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How to Register a Company in India - Requirements and Process

How to Register a Company in India - Requirements and Process

Binoy Chacko
15th Apr 2019
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How to Register a Company in India


Company registration in India is regulated by the Companies Act, 2013, and administered by the Ministry of Corporate Affairs (www.mca.gov.in). Today, company registration and other regulatory filings are paperless; documents are filed electronically through the MCA website and is processed at the Central Registration Centre (CRC).


MCA21

In 2006, he Ministry of Corporate Affairs has transformed the processes of company incorporation and regulatory compliance filing with the introduction of an e-governance initiative ‘MCA21’


Central Registration Centre (CRC)

Today, company registration and other regulatory filings are paperless; documents are filed electronically through the MCA website (and is processed at the Central Registration Centre (CRC), a dedicated backoffice for Company and LLP Registration process.


Company Registration process in India is completely online. Upon completing all registration formalities, the Registrar of Companies’ issues a digitally signed Certificate of Incorporation (COI). Electronic certificates issued by the ministry can be verified by all stakeholders on the MCA website itself.


A.   Limited Company – Different Types and Classes


A ‘Limited Company’ is a business organization registered under company laws for doing business in a particular jurisdiction. It is an association of real persons and/or body corporate (Companies and LLPs) registered under relevant laws. It is one of the most accepted business organizations in India.


For administrative and other requirements including compliance, a company is classified as

a.    One Person Company (OPC)

b.    Private Limited Company

c.    Public Limited Company


1. One Person Company

This category of company is a new creation after the introduction of Companies Act,2013. Basically OPC is a private company with one shareholder. The main features of OPC are;

  • Single shareholder
  • Board may have one or more directors
  • Maximum share capital of an OPC is Rs.50 lakhs
  • Maximum turnover allowed in OPC is Rs.200 lakhs
  • Conversion to private limited is only possible after two years of existence.


2. Private Limited Company

It is the most common form of company for doing business in India. A ’private company has the following features and restrictions (for registration purposes):

  • The minimum and maximum numbers of shareholders are two and two hundred respectively.
  • The minimum number of directors is Two.
  • Share transfers can be restricted as per articles of the company.
  • A private company cannot accept deposits from the public; only loans and deposits from the company’s shareholders, directors and their relatives.
  • A private company cannot issue shares to public.
  • Compliance and regulatory requirements under applicable company laws are fewer and simpler as compared to requirements prescribed for a public company.
  • The name of the company should end with ‘Private Limited’.


3.Public Limited Company

Typically, large-sized businesses and/or stock exchange listed entities are incorporated as public companies. Public companies have the following features:

  • The minimum number of directors is three; while the maximum number is twelve or other similar number as approved by the government.
  • The name of a public company ends with ‘Limited’.
  • A public company can issue shares to the public subject to Government Regulations.
  • The minimum number of shareholders allowed is seven and there is no restriction on the maximum number of shareholders.


B.   Requirements for Company Registration

Requirements and process of registration depends on the type of company. These are minimum shareholders and directors, etc for different types of Companies. Before starting the process, keep in mind the pre-requisites for company registration as given below:


a. Shareholders:

To register a Private Company, there should be a minimum of two shareholders and for Public Company it is seven. OPC should have only 1 shareholder. The first shareholder(s) should execute the Memorandum and Articles of Association for registering the Company.


b. Directors:

A Private Company should have a minimum of two directors and a Public Company should have minimum three directors and an OPC should have minimum 1 Director. Only individuals can be designated as directors of a company. Where a new company is registered by two or more existing companies or LLPs, the promoter company or LLP can nominate individuals as directors of the new company. An individual should hold a valid DIN to become a director of a company.


c.Digital Signature Certificate

All the initial shareholders should have valid Class 2  Digital Signature Certificate issued by a Certifying Authority (CA) under Information Technology Act 2000.


d.Share Capital of Company

i) Authorised Capital

Authorised Capital or Registered Capital of a company is the upper limit of capital that a company can issue shares and collect money from shareholders. Company registration fee is payable to ROC and will be calculated on the basis of Authorised Capital. There is no requirement as to minimum Authorised Capital for registration of Company.


ii) Subscribed Capital

Subscribed Capital refers to the amount of capital agreed to be brought in by the shareholders to the company. There is no requirement as to minimum Paid-up Capital for registration of Company. However, there must be nominal amount to be subscribed by the first promoters of company. (1 share of Re.1.00 or 1 share of Rs.10.00 etc)

To commence the business of a company after incorporation, a declaration has to be filed with the Registrar of Companies that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him. This declaration has to be filed by the company within a period of 180 days of the date of incorporation of the company in Form No.INC-20A.


iii)Paid up Capital

Paid up capital of a company refers to the amount of capital actually brought in by the shareholders to the company.


e. Company Name

Company name selection is important for speedy registration of a company. Company Name approval and allotment process in India is administered by the Ministry of Corporate Affairs (MCA) as per the Company Name Availability Guidelines issued under Companies Act 2013.


Promoters have to Select a Company Name as per Company Name Availability Guidelines prescribed by the Ministry of Corporate Affairs.


f. Registered Office Address

Registered Office refers to the official correspondence address of a company or its principal place of business. The address of the Registered Office will be used for all official communications of the company. At the time of registration of a new Company, there are Two options to record the Registered Office Address:


A company must have a registered office capable of receiving and acknowledging all communications and notices as may be addressed to it. Within 30 days of incorporation the company shall furnish a verification of its registered office to the Registrar of Companies in Form 22.


