In India, individuals who want to set up an employer and character legally get themselves registered as a business enterprise and work in compliance with the Ministry of company Affairs. A non-public restriction is the most preferred option with the aid of groups these days. The different types of enterprise structure that exist are Proprietorship firm Registration, Partnership firm Registration, One person company (OPC) Registration, Limited Liability Partnership (LLP), NGO Registration and so forth.
Choosing the proper commercial enterprise shape is the first and a very vital step before initializing the corporation registration method. selecting the right business shape is important because you possibly can avail of various tax return advantages depending on the business shape. It is critical to observe that each commercial enterprise structure has extraordinary set policies, regulations and compliances that need to be met.
Understanding Private Limited Company Registration
Private limited companies in India are privately held entities having limited liability and are the most preferred business throughout the nation. A private limited company registration allows clear division between its shareholders and directors. This business structure is the most favored business structure because it comes with numerous advantages. It enjoys limited liability protection, formation and maintenance becomes easier and it also gets represented as a distinct legal entity. The following are the characteristics of a private limited company:
- Protection of limited liability
- Status as a separate legal entity
- Minimum number of directors and shareholders
- Minimum share capital
- The name of the company must consist of “Private Limited” in it.
- Restricted transfer of shares
- Public invitation is prohibited
- Compliance with ROC
Pre Guidance of Company Registration in India
Organization Registration in India is a step-with the aid-of-step technique that needs to be accompanied cautiously because it includes distinctive compliances in each step. the subsequent steps have to be followed for registering a agency in India:
Acquiring a DSC
A Digital Signature Certificate has to be acquired and secured by every shareholder and director. The DSC certificate is issued by the Controller of Certification Agencies (CCA). Essential documents like PAN, aadhar, and passport-sized photos must be submitted while applying for the DSC.
Obtaining the DIN
Each director must obtain a DIN or Director Identification Number that is unique for each director. It is essential for the directors as it needs to be mentioned in the company registration form.
Reserving a Company Name
One can select and reserve the company name by filing the SPICe+ Part A of the form which consists of options for mentioning the class, company type and sub-category of the company.
Submission of Company Details
Details of subscribers and directors, registered address of the office, PAN and TAN applications stamp duty and other relevant documents must be attached while submitting the form. Compliance with the Company Act 2013 must be ensured.
Preparation and Submission of MoA and AoA
The SPICe+ MoA and AoA are drafted and attached to the application form. After the submission of the application form along with the documents, it is reviewed by the Registrar of Companies. If the documents are clear and are in compliance, then the Certificate of Incorporation is issued and the company gets registered.
Incorporation of a Private Limited Company in India
A private restricted corporation enterprise is the most appreciated enterprise shape amongst entrepreneurs. For a successful incorporation of a commercial enterprise, one needs to be privy to the rules and restrictions even as putting in a private constrained organization.
Personal limited companies are ruled with the aid of the Companies Act 2013 and are registered below the Ministry of corporate Affairs (MCA). The organization registration method has been simplified by means of the MCA which has additionally improved and simplified the conduction of business in India.
A non-public restricted business enterprise should be formed according with section 3(1) of the Companies Act 2019 by way of:
- In case, if the company is public, it should have at least seven or more people in the company.
- A private company can have two or more people.
The process of incorporating a private limited company can be done by following the steps mentioned below:
Obtaining DIN for all the Proposed Directors
Each former director has to submit an application in e-Form DIR 3 along with the relevant fees, as per Section 153 of the Companies Act 2013. Director Identification Number is an eight-digit number for identification unique to each director.
Obtaining Subscriber’s DSC
Digital Signature Certificates or simply DSCs serve as secure digital keys that can verify the identity of the certificate holder. A DSC is used to sign papers electronically, validate one’s identity and get access to data and online services. Both MoA and AoA must consist of digital signatures of the witnesses and subscribers.
Confirming the Company Name
A unique company name has to be chosen and confirmed that the chosen company name is present on the MCA Company Name search website. The RUN (Reserve Unique Name) application on the MCA portal can be used to reserve a company name or to rename as well. Relevant fees have to be paid along with the form. This application is handled by the Central Registration Centre (CRC).
Creating the MoA and AoA
Memorandum of Associations and Article of Associations has to be created. The MoA refers to the company’s chart whereas AoA consists of the privileges, authorities and responsibilities of the company management.
Filing the SPICe form- INC 32
The SPICe form is an integrated form that can be used for different applications PAN and TAN applications, new company incorporation, name reservations, and DIN allocation applications. This also includes documents including the MoA and AoA along with the list of subscribers and directors. Once the e-form is reviewed and deemed completely, the firm gets registered and CIN (Corporate Identification Number) is assigned to the company.
Conclusion
In India, registering a company is advantageous as it allows distinction between its shareholders and directors and also represents the company as a legal entity. A private limited company is the most favored business structure all over the nation. Choosing the right business structure before getting registered is a very important step as every business structure has different compliances to be met. Registering a business is a stepwise procedure that an individual must follow in order to get their company registered legally.
FAQs
1. Why is Company registration done?
Company registration is done because it is advantageous to the business entities to perform business as it provides legal protection, easy access to funding, promotes credibility, etc.
2. Why is it necessary to choose the right business structure before company registration?
This is because every company structure has a different set of compliances to be met. Therefore, it is necessary to choose the right business structure.
3. What are the different types of business structures?
The different types of business structures are:
a. Partnership Firm Registration
b. Proprietorship Firm Registration
c. Limited Liability Partnership(LLP)
d. One Person Company(OPC) Registration
e. NGO Registration
4. What is the use of a Digital Signature Certificate?
A Digital Signature Certificate is used for obtaining digital signatures or services online and information from the internet.
5. What is CIN?
CIN stands for Corporate Identification Number is issued after reviewing the application form submitted by the company for its registration. This number is used for identifying the company among other existing companies.
