In India, the most common type of business entity is a private limited company. It is registered in accordance with the Ministry of Corporate Affairs' compliance and regulatory norms. We'll go over the complete process of forming a Pvt. Ltd. company in India in this article.
Step 1: Obtain a Digital Signature Certificate
The first step in company registration is obtaining a DSC for yourself. The board of directors or managing director of the private company needs to have their own DSC, as it is needed while filing e-forms and submitting tax returns. The DSC acts as a sort of verification or identification mark, allowing such personnel to authenticate documents being sent to the Government.
The Digital signature certificate is usually issued by a Certifying Authority, and is generally valid for either one or two years, after which the applicant must get the DSC renewed. All subscribers (people who promote the company and serve as shareholders), and directors (administrative heads of the company) of the Private limited company must obtain DSCs. The shareholders will routinely have to e-file their MoAs and AoAs, and these require authentication via DSC, whereas the directors need the DSC to procure DINs for themselves.
Documents Required for a Digital Signature Certificate:
- Passport-sized photo of the applicant
- Copies of the applicant’s address proof, self-attested
- PAN card self-attested by the applicant.
Step 2: Procure the Director Identification Number
The Director Identification Number, popularly known as DIN, is a unique identification number assigned to directors of companies by the Ministry of Corporate Affairs. The number is valid for a lifetime unless withdrawn, surrendered, or removed by the MCA. All the directors of the company need to procure for themselves unique DINs to register their company. Therefore, it is safe to say that to be a director of a legally registered company, a DIN is mandatory. Furthermore, it also comes to use when a director is appointed to another company or takes charge as the designated partner of an LLP.
Vakilsearch’s Company Name Generator has many company name suggestions for you to use on your new unregistered company.
Documents Required for DIN
- Passport-size photo of the applicant
- Self-attested copies of the applicant’s address proof
- PAN card self-attestation of the applicant.
Step 3: Reserve a Name for the Company
Before a company can file for incorporation, it needs to have a unique name for itself. To do so, the directors must submit an application asking to reserve a particular name for the private limited company via e-Form INC -1. The directors must ensure that the appropriate form is filled and that the required processing fees have been paid.
One single application can contain a maximum of 6 different names, ranked in order of their preference along with why the name is a good fit for the company. Government officials will then check the availability of each name and then approve or reject the application accordingly.
Most directors hire professionals to check the availability beforehand, to avoid any confusion later on. It is up to the Registrar of Companies to decide whether to approve or reject the application.
General Principles for Naming a Private Limited Company:
- The name must be easy to remember, as well as spell
- It should provide the company with a unique identity
- The name must be short, simple, and creative
- Name must not contain within it any words which are derogatory or deemed unparliamentary
- It must not contain words that are offensive and prohibited
- It must not infringe any legal trademarks registered earlier
- The name cannot be similar or identical to any other company’s name.
If approved, the RoC reserves the name for 60 days, within which the company must apply for incorporation. If the company fails to do so, the name shall lapse and the entire process will have to be repeated, for the company to file its incorporation.
Step 4: Obtain the Certificate of Incorporation
Once an appropriate name is reserved, the company must apply for incorporation. Furthermore, it must also file an online application for registration of a private limited company via the SPICe forms (simplified proforma for incorporating companies electronically).
- The officials must draft a Memorandum of Association (MoA) and Articles of Association (AoA) for the private limited company
- The MoA describes the company’s scope of operations, lists out its objectives, and also names its activities
- On the other hand, the AoA describes the nature of operations of the company and explains how its administration will carry out its responsibilities
- Both of these documents must be listed in the SPICe forms after being authenticated via affixing DSCs
- If the RoC is satisfied with the application, they will approve the application and the company will receive a Certificate of Incorporation, which contains the PAN of the newly formed company.
Supporting Documents to Register a Private Limited Company
- NOC from the owner of the office premises if it is rented or leased
- Utility bill from the office space
- Copy of the lease agreement/rental agreement/property certificate
- Form DIR-2 showing director’s consent
- Affidavit of first shareholders and directors via INC-9
- Self-attested proof of identity of the first directors and subscribers.
Once a company receives the Certificate of Incorporation, it becomes a legal entity and can start functioning as a Private limited company within India. From then on, the directors, administrators, and promoters can commence their operations. The company must deposit the share capital as listed in the company’s account as soon as possible. The CoI and other details about the company’s creation will be listed on the MCA website.
How Vakilsearch Can Assist
Obtaining all these documents is really a challenge, so seek the help of professionals. Registering a company is quick, easy, and can be done online with Vakilsearch in 3 simple steps:
- We help you register your directors with the Ministry of Corporate Affairs (MCA)
- Vakilsearch helps you pick the right company name
- We draft and file the documents required for your company registration: https://www.mca.gov.in/mcafoportal/showCheckCompanyName.do ( including MoA and AoA).
- Difference Between Private Limited Company & Public Limited Company
- ROC compliance checklist for Private Limited Companies 2020
- What Is the Cost Of Legal for Startups
- Steps for Registering a Company in Pune