Incorporating a private limited company

HEY, FRIENDS ARE YOU LOOKING FOR DOING BUSINESS IN THE REPUBLIC OF INDIA?

Then what are you waiting for, let's start with incorporating a private limited company which is the most popular and effective medium for doing business?

We are here to help you out in the process of incorporating a company. In this article we will talk about 'INCORPORATING A PRIVATE LIMITED COMPANY' as per Indian Law

Before starting the article let's take a brief look on:

ADVANTAGES OF PRIVATE LIMITED COMPANY

1. Separate Legal Existence

The company is separate from its owners, Directors, Managers, shareholders and employees etc.

2. Limited Liability

The Company is a separate legal entity and its Liability is limited to an extent of its Share Capital or the guarantee provided.

3. Fund Raising

The company can raise funds from the Venture Capitalists or Angel investors.

4. Perpetual Existence

Once it is registered it lives forever until and unless it is not winded up by the Promoters or the Government.

5. No Minimum Capital

No minimum capital is required to form a Private Limited Company

6. FDI Allowed

In Private Limited Company, 100% Foreign Direct Investment is allowed that means any foreign entity or foreign person can directly invest in a Private Limited Company

Now what are the provisions of the Companies Act, 2013 about company incorporation ?

PRIVATE COMPANY

Section 2(68) of Companies Act, 2013 defines private companies.

According to that, private companies are those companies whose articles of association restrict the transferability of shares and prevent the public at large from subscribing to them.

MINIMUM REQUIREMENT FOR PRIVATE LIMITED COMPANY

DOCUMENTS/INFORMATIONS REQUIRED FOR INCORPORATION

• Latest passport size photograph of Member and Directors
• PAN Card of the Member and Directors
• Identity Proof of the Member and Directors of the proposed Company; (Aadhar /Voter ID/Driving License/Passport)
• Passport in case of Foreign Nationals
• Email ID and phone no. of the company
• Registered office; NOC for the registered office and utility bill (electricity bill/mobile bill/telephone bill) not older than 2 months.
• Email ID and Phone no. of the Directors
• Details of subscribers
• DIN of the proposed directors (if they do not have the DIN then for taking DIN we have to file the Form DIR-3 and documents which are required in preparing the DIN are in the end of the article '*')
• What will your authorized and paid up capital
• The Name of the Bank in which the account of the company needs to be opened (ICICI /HDFC /Kotak /SBI /BOB /IndusInd /PNB /Axis).
• Details of the shares to be subscribed by the subscribers.

PROCESS OF INCORPORATION OF PRIVATE LIMITED COMPANY

1. Obtain Digital Signature, if not

2. Obtain Director Identification Number - We can take it in the form also

3. Name Availability

The name must be unique and also not similar with any registered entity. While checking the name availability we also need to check the trade mark if any registered under the proposed name.

we can apply two names simultaneously for a company through incorporation form i.e. SPICE+ (part A) and filing fee for the same is Rs. 1000.00 only in case our applied name is rejected then only one resubmission is allowed for the name approval with the same fee of Rs. 1000.00.

4) E-filing for incorporation of a Company

Once the name is approved, an online application is required to be filed through SPICE+ PART B along with the requisite documents as stated above. The MOA as well as AOA shall be filed online. In Part B of the spice form we can apply for the following:

• Incorporation
• DIN(Director's Identification Number) allotment
• Mandatory issue of PAN
• Mandatory issue of TAN
• Mandatory issue of EPFO registration
• Mandatory issue of ESIC registration
• Mandatory Opening of Bank Account for the Company and
• Allotment of GSTIN (if so applied for)

5) CERTIFICATE OF INCORPORATION

Once the company incorporated we will get the certificate of incorporation [Pursuant to sub-section (2) of section 7 and sub-section (1) of section 8 of the Companies Act, 2013 (18 of 2013) which contains the Name, CIN, PAN, TAN No. and date of incorporation of the company.

*If proposed directors do not have DIN, we would require following documents as below:

• Residential proof (Bank statement/ Electricity bill/ mobile bill)- not older than 2 months
• Identity proof (Passport/DL/Voter ID)
• Passport Size photo
• Email ID and phone No
• PAN and Aadhaar
• Education Qualification
• Occupation
• Place of Birth
• Duration of stay at the present address