Procedure for Company Formation INDIA

Company formation in India starts with filing of an application for name availability. The Formation of Companies in India are regulated by the Office of Registrar of Companies (ROC) in each State. The chosen name for the company should be unique across India. Usually in a day or two, concerned ROC approves names if the applied name is not similar to the name of an existing company and the proposed name is in accordan e with the Guidelines issued by the Ministry of Corporate Affairs (MCA).

Once the name is approved, Memorandum of Association (MOA) and Articles of Association (AOA) are drafted. On finalizing the MOA and AOA, the same should be subscribed (by own hand and signature) by promoters (first shareholders) for filing with the same with ROC, electronically. Along with these documents, Form 32 (details of directors) and Form 18 (address of registered office) are also filed.

After the filing of company formation documents, usually in a day or two, the Registrar of Companies of the respective State will scrutinize the incorporation documents and if the document found in order, the Company will be registered. Upon registration of the company, ROC will issue the Certificate of Incorporation and the company is ready for commercial operation. If the proposed company is a public company, the company Certificate of Commencement of Business is to be obtained before commencing any commercial activity in the company.

Steps to be taken to get a new company incorporated:

 Select, in order of preference, at least one suitable name upto a maximum of six names, indicative of the main objects of the company.

 Ensure that the name does not resemble the name of any other already registered company and also does not violate the provisions of emblems and names (Prevention of Improper Use Act, 1950) by availing the services of checking name availability on the portal.

 Apply to the concerned RoC to ascertain the availability of name in eForm1 A by logging in to the portal. A fee of Rs. 500/- has to be paid alongside and the digital signature of the applicant proposing the company has to be attached in the form. If proposed name is not available, the user has apply for a fresh name on the same application.

 After the name approval the applicant can apply for registration of the new company by filing the required forms (that is Form 1, 18 and 32) within 60 days of name approval

 Arrange for the drafting of the memorandum and articles of association by the solicitors, vetting of the same by RoC and printing of the same.

 Arrange for stamping of the memorandum and aticles with the appropriate stamp duty.

 Get the Memorandum and the Articles signed by at least two subscribers in his/her own hand, his/her father’s name, occupation, address and the number of shares subscribed for and witnessed by at least one person.

 Ensure that the Memorandum and Article is dated on a date after the date of stamping.

 Login to the portal and fill the following forms and attach the mandatory documents listed in the eForm

Declaration of compliance – Form-1

Notice of situation of registered office of the company – Form-18.

Particulars of the Director’s, Manager or Secretary – Form-32.

Submit the following eForms after attaching the digital signature, pay the requisite filing and registration fees and send the physical copy of Memorandum and Article of Association to the RoC

 After processing of the Form is complete and Corporate Identity is generated obtain Certificate of Incorporation from RoC.

Registration Procedure of A Private Limited Company

An entrepreneur should select few names for the company in order of preference (minimum 1), indicating the main objects of the company.

He must apply online for name availability after getting the digital signature of one of the proposed director. The individual can take e-Form 1A to ascertain the availability of name of company by paying a fee of Rs. 500/-. In case the proposed name is not available, he must then apply for a fresh name on the same form.

After the name of the company is approved, the individual can apply for registration of the new company within six months of the name approval. He also has to get the articles and memorandum of association drafted by professionals.

Proper stamping of the Memorandum and articles should be done. It should be signed by a minimum of two subscribers and witnessed by minimum one person.

The following documents should be filed with the Registrar of Companies online:

• Memorandum of Association (duly stamped).
• Articles of Association (duly stamped).
• The agreement, if any, which the company proposes to enter into with any individual for appointment as its managing or whole time director or manager.
• A power of attorney, if any (with prescribed stamps).
• E-Form No. 1 (with prescribed stamps) for incorporation of a Company.
• E-Form No. 18, stating situation of registered office.
• E-Form No. 32 and e-Form 32 Addendum for Particulars of appointment of managing director, directors, manager and secretary and the changes among them.
• Consent of candidate to act as a managing director or director or manager or secretary of a company and / or undertaking to take and pay for qualification shares.
• Document evidencing payment of prescribed registration and filing fee.

