The steps involved in the registration of a Company under the Indian Companies Act, 1956 are as under:
Step 1: Obtain Director Identification Number (DIN)
Obtain the provisional DIN by filing application Form DIN-1 with an application fee of Rs. 100. This form is on the Ministry of Corporate Affairs 21st Century (MCA 21) portal. The provisional DIN is immediately issued. The application form must then be printed and signed and sent for approval to the ministry by courier along with proof of identity and residence. The concerned authority verifies all the documents and, upon approval, issues a permanent DIN. The process takes about 4 weeks.
Step 2: Obtain digital signature certificate (DSC)
To use the new electronic filing system under MCA 21, the applicant must obtain a Class-II Digital Signature Certificate. The digital signature certificate can be obtained from the agencies authorized by MCA 21. Company directors must submit the prescribed application form along with proof of identity and address.
Step 3: Reserve the company name online with the Registrar of Companies (ROC)
The applicant can check the availability of the desired company name on the MCA 21 web site.
A maximum of 6 suggested names may be submitted. Once approved, the selected name appears on the website. In practice, it takes 2 days for obtaining a clearance of the name if the proposed name is available and conforms to the naming standards established by the Company Act.
Step 4: Stamping of the company documents
The Memorandum of Association and Articles of Association are the most important documents to be submitted to the ROC for the purpose of incorporation of a company. The Memorandum of Association is a document that sets out the constitution of the company. The Articles of Association contain the rules and regulations of the company for the management of its internal affairs. The request for stamping the incorporation documents should be accompanied by unsigned copies of the Memorandum and Articles of Association, and the payment receipt.
The company must ensure that the copies submitted to the Superintendent of Stamps or to the authorized bank for stamping are unsigned and that no promoter or subscriber has written anything on it by hand. The Superintendent returns the copies, one of which is duly stamped, signed, and embossed, showing payment of the requisite stamp duty. The rate of stamp duty varies from state to state.
Once the memorandum and articles of association have been stamped, they must be signed and dated by the company promoters, including the company name and the description of its activities and purpose, father-”s name, address, occupation, and the number of shares subscribed. This information must be in the applicant’s handwriting and duly witnessed.
Step 5: Obtaining the Certificate of Incorporation from the ROC
The following forms are required to be electronically filed on the website of the Ministry of Company Affairs: e-form 1; e-form 18; and e-form 32.
Along with these documents, scanned copies of the consent of the initial directors, and also of the signed and stamped form of the Memorandum and Articles of Association, must be attached to Form 1.
One copy of the Memorandum of Association, Articles of Association, Form 1, Form 32, Form 18 and the original name approval letter, consent of directors and stamped power of attorney must be physically submitted to the Registrar of Companies. The certificate of incorporation is sent automatically to the registered office of the company by registered or rush mail.
The registration fees paid to the Registrar are scaled according to the company’s authorized capital (as stated in its memorandum). A private company can commence business on receipt of its certificate of incorporation.
Step 6: Obtaining the certificate of commencement of Business
A public company has the option of inviting the public for subscription to its share capital. Accordingly, the company has to issue a prospectus, which provides information about the company to potential investors. The Companies Act specifies the information to be contained in the prospectus. The prospectus has to be filed with the ROC before it can be issued to the public. In case the company decides not to approach the public for the necessary capital and obtains it privately, it can file a “Statement in Lieu of Prospectus” with the ROC.
On fulfillment of these requirements, the ROC issues a Certificate of Commencement of Business to the public company. The company can commence business immediately after it receives this certificate.
Though not related to company formation, there are other registrations that need to be considered by a company that is going the registered way. These include registering for Permanent Account Number (PAN), Tax Deduction Account Number (TAN), Office of Inspector, Shops, and Establishment Act (State/Municipal), Value-Added Tax (VAT), Employees’ Provident Fund Organization, Employees’ State Insurance Corporation, Profession Tax among others.
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