Registration Procedure for Private Limited Company in India

by Enterslice ITES Pvt. Ltd. Start and Manage Business

What are the options available in the market for business?

In order to establish a business one need to understand, how he should set up the same, the structure of establishment is very important in order to survive in the market , and for that one need to analyze the availability of own resources and the market trend, given below are the options available to set up a business:

1. Company- It is a legal entity independent of its promoters, a corporate body having a common seal, holding the right to hold/sell/buy the property in its own name. There are at least two people as the shareholder and director, who can be the same persons. It is required by law that one of the directors must be resident in India.

2. Private Limited Company (PLC) – A company is a separate legal entity, must have at least 2 people as the shareholder and 2 directors, the 2 directors, and shareholder can be the same. It has shareholders as the owners and directors, who run the business. The directors have limited liability towards the shareholders and members. A private company can have a maximum of 200 shareholders in the company.

3. Public company –It is further divided into listed and unlisted. The listed public company is the company which has its stock/shares is listed on the Stock exchange; the unlisted public company is a public company which has its shares is not listed in the Stock exchange. A public company must start with 3 members and shareholders who can be same and in this also one director should be the resident of India.

4. One person, Company-A company can be formed in the form of a private company, with one director.

5. Sole Proprietor – It consists of the sole owner of a business and that person employs other people. The owner shall be responsible for all business decisions.

6. Hindu Undivided Family (HUF) – In a HUF the members of a family a business and the HUF is considered as a separate legal entity from its members.

7. Partnership Firm – It is formed by a group of people, who shall carry on business together and share profits and losses in a partnership firm. In a partnership firm, the partners can employee staff/other partners for the firm but the partners are considered as business owners and not employees of the Firm.

The limited liability allows the directors of the company to run the company without the fear of being held liable for such acts and omission (unless done with the wrongful intention) to its shareholders, also if one opts for private company registration, in that case, it is considered to be the most suitable option for a startup to start with. Even the banks and Financial Institutions lend loan to a Company form of business because of which it is advised to register a company for your business.

Registration Procedure for the formation of a Private Company:

a) The very first step is to obtain a Digital Signature certificate for the directors and such other required signing authorities of the company.

b) Thereafter apply for DIN (Director Identification Number) for the directors.

c) Check the name availability for the company.

d) Apply in Form SPICE-32 for the application to incorporate the company.

e) Prepare the memorandum of Association and Article of Association of the company basis the object with which it has formed.

f) Apply for PAN and TAN for the company. (It can be applied along with the application form SPICE-32)

Note that unlike before, now to apply for name availability there is no prior need to apply for the DSC. The Name application fees are Rs 1000/- fro one time, whereby you can propose two names with preference.

Where to apply for company registration?

Company registration procedure one need to apply at MCA (Ministry of Corporate Affairs), even for name application also MCA portal is to be used.

What are e-MOA and e-AOA?

The e-MOA and e-AOA have been introduced to simplify the procedure of the company registration and, it comes filled in automatically and as required changes can be made into and thereafter the subscribers are required to sign the same digitally.

The form once fully filled and an application being filed with MCA portal goes for ROC scrutiny and if all the details in the form are duly filled in along with the required documents is appropriate then a CIN (Corporate Identity Number) will be allocated.