If the registrar is satisfied that all the requirements have been complied with by the companies, he will register the company and issue a Certificate of Incorporation of the company. The date mentioned in the certificate is the date of incorporation of the company.

As per Section 149(7) of the Companies Act, a private company can commence business right from the date of its incorporation.

Registration Procedure of A Public Limited Company

Public Limited Company also has to follow a similar procedure as in the case of a private limited company for registering itself. In addition to the procedure followed by a Private Limited Company, a person registering a public company has to obtain a Certificate of Commencement of Business before he can commence the business. This certificate can be obtained after obtaining the certificate of incorporation.

An entrepreneur has to do the following for obtaining the certificate of commencement:

File a declaration of compliance with the provisions of Section 149(2)(b) of the Act in eForm 20 and attach the statement in lieu of the prospectus(schedule III)

OR

File a declaration of compliance with the provisions of Section 149 (1)(a),(b),(c) of the Act in eForm 19 and attach the prospectus (Schedule II) to it.

Section 149 of the Act, deals with and explains the restrictions on the commencement of Business

Additional steps to be taken for formation of a Public Limited Company:

To obtain Commencement of Business Certificate after incorporation of the company the public company has to make following compliance

 File a declaration in eForm 20 and attach the statement in lieu of the prospectus(schedule III) OR

 File a declaration in eForm 19 and attach the prospectus (Schedule II) to it.

 Obtain the Certificate of Commencement of Business.

Additional steps to be taken for registration of a Part IX Company:

The Part IX Company is required to file eForm 37 and eForm 39 apart from filing eForm 1, 18 and 32.

The company is required to file eForm 1 first and then the company can file all the other eForms (18, 32, 37 and 39) simultaneously or separately

PROCEDURE FOR TRADE MARK REGISTRATION INDIA

In order to register your trade mark the following are the steps / procedure to be taken:

1. Identify the Mark / Logo to be registered as Trade Mark.
2. Search with Trade Mark Registry for the availably of Trade Name / Mark for registration.
3. Identifying the Class under which the Trade Mark to be registered.
4. Filing the application with Trade Marks Registry
5. Obtaining the acknowledgement form Trade Marks Registry.

After issuing the acknowledgment, Trade Marks Registry will publish the mark in the Trade Mark journal for public information and will call for objections if any. If there is no objection from anyone, the Trade Marks Registry will issue the certificate of Trade Mark Registration

Registrar of Companies

Registrars of Companies (ROC) appointed under Section 609 of the Companies Act covering the various States and Union

Territories are vested with the primary duty of registering companies floated in the respective states and the Union Territories and

ensuring that such companies comply with statutory requirements under the Act. These offices function as registry of records,

relating to the companies registered with them, which are available for inspection by members of public on payment of the

prescribed fee. The Central Government exercises administrative control over these offices through the respective Regional

Directors.

FAQ

1. What is a Company?

Company is an association of persons registered under the Companies Act 1956. It has a legal personality other than the persons owns or manage it.

2. Types of companies that can be registered in India

The following types of companies can be registered in India
a. Private Limited Company
b. Public Limited Company
c. Unlimited Liability Company
d. Companies not for Profit (Generally known as Sec.25 Companies)
e. Foreign Companies

3. What is a Private Company?

A Private Company is formed with minimum of 2 members and 2 Directors. Maximum number of members in a private company is restricted to 50.

4. What is a Public Company?

A Public Company is formed with minimum of 7 members and 3 Directors. No restriction on maximum number of members.

5. Non profit Organizations / Sec.25 Company

A company formed for not making profit the purpose of for promoting commerce, art, science, religion, charity or any other useful objects. This requires prior permission from the Central Government and the word Limited can be dispensed from the name.

