How to Incorporate a Private Limited Company under the Companies Act?

Last Updated at: Jul 06, 2021

Private Limited Companies are governed by the Companies Act, 2013 under the Ministry of Corporate Affairs (MCA). The MCA has made the process of company registration simple, thereby enhancing the ease of doing business in India. 

Read on to know how to incorporate a private limited company with the MCA. 

According to Section 3 (1) of the Companies Act, 2019, an organisation can be formed by:

  1. seven or more people, if the company has to be a public company; 
  2. two or more people, if the company has to be a private company; or
  3.  one person, if the company has to be One Person Company, that is to say, a privately owned company,

 Step-wise course of action of Company Incorporation Forms under Companies Act 2013

 Step 1: Obtain DIN of proposed directors

DIN is an 8-digit Directors Identification number. According to Section 153 of the Companies Act, 2013, each individual who is selected as director of the organisation will file an application in e-Form DIR 3 alongside recommended fees. But, the application for designation of DINs to the projected first Directors in regards to new organisations will be made in SPICe form.

The documents required for DIN are passport size photograph, self-attested address proof copy and PAN card copy of the applicant. 

Step 2: Obtain DSCs of subscribers

Digital Signature Certificates is a secured digital key that validates the identity of the certificate holder. A digital certificate can be handed electronically to confirm one’s identity, to access data or services online or to sign documents electronically. As the MCA has made it easy for  company registration online, DSC of each subscriber is required. The subscribers and witness/witnesses are expected to affix their digital signatures to the e-MOA and e-AOA.

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Subscribers are the shareholders of the company.

The documents required for DSC are ID proof, organizational PAN card, address proof, proof of Attesting Officer, Partnership deed, GST certificate. 

 Step 3: Verify Company’s name availability

Ensure availability of the selected name of the organisation at MCA website using the provided link:

 This step is highly recommended to ensure that the proposed name chosen does not contain any word as not entitled in Section 4(2) and (3) of the Companies Act, 2013 read the Rule 8 of the Companies (Incorporation) Rules, 2014.

 Additionally, the projected name of the organisation can likewise be held through the RUN web service. RUN (Reserve Unique Name) is simple to utilise web administration for booking a name for a new organisation or change of name for any current organisation. The applicant needs to apply through RUN for reservation of proposed organisation name alongside payment of relevant charges, which at that point will be handled by the Central Registration Centre (CRC).

 Step 4: Draft MOA & AOA of the firm

Memorandum of Association (MoA) stands for the deed of the company. It is an officially authorized document prepared during the formation and registration process of a company to define its relationship with shareholders, and it specifies the objectives for which the company has been formed. An Article of Association ( AoA ) outlines the rules and regulations of the internal management of the company. It outlines the duties, rights, and powers of the management of the company.

 It is an officially authorised document prepared during the establishment and registration procedure of an organisation to characterise its association with investors and it determines the aims for which the firm has been built. 

MOA and AOA forms can be drafted by the endorsed tables (for example Table A and Table F individually can be utilised to draft the MOA and AOA of the organisation bound by shares) including the objectives of the organisation and other standards and guidelines for the organisation’s administration.

Step 5: File SPICe Form – INC 32 

SPICe form (INC-32) deals with the single application for reservation of name, incorporation of a new company and/or application for allotment of DIN and/or application for PAN and TAN. This e-Form is accompanied by supporting documents including details of Directors & subscribers, MoA and AoA, etc. Once the e-Form is processed and found complete, the company would be registered and CIN would be allocated. Also, DINs get issued to the proposed Directors who do not have a valid DIN. Utmost three Directors are allowed for using this integrated form for filing application of allotment of DIN while incorporating a company. Moreover, PAN and TAN would get issued to the Company.

 E Form SPICe (INC-32) manages the single application for reservation of names, merging of organisation and additionally application for designation of DIN as well as an application for PAN and TAN. This e-Form will come along with supporting documents comprising details of Directors and endorsers, MoA and AoA and so forth. 

When the e-Form is prepared and complete, the organisation would be registered and CIN (Corporate Identity Number) would be distributed. Likewise, DINs get issued to the proposed Directors who do not have a legitimate DIN. A maximum of three Directors is taken into account utilising this coordinated form for applying the allocation of DIN while incorporating an organisation. Likewise, PAN and TAN will be handed out to the company.

