Company Registration is mandatory under the Companies Act of 2013. This blog will guide you through the complete company registration process in India, with detailed explanations on costs, documents, and post registration compliances.
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Understanding the Company Registration process is extremely crucial to legally incorporate and operate a company in India. The process seeks to provide a distinct legal identity to the company which will benefit it in multiple ways. For instance, the company can have a separate bank account in its name to carry out all business transactions. Moreover, it is considered as a separate taxable entity under Income Tax Act. This limits the liability on the owners to use their financial credentials for business operations.
As a legal entity, the company can sign contracts and file suits in its own name, relieving the owners from using their personal names for these purposes. The biggest advantage, however, is the transparency in company’s data and financial information. All of the company’s data is publicly available for viewing and inspection on the MCA portal. This makes the entity more credible and reliable for investors, customers, creditors and Government agencies alike.
What is a Private Limited Company?
Private Limited Company is a Corporate Structure established and incorporated under the Companies Act of 2013. Section 2 of the Act defines a Pvt Ltd Company as a Company which restricts the rights to transfer its shares and limits the number of members to 200. Let’s simplify this definition a little.
Private Limited Companies are corporate structures co-owned by multiple shareholders who hold a part of the Company’s shares. The transfer of these shares is however restricted. The shares of a Private Company cannot be freely and publicly traded on Stock Exchange Platforms. Moreover, the general public is forbidden to hold the shares of a Private Limited Company. Coming to the second part of the definition, a Private Limited Company limits the maximum number of its shareholders to 200. This indicates that it cannot have more than 200 shareholders at a time. However their minimum number is restricted to 2.
Types of Private Limited Company
Private Companies under the Companies Act can be classified into a Private Limited Company, a One Person Company, and a Small Company. The categorization is based on the number of shareholders and investment limits in the companies. We have clearly explained the difference between all these structures below.
- Private Limited Company: Private Limited Companies are established and incorporated under the Companies Act of 2013. The minimum number of shareholders required to set up a Private Limited Company is 2. However, their maximum limit is capped at 200. Both individuals and non-individual entities can become shareholders in a Private Limited Company. They can either be Indian or Foreign entities. There is no restriction on the nationality of these shareholders.
- One Person Company: A One Person Company is a special type of Private Limited Company. The Companies Act restricts the number of its shareholders to 1. This sole owner is entitled to 100% shareholding and profits of the One Person Company. Moreover, unlike a Private Limited Company, the shareholder of a One Person Company must be an Individual Indian Citizen who is above the age of 18 years. Recently, the Government has removed the restriction previously placed on Non-Resident Indians to establish an OPC. So, both Indian Residents and Non-Residents can incorporate an OPC in India.
- Small Company: A Small Company is a Private Company established and operated with limited capital under Section 2 (85) of the Companies Act. As per the recent amendments of the Ministry of Corporate Affairs, a small company cannot have a capital investment exceeding Rs.4 crores. Even if an upper limit is prescribed by the Government, the same would not exceed Rs.10 crores. The definition also places restrictions on the turnover of a small company. The turnover of a small company cannot exceed Rs.40 crores. Further, if a greater limit is prescribed by the Government, the same cannot exceed Rs.100 crores.
Company Registration Process in India - A Stepwise Guide
To start a Private Limited Company, members or promoters have to fulfill certain minimum requirements regarding the number of shareholders, directors, name and registered address. We have mentioned all these requirements in the table below. After the requirements are met, the promoters will have to get the Company formally incorporated by the Registrar of Companies. This is an application-based process and we have discussed a stepwise guide for it below. Follow the guide for complete documentation and process of company registration.
Step 1: Acquire DIN & DSC of Promoters
All directors of a Private Limited Company must have their DIN or Director Identification Numbers before the process of company registration begins. To apply for Director Identification Number, applicants can submit form DIR-3 on the MCA website with documents like PAN, Address Proof and Photograph. Also, the authorised director must have a Digital Signature of Class 3 to certify the online company registration application.
Step 2: Select & Reserve Company Name
The name of your company cannot just be a random word. It must represent your brand and business activity to be recognizable by your customers appropriately. Additionally, the name must also comply with the MCA guidelines and must not be similar or identical to the name of an existing Company, LLP, or a registered trademark. You can approach us to check the validity of your company’s name before registration. After you’re sure that your company’s name is valid, get it approved and reserved by the ROC.
