COMPANY FORMATION
A Company is a type of entity where the liability of members or shareholders is restricted to their shareholding in the company. Companies in India are governed by the Companies Act, 2013 (as well as its rules and notification) along with the rules and regulations stated in the Memorandum and Articles of Association of the Company.
Private Limited Company
A Private Limited Company has the following characteristics,
- It cannot issue shares to the general public; it can issue shares to either its members or a selected group of individuals.
- The shares of a Private Limited Company cannot be traded in the public market.
- Disclosure and compliances for a Private Company are fewer as compared to a Public Limited Company.
- Such companies must use the word “Private Limited” at the end of its name, for e.g. ABC Private Limited.
- Private Company should have a minimum of 2 directors. Age of directors should be 21 or more.
Points to be noted while setting up a company
- Company setup is the most familiar and general approach to start the business than other types of entities.
- It takes a feasible time to set up as compared to other entities.
- A Company has to adhere to more compliance for maintaining transparency.
- In case any compliance is not completed on time, then it will attract some legal proceedings with penalty.
- As there is a legal process to dissolve the company also.
- Private limited develops a good business culture among society.
List of documents and information required to set up a Private Limited Company
- Proposed name of the Company.
- Name of the proposed directors and a total number of directors.
- Name of the proposed shareholders.
- Address proof and identity proof of the directors and shareholders.
- Address proof of the registered office of the Company. (Utility bill).
- The total paid up capital and authorised capital of the Company.
- Contribution of each shareholder in the total capital of the Company.
- List of business activities the Company.
- A digital signature of all the subscribers.
- Passport size photo, self-attested address proof and pan card of applicant required.
- Email Id and phone number of promoters.
PROCEDURE TO REGISTER A PRIVATE COMPANY
For incorporating a Private limited company,E-forms are to be filed or uploaded after login to Ministry of Corporate Affairs (MCA) website:
There are two ways to start the incorporation of private company
- For reserving and approval of proposed name
Spice Part-A Form is required to be filled and submitted if you want to reserve the name first. Pay fees accordingly and the Ministry will approve the name and generate a name approval letter. Here a name reservation facility is available.
- Direct fill Spice Part-B Form
For direct incorporation, just fill the information of name and proceed for incorporation form. Here no need to pay to for Run approval.
STEP BY STEP PROCESS
- Private Limited Company Compliances Obtain Digital Signature Certificate i.e., DSC of all the directors which is in the form of pen drive or a token. DSC needs arise at the time of uploading e-forms.
- Select the company name and prepare the MOA i.e., objectives. Thereafter, file Spice Part A form for name reservation. (optional, if required to reserve the name).
- Next, prepare the documents i.e., Authorization letter, DIR-2, declaration, NOC, specimen signature to attach in Spice Part B form for company incorporation.
- Arrange the documents i.e., latest electricity bill/mobile bill/gas bill, rent agreement (if rented property), address and id proof of all directors and subscribers.
- Fill the Spice Part B, Agile pro, Spice MOA, Spice AOA form, download it and affix the DSC of all subscribers and directors.
- Upload the forms on the MCA website after login, and then challan will get generated.
- After analysing and scrutinizing the forms, if the department is satisfied with legalities “Certificate of Incorporation” will be issued on registered mail id.
- Director’s DIN allotment letter, company PAN and TAN would also be sent on registered mail id after company incorporation.
Note: Certificate of Incorporation is a document which signifies that a company has been incorporated.
OUTPUT DOCUMENTS
- Certificate of Incorporation
- Director Identification number
- Company PAN and TAN
- Company Bank account
- PF and ESIC
- GST number (optional)
- Profession tax (only for Maharashtra)
CONCLUSION
You can incorporate a company with proper filling up the forms as available on the MCA website as per companies Act, 2013. Running a business is a very crucial phase for any businessman as one has to comply with all legal requirements in addition to inaugurates the business market. Approaching professionals at the local area is difficult and costly in today’s time but Outsource provides you with the services of online registration of the company at affordable prices and quick turn-around time without any hassle.