Commute to the following link to know about ROC Filing

 SPICe Form is to be filed with the Registrar of Companies along with accompanying documents:

a) Form DIR-2 – statement from first directors

b) Statement by Directors- regarding credits

c) DIN affirmation by proposed Directors

d) INC-9 affirmation by first subscribers and directors

e) Directors’ interest

f) Memorandum of Association (can be recorded as eMOA in Form INC 33)

g) Articles of Association (can be recorded as eAOA in Form INC 34)

h) Statement by director if any agreement of Sector regulator is required

i) Registered office address proof

j) Proof of address and identity of all the subscribers

Step 6: File form INC 35 or form AGILE with RoC for GST, ESIC and EPFO registration in one go. 

Form AGILE is an application for GST number, Employees State Insurance Corporation registration and Employees Provident Fund registration. Startups who are looking to register their companies through SPICe e-form can likewise apply for GSTIN or Establishment code as provided by EPFO for Employer Code as provided by ESIC through e-form (INC-35). 

This procedure will be appropriate for companies incorporated under MCA through the SPICe application. Different classes of applicants (Tax Collector, Tax Deductors, Casual Taxable individual, ISD, and so forth) for GSTIN should pursue the current procedure of enlistment through Common Portal for GST registration.

Form AGILE is to be documented with the Company Registrar to apply for GSTIN or Establishment code as provided by Employees Provident Fund Office or Employer Code provided by ESIC. The SPICe application for company merger will be followed by a concurrent e-form INC-35 (AGILE) with impact from 31st March 2019, as informed via the Companies (Incorporation) Third Amendment Rules, 2019 dated 29th March 2019. 

However, it is discretionary to apply for GSTIN or Establishment code, provided by EPFO or Employer Code provided by ESIC at the hour of consolidating organisation, and documenting of INC-35 form alongside SPICe form is obligatory.

 Step 7: Get the PAN, TAN, COI, GSTIN, Establishment Code & Employer code of the organisation

When the SPICe and AGILE e-Forms are prepared and completed, the projected organisation would be enlisted with the Companies Act, 2013 and CIN would be allotted. PAN and TAN would be provided to the company as well as the GSTIN, foundation code under the EPFO and Employer Code under Employees State Insurance Corporation.

Post-Incorporation Procedures

 Step 8: Authentication of registered office in INC 22 form

According to Section 12, Companies Act, 2013, organizations must furnish their registered office address with the Registrar of Companies within 30 days of incorporation. Each organisation is required to outfit with the Registrar the authentication of its registered office within 30 days of its consolidation. As per Rule 25, the Companies Incorporation Rules, 2014, the confirmation of the enlisted office is required to be documented in form No.INC.22 alongside specified expenses.

 The Form INC 22 shall be filed together with the accompanying documents:

  • the enrolled document of the title of the locations of the registered office in the name of the firm; or
  • the signed and attested copy by a notary of rent or lease agreement in the name of the firm alongside a duplicate of rent paid receipt (the most recent one month);
  • the approval from the proprietor or approved inhabitant of the properties alongside the verification of possession or tenancy approval, to utilise the property by the organisation as it’s registered workplace; and
  • the most recent two months proof of any utility service like gas, telephone, electricity, etc. as address proof of the location in the document or the name of the owner.

 Step 9: Requirement of Company Name Board & official publications

According to Section 12 (3), the Companies Act, 2019, each organization shall hold

  • company’s name, and
  • the address of the company’s registered workplace,

also, keep the equivalent ready at the entrance of the office or spot wherein its business operations are running, in an obvious situation, in clear letters, in both English and the local language of the relevant place.

 The organisation ought to get its company name, registered office address and the Corporate Identity Number alongside phone number, email, fax number (assuming any), and website addresses (assuming any), all printed in business letters, letter papers, billheads and in every notification and other official publications.

 Step 10: Declaration to be documented by the directors in 180 days from the date of company incorporation in the INC 20A form.

 As per Section 10A, Companies Act, 2013, an organisation incorporated after the initiation of the Companies (Amendment) Ordinance, 2019 and having a capital share ought not to start any business or exercise any powers except if-

  1. A statement is documented by a director within 180 days of incorporating the company with the Registrar that each subscriber to the memorandum has share value consented to be taken by him or her on the date of creation of such an assertion; and confirmed in INC 20A form alongside the charges as might be agreed.
  2. The organisation has filed with the Registrar a confirmation of its registered firm in INC 22 form (which we have just talked about in Step 8.)

 Step 11: Selection of Auditor

As indicated by Section 139 (1) of the Companies Act, 2013, each organisation is required to name, an individual or a firm, as an auditor at the initial annual general meeting of the organisation, who will hold workplace from the end of that meeting till the end of its 6th annual general meeting.

 In this manner, an Auditor is to be selected by the recently incorporated organisation at its initial AGM.

On following all the above steps, an organisation can be incorporated and established effectively. After incorporation, the organisation accomplishes the status of a separate legitimate body. 

To know about company Inc : Click here

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