For reserving the company’s name, an application in SPICE Plus PART A form can be filed to the ROC. The applicant can propose two names per application at a fixed government fee of Rs.1,000. After thorough examination of the proposed names, the ROC is going to reserve the one that’s valid and available for the company. Upon Name Reservation, the company receives a Name Approval Letter, valid only for the next 20 days. The applicant must make sure that the Company Registration process gets completed within the validity period.
Step 3: Draft MOA & AOA
MOA and AOA of the Company are two important legal documents that must be submitted to the ROC for registration. These must be drafted on a stamp paper of appropriate value, and signed by all shareholders in the presence of a Public Notary. The Notary will then stamp the documents on which stamp duty and notary charges will have to be paid. MOA, also called a company’s charter, contains its basic legal information. AOA on the other hand contains the rules and regulations of internal management.
Step 4: File SPICE Plus Application
SPICE Plus or INC-32 is a web-based application submitted for company registration in India. It is divided into PART A & PART B. As mentioned earlier, PART A is filed for Name Approval of a Company. PART B, on the other hand, is an integrated application used for company incorporation. You can fill out this form and submit it on the MCA website to get your company registered by the ROC. We have discussed the documents and cost of its filing further in the blog.
Step 5: Get Company Registration Certificate
The SPICE Plus application, with all the documents and fees, gets examined by the ROC. Upon successfully verifying all the information, the ROC proceeds with the Company Registration process. It registers the company and issues a Certificate of Registration in its name. The Certificate of Registration contains the CIN or Corporate Identification Number as the unique identifier of the company. Also, along with the Certificate, the Company is allotted a PAN and TAN in its name.
Documents Required in Company Registration Process
Documentation is a very crucial aspect of the Company Registration process in India. Without the submission of adequate, accurate and updated documents, the chances of your application being approved and your company getting successfully registered are minimal. Here’s the list you must follow while preparing the documents for Private Limited Company Registration.
- Documents of Promoters: Promoters are the first shareholders and directors of a Company who have an interest or contribution in its foundation. All these promoters are required to submit a few personal documents for company registration. These include their PAN cards, Adhar Cards, latest utility bills as Address Proofs, and passport size coloured photographs.
- Documents of the Registered Office: Registered Office of the Company is the address with which the company gets registered or incorporated. The Proof of Address of this location has to be submitted for company registration. You can provide utility bills in the name of the company for this purpose. Make sure that such bills are recent and not older than 2 months from the date of application. Aside from this, the office property owner must issue a No Objection Certificate in the Company’s name.
- Legal Drafts & Forms: Legal Documents like the Company’s Memorandum of Association (MOA) and Articles of Association (AOA) also have to be drafted and submitted for Company Registration. While MOA contains the basic and foundational legal details of the company, AOA documents all of its internal rules and regulations. These documents must be stamped, notarised and signed by all the shareholders. Other than these, DIR-2, INC-9, and INC-14 forms have to be submitted. DIR-2 confirms the director’s consent to act as the same in the company. INC-9 and INC-14 contain declarations by first directors and a practicing professional respectively.
Time Taken for Company Registration Process in India
The duration of the company registration process in India can vary depending on several factors. On average, it typically takes around 10 to 15 working days to complete. However, the timeline may extend subject to factors such as the completeness of the application, accuracy of submitted documents, availability of required approvals, and the workload of the concerned Registrar of Companies (RoC). It is important to note that the process may take longer if additional clarifications or modifications are required during the scrutiny of the application. Seeking professional help from a Company Registration Service Provider like Setindiabiz can help streamline the company registration process and ensure its quick completion at affordable prices.
Overall Cost of Pvt Ltd Company Registration Process in India
The overall cost of Pvt Ltd Company Registration Process in India depends on several factors. These include the Registration Fees charged by the ROC, the Professional Charges of your Company Registration consultant, Stamp Duty applicable in the state, and the cost of acquiring additional documents like DSC and DIN. All these factors must be taken into account while paying the Company Registration Fees in India.
- ROC Fees for Name Approval: Getting the Company’s name approved by the ROC is an important prerequisite for company registration. The ROC fees for the same is fixed at Rs.1,000.
