INC-29 Company Registration Procedure in India

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INC-29 Company Registration Procedure in India

Company registration is generally a three-stage process with the new INC-29 form and if followed correctly a company can be incorporated within 14 working days. Also, one has to be prepared to wait unconditionally as at times the process may be delayed from the Registrar of Companies (RoC)’s side or the proposed company’s name may be rejected on first attempt. A thorough explanation of the procedure must be followed, along with the anticipated timelines and costs involved.

1. Obtaining Digital Signature Certificate (DSC)

Time Taken: 2 to 4 days

As the company incorporation is completely done online, the signature of the director of the company is required on all the electronic documents. It is sufficient to have one of the directors’ sign. For this, a Class-II Digital Signature Certificate (DSC) is needed, which is available from one of the six certifying authorities chosen by MCA. The rates of the vendors vary and the charges will include the cost of the physical USB token on which the certificate is deposited.

It takes two to five days because the hard copies of documents and forms have to be couriered to the vendor, ie., online legal service providers, including Vakilsearch, would, however, only needs self-attested soft copies to begin the process).

Documents to be submitted

1. Hard copy of the completed Class-II form

2. Copies of PAN card. In case of foreign national, copy of passport is accepted

3. Copies of address proof - either Voter id, passport, ration card, driving license or Aadhaar card. Even copies of utility bills like telephone bill, electricity bills are accepted. But they have to be in the name of the applicant and not older than two months from the filing of the form (12 months, in case of foreign national)

Important note: For all Indian residents, the documents have to be self-attested. In case of NRIs and foreign nationals residing in non-Commonwealth countries, the documents need to be notarized.

Common reasons DSC may get rejected

Typos and glaring errors may be unavoidable and following are some of the reasons for rejection of DSC

Acronyms instead of full names: While it may be usual for people to have their names abbreviated with surnames, it is a strict no when it comes to company registration. The Director names have to be mentioned full with right spelling, irrespective of what is mentioned on the ID/Address proof.

Spelling mistakes: No errors are acceptable in the names, even if they are minor.

Old bills: Only latest utility bills in the name of the applicant are accepted.

Prefixes: Do not prefix Mr. or Mrs. or Shri. etc.

2. Search for company name availability

Time Taken: 1 to 2 days (simultaneous with the DSC application)

Costs involved: Free

There is no necessity of waiting for long time finalize the name, in fact, it can be started once the application for DSC is filed. As the INC-29 allows only company name to be proposed, the MCA is very picky on approving the company name. Following the guidelines, the name can be selected without any hassles.

3. Drafting of AoA & MoA

Time Taken: 2 days

Costs involved: Rs. 2000 to Rs. 5000 per document

Upon finalizing the name, further definition of the proposed company has to be provided to the MCA in the form of Articles of Association (AoA) and Memorandum of Association (MoA). These can be drafted perfectly seeking the assistance of lawyers and have to be self-attested.

4. The right order of documents

Time Taken: 2 days

Costs involved: n/a

a.DIN Application: A maximum of three directors can apply for the Director Information Number (DIN). However, if there are more than three directors, DINs can be applied for exclusively. The requisites for the application are a passport-sized photograph, scanned copies of the PAN card (Passport in case of foreign national), soft copy of driver’s license/voter ID/latest utilities bill. All the documents have to be self-attested in case of Indian nationals. Foreign nationals residing in the commonwealth countries needs to get them notarized.

b.Name Approval: The name has to be finalized and the description of the company must be given in a single line.

c.AoA & MoA: The objective of the business should be mentioned in Articles and Memorandum of Association and in the MoA, the affidavit from all the subscribers in Form INC-9 has to be affixed.

d.Registered office verification: As part of verification of the office address, a copy of the latest utility bill of the office address, a copy of the rental agreement along with an NoC from the owner (if it is a rented property) and sale deed (if property is owned) are needed.

e.Declarations and appointment letters: Self-attested appointment letters of directors, Chief Executive Officer (CEO), managers, declaration by first director in INC-9, and declaration by the appointee director and managing director in the Form DIR-2.

5. Filing of INC-29

Time Taken: 1 day

Costs involved: Rs. 2,000 + authorised capital fee + stamp duty

It is important to thoroughly verify the form to avoid rejection and re-submission. Once it is filed, the RoC fees and stamp duty should be paid electronically. The fees of the RoC and stamp duty differ according to the authorized capital and location, respectively

6. Verification by RoC and Issue of Certificate of Incorporation

Time Taken: 2 to 8 working days

Costs involved: n/a

The next step is where the RoC validates the submitted documents. If any changes are required, the same will be notified to the applicant. If there are not changes, the incorporation certificate will be sent through email in 7 to 8 working days.

7. Obtaining TAN and PAN

Time Taken: 21 working days

Costs involved: Rs. 67 + Rs. 109

The Income Tax Act, 1961, needs each company to quote the registered Tax Account Number and Permanent Account Number. The same can be done through NSDL website.

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