6. Foreign Companies

7. Branch Office / Liaison office /

8. Limited Liability

Liability of the members of the company is limited to the extent of their shareholding in the company. The shareholders of the company will not be personally liable of the liabilities of the company.

9. Name of the company

The name of the company should be unique for registration. The name Private and Public Companies shall end with the words “Private Limited” or “Limited” as the case may be. For eg. ABC Private Limited / ABC Limited

10. Guidelines for selection of name of the company

As per the Guidelines of the Ministry of Corporate Affairs, the company should have different levels of Authorised Capital to include certain words in the name of the company. They are as follows: Key Words Capital required

1 Corporation 5 Crores
2 International, Globe, Universal, Continental, Inter-Continental, Asiatic, Asia being the first word of the name 1 Crore
3 If any of the key words at 2 above is used within the name (with or without brackets) 50 lakhs
4 Hindustan, India, Bharat Asia being the first word of the name 50 lakhs
5 If any of the key words at 4 above is used within the name (with or without brackets) 5 Lakhs
6 Industries / Udyog 1 Crore
7 Enterprises, products, Business, Manufacturing 10 lakhs

11. Importance of objects / activities of the company

The main objects for which the company is registered should be mentioned in the Memorandum of Association of the company.

12. Capital of the company

The capital of a company is the contribution of the shareholders towards the corpus of the company. The Authorised Capital of a company is the upper limit of capital which a company can issue.

13. Minimum Capital of the company

Private companies should have a Minimum Capital of Rs.1 Lakh and a Public Company should have Minimum Capital of Rs.5 Lakh for registration. The capital of a company can be enhanced by a Resolution by the Shareholders and subject to payment of rewired fee to the Ministry of Corporate Affairs

14. What is Digital Signature?

A digital signature is a type of asymmetric cryptography used to simulate the security properties of a handwritten signature on paper. Digital signature schemes normally give two algorithms, one for signing which involves the user’s secret or private key, and one for verifying signatures which involves the user’s public key. The output of the signature process is called the “digital signature.”

15. Directors Identification Number (DIN)

Directors Identification Number or DIN is an identification number issued by the Ministry of Corporate Affairs to a person who is a director or prospective director of a company. For obtaining a DIN, an online application has to be made to the Ministry of Corporate Affairs (www.mca.gov.in) and the documents supporting Identity / Address Proof has to be submitted to their office. On verification of the documents, MCA will allot the DIN.

16. Registration of Digital Signature / Role Chek

The Digital Signature has to be registered against DIN with the MCA. Registration of DIN with MCA is a prerequisite for accepting the forms signed with a Digital signature.

17. Directors of the company

Director of company is responsible for the management of the affairs of the company and is responsible for all the legal compliance under various laws.

18. What is DIN 1, 2, 3, 4 DIN

19. Shareholder / Member of a company

He/She is the person holding shares in a company.

20. Nominee Shareholder

He/She hold shares on behalf of someone.

21. What is Memorandum of Association (MOA)

MOA is the charter document, by which a company is registered. It contains name of the company, state in which the registered office of the company is situated, object of the company, capital and subscribers/ promoters/ first shareholders of the company.

22. What is Articles of Association (AOA)

AOA is the bylaw of the company. This document defines the relationship of members, directors. It may also restrict powers of directors, transfer of shares etc.

23. Subscriber to MOA

Subscribers to MOA are the promoters/ first shareholders of a company. They are the persons forming the company. By subscription, they are agreeing to take such number of shares in the company and legally binding themselves to the company to pay the amount of share subscribed.

24. Execution of MOA/AOA

Execution of MOA/AOA means signing of the MOA/ AOA. Subscribers has to write in his own hand his name, fathers name residential address, occupation, number of shares he agrees to take and sign the MOA document. Similarly, he has to write and sign AOA

25. Place of registration of the company

State in which the company is registered and address of the company.

26. Registered office of the company

Address of the company is called registered office. Company has to file notice of registered office in Form 18.

