pvt Ltd Company must have at least one director who is a Resident Indian or has resided in India for more than 120 days in the previous financial year.

Minimum Amount of Capital: The Companies Act does not prescribe any minimum or maximum capital amount for starting a Private Limited Company. However, the Shareholders must decide and accordingly invest adequate capital in the Company for carrying out its business operations smoothly.

Unique & Valid Name: The name of a Company must be chosen with utmost care. It must be appropriate according to the Company’s brand, end with the phrase “Private Limited Company”, and must follow the guidelines prescribed for the purpose by the MCA. Once the name has been chosen, it must be registered with the Registrar of Companies.

Registered Office Address: Private Limited Companies are registered with a specific address, called the Registered address of the Company. It is at this address that all the official correspondence of the Company is sent to. Moreover, all the official accounts and records of the Company are maintained here. So, while choosing a registered address, you must ensure that you have a fully constructed, and completely lockable office space at this location, whether owned or rented.

Checklist for Incorporation of Public Limited Company:

Minimum Number of Shareholders: A Public Limited Company must have at least 7 Shareholders as part owners with their ownership share dependent on the ration of their shareholding. Moreover, since these are usually large-scale companies, there is no maximum limit for the number of shareholders.Public Limited Companies can freely and publicly transfer or trade its shares on Stock Exchange Platforms, and anyone among the general public can purchase these.

Minimum Number of Directors: A Public Limited Company must have at least 3 Directors as authorities to control its internal management. This number can go up to 15. Directors of a Public Limited Company can be non-minor Individuals, Indian or foreign in nationality. However, it must have at least one director who is a Resident Indian or has resided in India for more than 120 days in the previous financial year.

Minimum Amount of Capital: The Companies Act does not prescribe any minimum or maximum capital amount for starting a Public Limited Company. However, the Shareholders must decide and accordingly invest adequate capital in the Company for carrying out its business operations smoothly.

Unique & Valid Name: The name of a Public Limited Company must be chosen with utmost care. It must be appropriate according to the Company’s brand, end with the phrase “Public Limited Company”, and must follow the guidelines prescribed for the purpose by the MCA. Once the name has been chosen, it must be registered with the Registrar of Companies.

Registered Office Address: Public Limited Companies are registered with a specific address, called the Registered address of the Company. It is at this address that all the official correspondence of the Company is sent to. Moreover, all the official accounts and records of the Company are maintained here. So, while choosing a registered address, you must ensure that you have a fully constructed, and completely lockable office space at this location, whether owned or rented.

Checklist for Incorporation of One Person Company:

Minimum Number of Shareholders: A One Person Company cannot have more than one shareholder who is entitled to 100% shareholding and profits of the company. This sole shareholder must be an Indian Citizen, may be a Resident or a Non-Resident Indian.

Minimum Number of Directors: A One Person Company must have at least 1 individual Director who is a Resident Indian, or has resided in India for more than 120 days in the previous financial year. This number can go up to 15. Directors are authorities to control the internal management and ensure legal compliance by the OPC.

Minimum Amount of Capital: A One Person Company must have at least 1 individual Director who is a Resident Indian, or has resided in India for more than 120 days in the previous financial year. This number can go up to 15. Directors are authorities to control the internal management and ensure legal compliance by the OPC. The Companies Act does not prescribe any minimum or maximum capital amount for starting a One Person Company. However, the Shareholder must decide and accordingly invest adequate capital in the Company for carrying out its business operations smoothly.

Unique & Valid Name: The name of an OPC Company must be chosen with utmost care. It must be appropriate according to the Company’s brand, end with the phrase “Private Limited Company (OPC)”, and must follow the guidelines prescribed for the purpose by the MCA. Once the name has been chosen, it must be registered with the Registrar of Companies.

Registered Office Address: One Person Companies are registered with a specific address, called the Registered address of the Company. It is at this address that all the official correspondence of the Company is sent to. Moreover, all the official accounts and records of the Company are maintained here. So, while choosing a registered address, you must ensure that you have a fully constructed, and completely lockable office space at this location, whether owned or rented.

