Registration of a Company

 

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.

Source: http://www.mca.gov.in/

———————————————————————————————————————————————————

This article is brought to you by onlineITreturn.com

For a detailed advise, you can contact info@onlineitreturn.com or visit www.onlineitreturn.com. OnlineITreturn.comis an online portal for efiling your income tax return and advise, consultancy on taxation matters including Service Tax, TDS. All taxation matters are handled by Chartered Accountants.

Registration options for Non Profit Organizations

Do you have a wonderful idea to start a Not for profit organization? Or alternatively do you have a Not for profit organization that you are currently running? Have you thought of registering the same?

Why Register an NGO?

  • Registration adds to your credibility as an organization
  • Registration formalises a corporate identity. It gives the NGO a legal personality providing ownership clarity
  • It gives you the right to sue and be sued as an NGO
  • A registered NGO can open a bank account in the name of the organization, or sign contracts in the name of the organization
  • A registered NGO can also qualify for financial assistance from government agencies and local, national and international donors

Corporate Registration options

Once you have decided to register an NGO the question arises which registration option you use. A ‘Not for profit’ organization has three main registration options as below:

  1. Register as a Public Charitable Trust
  2. Register as a Society under the Societies Registration Act of 1860
  3. Register as a section 25 company. This is governed by the companies Act of 1956

Each of these options has its own registration formalities, taxation aspects and other pros and cons. Briefly they compare as below:

Comparison between a trust, a society and a section 25 company

 

Public Trust

Society

Section 25 Company

Statute/Legislation Public Trust Act like Bombay Public Trust Act, 1950 Societies Registration Act of 1860 Companies Act of 1956
Jurisdiction of the Act Concerned state where registered Concerned state where registered Concerned state where registered
Authority Charity Commissioner/Deputy Registrar Registrar of Societies Registrar of Companies
Registration As Trust As Society (and by default also as Trust in Maharashtra and Gujarat) As Section 25 Company
Main Document Trust deed Memorandum of Association and Rules & Regulations Memorandum and Articles of Association.
Stamp Duty Trust deed to be executed a non-judicial stamp paper of prescribed   value No stamp paper required for Memorandum of Association and Rules &   Regulations No stamp paper required for Memorandum and Articles of Association
Number of persons needed to register Minimum two trustees; no upper limit Minimum seven, no upper limit Minimum three, no upper limit
Board of Management Trustees Governing body or council/managing or executive committee Board of Directors/Managing Committee
Mode of succession on board of management Usually by appointment Usually election by members of the general body Usually election by members of the general body

Source (for comparison table): http://en.wikipedia.org/wiki/Indian_NGOs

Other Registrations

Besides registration as a corporate body (society / Trust / Section 25 Company) there are other registrations you would have to consider for your NGO

  • Registration under the Income Tax Act to enable donors to claim exemption u/s 80G for the donations made to the NGO
  • If the organization receives foreign contribution, then it needs to be registered under the FCRA Act. This comes under the jurisdiction of the Home Ministry.

If you are still confused and need more guidance on registration of your NGO you can contact our expert team of advisers at onlineITreturn.com. One of our Chartered Accountants will assist you with registration and other taxation aspects of NGO’s in India.

———————————————————————————————————————————————————

This article is brought to you by onlineITreturn.com

For a detailed advise, you can contact info@onlineitreturn.com or visit www.onlineitreturn.com. OnlineITreturn.comis an online portal for efiling your income tax return and advise, consultancy on taxation matters including Service Tax, TDS. All taxation matters are handled by Chartered Accountants.