27. What is PAN

PAN means Permanent Account Number. This is the number every tax assesses need to be obtained from Income Tax department. PAN is used for filing Income Tax return. 28. What is TAN

29. Corporate Secretarial Service from BGS

BGS is a professional firm promoted by professional in corporate law.

30. MCA21 filing System

MCA means Ministry of Corporate Affairs, and MCA 21 filing system means filing of documents with MCA through the web site www.mca.gov.in

31. What is SRN?

SRN means Service Request Number, a unique number generated by MCA 21 while documents etc in MCA web site.

32. What is CIN?

CIN means Corporate Identification Number to identify a company in MCA web site.

33. Forms to be filed with MCA.

Company Law prescribes filing of forms based on some events, period in a company. These forms are electronic forms.

34. What is Form 1A?

Form 1A is the name application form. Incorporation of a company starts with filing of name application. Registrar of Companies, verify the name application and confirm the availability based on the name approval guidelines.

35. What is Form 1?

Form 1 is the statutory declaration to be filed at the time of incorporation of a company. This form accompanies, MOA & AOA.

36. What is Form 32?

Form 32 is the return of appointment/ cessation of Directors/Secretary of the company. This form also need to be filed alone with Form 1 for registration of a company.

37. What is Form 18?

Form 18 is the notice of situation of registered office. This form is filed at the time of registration/ change of address.

38. Certification of Forms to be field Company Law required certification of forms to be filed with MCA. The certification is done by Company Secretaries/ Chartered Accountants.

39. Certificate of Incorporation Up on registration of a company, Registrar of Companies issue certificate of incorporation confirming the registration.

40. Certificate for commencement of Business

This certificate is applicable to public companies. Before commencing operation, every public company has to file SLP and obtain Certificate for commencement of Business

41. What is SLP?

SLP means Statement of Lieu of Prostrates. This document is required to be filed by public companies before commencing the operation.

42. What is Statutory Meeting?

Every public company need to convene a meeting of shareholders with in such time.

43. Meeting of Companies

Decisions of managements etc in a company is taken at the meeting of shareholders/directors. Company Law prescribes minimum number of

44. Minutes of Meetings

Summery of business transacted at a company meeting need to be recorded in a minutes books. Maintenance of minutes is subjected to company law.

45. What is EGM?

EGM means Extra Ordinary General Meeting of shareholders of a company. EGM may be convened for taking some emergency decisions from shareholders of a company.

46. What is AGM?

AGM means Annual General Meeting. Every company is required to convene a meeting of shareholders in each year.

47. What is resolution?

Resolution means formal recording of decision of a business in a meeting.

48. Statutory Registers.

Company Law prescribed some registered to be maintained may a company such as shareholders register, directors register etc.

49. What is Special Resolution?

Resolution passed at a meeting of shareholders where vote castled in favour of the resolution is more than 3 times of vote castled against the resolution.

50. What is Ordinary Resolution?

Resolution passed at a meeting of shareholders where vote castled in favour of the resolution is more than vote castled against the resolution.

51. What is common seal?

Company is a legal person and company can not sign any document like a natural person. Company is executing documents through an impression seal and the same is called common seal.

52. What is Share Certificate?

Share Certificate is an evidence of share holding in a company.

53. What is E-Filing?

Filing of MCA Form through www.mca.gov.in is e-filing.

54. What is master Data?

Basic information of a company is stored in the master date and same is available in the MCA web Site.

55. ROC

Means Registrar of Companies.

56. MCA

MCA means Ministry of Company Affairs

57. Stamp duty for registration of a company.

Stamp laws in each state where the registered office situated stipulate stamp duty to be paid for different incorporation documents/ other company documents.

58. Registration Fee.

Government Fees payable for registration of a company is registration fees. These fees will vary on the basis of authorized capital.

59. Certificate of Incorporation

Registrars of Companies, upon satisfaction of documents filed for company formation register the company and issue a certificate which is Certificate of Incorporation