Details & Document Checklist for Private Limited Company Incorporation

After meeting the above conditions, you can establish your Company in India, but to legally operate it, you will have to get it registered with the Registrar of Companies. The process of registration is online and application based. So, there are certain requirements you need to meet in order to complete the application process.

The checklist to complete the application process for company registration primarily includes the documents and details required to fill out the form. The form itself is divided into two parts : Part A and Part B. While Part A seeks the details about the Company’s proposed name and is submitted to the ROC for getting approval over this name, Part B seeks details about the company’s capital, its subscribers and directors which are actually required for Company Registration.

Let’s discuss the details and documents checklist for Incorporation of Private Limited Company.

PART A of SPICE Plus

Type, Class, Category, and Subcategory of the Company
Business Activity of the Company according to the Industrial Activity Code
Details of the Proposed Names of the Company (2 names can be proposed per application)

PART B of SPICE Plus

Authorized andSubscribed Capital of the Company
Details of the Registered Office Address
If the Company does not have a registered address at the time of registration, a temporary postal address may be provided, and within 30 days after registration this address must be changed to a permanent registered address
First Subscribers Details (Number of Subscribers, their personal details, occupational details and educational Classifications)
First Directors Details (Number of Directors, their DIN, their personal details, occupational details, and educational qualifications.
Nominee Details: This applies only to One Person Companies. The sole Shareholder of an OPC selects a nominee for succession of the OPC after his death or departure. The personal details of such a nominee will be required.

However, simply filling out the details in the form is not sufficient. These details must be supported with certain documents and legal drafts as mentioned in the table below.

S.No	Type of Documents	List of Documents
1.	Documents of First Shareholders & Directors	Aadhar Card Identity Proofs (Driving License/ Voter ID/ Passport) If the First Shareholder/Director is a foreigner, Passport will be mandatory Address Proofs (Electricity Bill / Water Bill / Landline Bill not older than 2 months)
2.	Documents of the Registered Address	Proof of Registered Address (Utility Bills not older than 2 months in the name of the Company) No Objection Certificate from the owner of the Office Premises
3.	PAN card of the applicant director	MOA of the Company, drafted on a Stamp Paper, Stamped, Notarized, and signed by all Shareholders AOA of the Company drafted on a Stamp Paper, Stamped, Notarized, and signed by all Shareholders
4.	Documents of the Nominee (Applicable for OPC Only)	Nominee Consent Form
5.	Documents of the Authorized Applicant Director	Digital Signature Certificate

How to Proceed with Private Limited Company Incorporation?

As mandated by the Central Government, companies in India must mandatorily be incorporated using the online SPICe+ application form only. SPICe+ is a web-based application form that integrates more than 10 services from the Ministries of Corporate Affairs, Labour, Finance, and the state governments of Maharashtra, Karnataka, and West Bengal. These services include an application for company incorporation, DIN, PAN, TAN, GSTN, EPF, ESIC, professional tax, Shops and Establishment registrations, in addition to an application for opening a business bank account. The form is divided into two parts, each containing applications for different services.

PART A: contains an application for reserving the name of a newly established company. Two names can be proposed in a single application at a time, with only one chance of resubmission if the names get invalidated. An application fee of Rs.1000 is charged for reserving the name of a company through this form.

PART B: Part B contains ten other applications mentioned above, including the application for a Certificate of Incorporation for the company. The Government has permitted a Zero filing fee for companies with authorized capital less than Rs 15 lakhs, beyond which a fee of Rs. 500 shall be charged.

The SPICe+ application is to be digitally signed by any of the directors of the company, using a digital signature certificate. A DSC is issued by certifying agencies licensed by the Ministry of Corporate Affairs. For obtaining a DSC, an online application must be filled out and submitted along with the proof of identity and registered address of the applicant. For the registration of a company, the applicant director should apply for and obtain a Class III DSC. The application fee for DSC is different in different states of the country.

