Skip to content

Is your Company Incorporation Legal?

A Company or LLP is a creation of Law which is considered to be distinct from its owners. In India, the Company Act 2013 and rules framed under this Act prescribes a set of methods and procedures which need to be followed while incorporating a company. The same needs to be followed in words and in spirits.
The issuance of Certificate Incorporation is considered to be conclusive proof that incorporation of a company has been done legally and it does not take away their responsibility of making the correct application, making disclosures on the part of promoters and the first directors who were named in the Article of Association and the practicing professionals who attest and certify these documents and applications to the registrar of a company.
However, to bring things into perspective these are the steps that are required to be followed while incorporating a company.

Table of Contents

For making a company, the promoters have to decide on the following few things first

  1. Who is going to be the first directors of the company?
  2. What is going to be the capital of the company?
  3. Where is the place of the registered office shall be situated?
  4. What is going to be the shareholding ratio among the promoters?
  5. What is the name with which they wish to incorporate the company?
  6. The main areas of activities of the company it shall be dealing with and the internal rules and regulations of the functioning of the company.
Once the above points are decided by the promoters they should approach a good consultant who has experience in the registration process of a company and LLP. It is noteworthy that by the recent Amendment to Companies Act/rules the entire incorporation process of company/LLP has been centralized at Central processing Manesar, Gurgaon. 
And we as Team Setindiabiz  is equipped with 6 offices in Delhi to serve our customers in the incorporation of their companies. We have experience of more than 12 years in company incorporation and can be contacted at our customer care no. +91-9899600605.

Once the information as stated in the earlier paragraph is prepared, we have to follow these steps

  1. Obtaining Digital Signature of Director  (DSC)
  2. Obtaining Director Identification Number  i.e, DIN
  3. Reservation of Name for the proposed company
  4. Drafting of MOA & AOA of the Company
  5. Filing of Incorporation documents for Certification Incorporation
If everything is in order, all the forms are properly filled and documents are duly attached, filled, and filed with the Registrars of Companies (ROC) then the Registrar of Companies issues a Certificate Incorporation. However, in the case of Public Limited Companies, another Certificate along with the certificate of Incorporation known as Certificate of Commencement of Business is required to be obtained.
As stated earlier the legality of the Registration is presumed with the issuance of Certificate of Incorporation, however, attention is drawn to Section 448, which talks about punishment for false statement, and impose punishment by way of imprisonment which shall not be less than six months and can not be extended to 10 years with fine.
Section 449 of the Companies Act deals with false evidence, the filing of any wrong information under oath or Affidavit, etc. In this case, the minimum imprisonment shall be of 3 years which may extend to 7 years with a fine that can extend to 10 Lakh rupees.
Apart from these basic punishments which are prescribed under the Companies Act, the promoters should be very careful while applying for the name. It is the liability of the applicant to follow the name availability guidelines which has to be taken out from rules, pronouncement, notification, etc.
In case during a proceeding, it is found out that the name which has been approved for a company is undesirable and should not have been approved then all the stakeholders who are involved in that application shall be punishable with a fine of rupees 5 Lakh each.
We follow standard quality controls and always adhere to the rules book. Rest assured that the company which has been incorporated with us is legal, however in case you got your company or LLP incorporation from some other consultants then we can offer a free audit on the quality of incorporation for which you can contact us at +91-8010660055.
We are doing this free service in anticipation of future business which we are likely to receive from you, based on the quality of our service which will be demonstrated during that process.

About Setindiabiz

Setindiabiz is an organized team of experienced CA, CS, & Lawyers, duly supported by a pool of trained accountants & paralegal staff that provides quality & affordable compliance services to startups & small businesses in India. The views, statements and recommendations expressed in this article or post are only for the sole objective of providing information, and it does not constitute professional advice or recommendation of the company. Neither the author nor the company or its affiliates accepts any liability for any loss or damage arising from any information in this article or any actions taken in reliance thereon.
Setindiabiz Logo

Leave a Reply

Your email address will not be published.