- ROC Fees for Registration: The ROC or Government fees for Company Registration depends on the company’s authorised capital. To extend support to small companies, the Government has eliminated any application fees requirement up to the authorised capital of Rs.15 lakhs. Beyond this limit, Company’s have to pay a fixed fee of Rs. 500 for Registration to the ROC.
- Stamp Duty Payable: Stamp Duty will be payable on getting legal documents like Company’s MOA and AOA stamped by a Public Notary. It differs for different states.
- Cost of Acquiring Class 3 DSC: Class 3 DSC of the authorised director is required for Company Registration. The cost of acquiring DSC depends on the Certified Agency you’re filing the application to and the validity of DSC you’re applying for. Different Certified Agencies charge different fees for issuing DSCs. Additionally, DSCs with higher validity periods cost more.
- Cost of Acquiring DIN for Directors: DIN Application for Directors is filed in Form DIR-3 which has a fixed application fee of Rs.500.
Compliances Post Company Registration Process
Soon after the company registration process is complete, the applicant must meet certain compliance requirements. These compliance requirements are mandatory and provided under the Companies Act. Their non-completion within the prescribed time may lead to severe penalties, fines, and even prosecution for the person in charge. Here’s a complete list of these compliances categorised on the basis of their due dates.
- Obtain Company’s PAN & TAN: You receive the Company’s PAN and TAN immediately after the company registration process is complete. There is no need to apply for the same separately.
- Open the Company’s Bank Account: Within 30 days from the date of incorporation
- GST Registration: Get GST Registration as soon as the company becomes liable to pay GST
- Shops & Establishment Act Registration: Within 30 days from the date of incorporation
- Professional Tax Registration: Within 30 days from the date of incorporation, if applicable in the state.
- 1st Board Meeting: Within 30 days from the date of incorporation
- 1st Annual General Meeting: Within 90 days from the date of incorporation.
- Appointing of First Auditor: Within 30 days from the date of incorporation
- Allotment of Stamped Share Certificates to all shareholders: Within 60 days from the date of incorporation
- Declaration for Business Commencement (INC-20A Filing): Within 180 days from the date of incorporation
How Setindiabiz Assists in Private Limited Company Registration Process?
At Setindiabiz, we assist businesses in navigating through the Private Limited Company Registration process in an easy and hassle-free manner. We provide complete documentation, application, and compliance support included in a Single Package at affordable rates. Our team is available 24*7 for support and grievance redressal. Additionally, our expert CAs, CS, and paralegal staff make sure your application and documentation is up to the mark! With our services, you get your Company Registration Certificate, Company PAN, and TAN in no time.
Conclusion
Successfully completing the Pvt Ltd Company Registration process in India requires a thorough understanding of all the aspects this blog discusses. From the steps of registration, to documents, fees and post registration compliances, having their complete knowledge ensures an easy, smooth and hassle free company formation process for you. Hopefully, this blog gives you all the necessary information regarding the same. If you still have any queries, you can contact us for a free consultation or post your questions in the comments section.
FAQs
Q1: What is the time taken to complete the Pvt Ltd Company registration process in India?
Time taken to complete the Pvt Ltd Company registration process in India can vary based on several factors. Typically, it takes around 10 to 15 days, from the date of filing the application. However, filing incorrect forms or documents and excess workload at the ROC Office may cause delays.
Q2: What are the minimum requirements for company registration process in India?
The minimum requirements for company registration process in India includes two shareholders, two directors, one resident director, a registered office address in India, and a valid name for the company. The promoters need to submit their KYC documents and an NOC signed by the owner of the registered office premises. MOA & AOA are two documents which need to be drafted as the company’s constitution documents.
Q3: What are the stages of a company registration process?
The stages of the company registration process includes name selection and reservation, drafting the MOA and AOA, filing the incorporation application to the ROC, uploading the required documents, and receiving the Certificate of Registration.
Q4: Is there a minimum capital requirement for Pvt Ltd Company?
There is no fixed minimum or maximum capital required to start a Private Limited Company. However, the company must have an adequate capital so as to conduct its business operations smoothly. This amount can be decided by the shareholders and must be mentioned in the MOA.
Q5: Is Company Registration process mandatory in India?
Yes, the Companies Act of 2013 makes it mandatory for all Pvt Ltd Companies to be registered in India. Operating a Company without registering it with the ROC deems it illegal.
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