The applicant director must have a DIN before his appointment as a director in the company. He can apply for the same in the DIR-3 application form or through Part B of the SPICe+ form itself. The application fee for both of these forms is Rs.500. The next step is to select the name of your company, in pursuance of the criteria and rules mentioned in the Companies Act, Companies Incorporation Rules, Names and Emblems Act, and the Trademark Act. The application for reserving the selected name can be filed using the RUN form or Part A of the SPICe+ form. You can propose two names at a time in each of these applications. The applicant gets two chances of resubmission in the RUN application and one in the SPICe+ application before it gets a final approval or rejection.

The MoA and AoA of a company are its most significant documents, drafted by the directors and signed by the shareholders of the company. A resolution is passed to approve and sign the two documents at the general meeting of the company. Both these documents are required to be attached with the SPICe+ application as a supporting document which is required to be mandatorily registered with the RoC. The application fee for these documents depends on the authorized capital of the company. After drafting and signing the MoA and the AoA of the company, the final application for incorporation of the company can be filed and submitted to the RoC. Once the RoC approves the application form and the supporting documents, the company finally gets registered. As proof of registration, the RoC issues the Certificate of Registration and the Corporate Identification Number to the company.

S.No	Steps to Apply for Company Incorporation in India
1.	Obtain DSC for the applicant director
2.	Obtain DIN for the applicant director as well as all other directors
3.	Select and reserve a suitable name for the company
4.	Draft Memorandum of Association and Articles of Association
5.	Fill out and submit the online SPICe+ application form
6.	Attach supporting documents and linked forms
7.	Receive Certificate of Incorporation and Corporate Identification Number

The digitization of company registration services in India has streamlined the process and made it more accessible. By understanding the company incorporation checklist and requirements for different types of companies, aspiring entrepreneurs can navigate the registration process more effectively. It is crucial to carefully consider the requirements for shareholders, directors, capital, name selection, and registered office address. Embracing the online SPICe+ application and obtaining digital signature certificates and Director Identification Numbers are essential steps. Overall, this simplified registration process opens up opportunities for individuals to establish their businesses and contribute to the vibrant Indian economy.

Conclusion

FAQs

Q1: What is the importance of a checklist for company incorporation?

A company incorporation checklist serves as a comprehensive guide to ensure that all necessary requirements and documents are met and submitted during the process of registering a company. It helps potential business owners navigate the complex legal and procedural aspects of company formation, ensuring compliance with relevant laws and regulations.

Q2: Can you explain the checklist for Company incorporation in India?

The checklist for incorporation of Private Limited Company includes:

Minimum 2 shareholders and directors
Adequate capital investment
Unique company name ending with “Private Limited Company”
Registered office address with proper documentation
PAN, Aadhar, and other identity proofs of shareholders and directors
Drafted and signed Memorandum of Association (MoA) and Articles of Association (AoA)

Q3: How does the checklist for company incorporation differ for Private Limited and Public Limited Company?

The checklist for incorporating a Public Limited Company is similar to that of a Private Limited Company, with a few distinctions:

A minimum of 7 shareholders is required for Public Limited Companies.
There’s no maximum limit on the number of shareholders for Public Limited Companies.
Public Limited Companies can freely trade shares on stock exchange platforms.

Q4: What is the company incorporation checklist for a One Person Company (OPC)?

The company incorporation checklist for a One Person Company includes:

A single shareholder with 100% shareholding and profits.
At least 1 director who is a Resident Indian or has resided in India for more than 120 days in the previous financial year.
Adequate capital, valid name, registered office address, and necessary documentation.

Q5: How do I proceed with company incorporation process using SPICe+ application form?

The SPICe+ application form is an online form that integrates multiple services required for company incorporation. Here’s a brief process of company incorporation using SPICe Plus:

Obtain a Digital Signature Certificate (DSC) for the applicant director.
Apply for Director Identification Numbers (DIN) for all directors.
Choose and reserve a suitable company name.
Draft and sign the Memorandum of Association (MoA) and Articles of Association (AoA).
Fill out the SPICe+ application form online, attaching all required documents.
Receive the Certificate of Incorporation and Corporate Identification Number upon approval by the Registrar of Companies.

Checklist for Company Incorporation in India :Private Limited, Public Limited and One Person Company Explained