There are 2 option to the promoters to choose the Registered office address

i)Temporary Address:

Use an address as Temporary Registered Office for Registration and to file the Permanent Address documents within 30 days of Company Registration.

ii)Permanent Address:

Use a Permanent Address for the Company at the time of Registration itself and in this case, there is no filing required after the Registration of the Company.

In both the cases, the address refereed on the registration forms shall be recorded in the Certificate of Registration. Any change in address after the Company Registration will not be reflected on the Certificate of Incorporation.


C.   Documents Required from Shareholders and Directors

1. Identity Proof

  • Permanent Account Number (PAN) Card
  • Aadhaar Card / Passport / Driving License / Voter Identity Card
  • Address Proof
  • Telephone Bill / Mobile Bill
  • Electricity Bill / Water Bill
  • Bank Statement /Bank Passbook with latest transaction (Any one of the Document not older than 2 months)

a. Telephone Bill / Mobile Bill/Electricity Bill / Bank Account Statement must be in the name of applicant and should not be older than 2 months

b. If the documents are not in than English, it should be translated to English


2. Passport size Photographs of Shareholders and Directors


3. Registered Office – Address


Address Proof - In the name of the Owner of Address. Documents such as Electricity Bill, Telephone Bill, Gas Bill or Water Bill (Not older than 2 months); OR Latest Tax Paid Receipt or Copy of Registered Sale Deed.


Make sure address proof contains complete address with Name of owner of premises / Door No / Street Name / Village / Town / PIN etc. If the Address on document such as Electricity Bill is incomplete, additional Address / ID document of owner with complete address also to be arranged for submission to Registrar of Companies.


No-Objection letter from the Owner of Address to use the address ad Registered office of the Company.

Note: If the Address facility is availed from a Shared Office Service provider, a copy of Electricity Bill / Tax Receipt with a copy of Lease Agreement with specific powers to sublease or issue NOC letters for use of premise as Registered Office address under Companies Act is also required.


D.   Execution of Documents and create electronic documents for Filing with MCA

In addition to the Identify and Address documents of shareholders and Directors, the following documents are to be executed by the promoters of Company:

1.    Consent to Act as Director: Form DIR-2

2.    Affidavit by Subscribers & Director: INC-9

3.    No-Objection Letter for Registered office of the Company

4.    Declaration for Certification of DIN / Engagement Letter to a Professional for Certification.


In case of Company / LLP is a shareholder and / or if the proposed name of Company is similar to an existing company / LLP, the following additional document are also required:

1.    Documents Required from Company / LLP (If shareholders are Body Corporate)

2.    Authorisation for execution to an individual for execution of Company Incorporation Documents

3.    NOC / Authorisation for use of Name / Trademark, if any


E.   Company Registration Process


1. Company Name Application

The applicant has two option to proceed with Company Name Application.

Option 1.        Get the Company Name Approval under RUN Application process and proceed with File an application for Company name approval first and the go for Company Registration; or

Option 2.        File the Integrated Company Registration Form. The Company name can be reserved through SPICe incorporation process. In case of name application through SPICe form, only one name can be submitted for approval. However, if the first applied name is rejected, the application can be resubmitted 2 more times with alternate names.


2. Preparation and Filing of Company Incorporation Documents with MCA:

Under the SPICe incorporation process,  Company Incorporation Process consists of preparation and filing of the flowing E-Forms:


a. e-Form INC-32 - Simplified Proforma for Incorporating Company Electronically (SPICe)

b. e-Form INC-33: e-Memorandum of Association (SPICe MoA)

c. e-Form INC-34: e-Articles of Association (SPICe AoA)


All the documents executed / notarised / attested as per documentation requirements has to be attached to the e-Form INC-32 / 33/ 34 and the e-Forms has to be digitally signed with the Digital Signature Certificate (DSC) of all the proposed shareholders / representatives.


There is NO Registration Fee payable for filing of e-Form INC-32 for all type of Companies if the authorised capital is less than or equal to Rs.15 Lakhs at the time of registration. However, filing fee for e-Form INC-33 / 34 and stamp duty is applicable for registration of any Company.


3. Processing of e-Forms by the office of Central Registrar of Companies:

The Central Registration Centre (CRC) processes the application and if found the details / documents are in order, the Central Registrar of Companies shall register the Company and issue the following:

1.    Company Incorporation Certificate

2.    DIN for Directors

3.    Permanent Account Number (PAN)

4.    Tax Collection and Deduction Number (TAN) to the New Company. 


F.   Commencement of Business by Company

A company incorporated on or after 02.11.2018 and having a share capital can commence any business or exercise any borrowing powers only after complying the following requirements:


1. Filing a declaration with the Registrar of Companies that every subscriber to the memorandum has paid the value of the shares agreed to be taken by him on the date of such declaration. This declaration has to be filed by the company within a period of 180 days of the date of incorporation of the company in Form No.INC-20A


AND 


2. Filing of INC-22 for verification of its registered office if the company was registered with a temporary address while filing SPICe Form INC-32.


If a company makes any default in complying with the above requirements, the company shall be liable to a penalty of fifty thousand rupees and every officer who is in default shall be liable to a penalty of one thousand rupees for each day during which such default continues but not exceeding an amount of one lakh rupees.


If the company has not filed the declaration within a period of 180 days of the date of incorporation of the company, the Registrar may initiate action for the removal of the name of the company from the register of companies on the reasonable belief that the company is not carrying on any business or operations.

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