Main Banner
You are here: HomeNews & Events
How to Incorporate Companies in India
11 May 2015

Introduction:-

Under the Companies Act, 2013 following types of Companies can be incorporated in India:-

(i)                Private company as defined in Section 2 (68);

(ii)              Public company as defined in Section 2 (71);

(iii)            One Person company as defined in Section 2 (62).

Above mentioned companies may be formed either:-

§  Company limited by shares as defined in Section 2(22); or

§  Company limited by guarantee as defined in Section 2(21); or

§  Unlimited Company as defined in Section 2(92).

Steps to be taken for Incorporation of a Company:-

The steps involved in Incorporation of a company are as follows:-

1. Obtain Digital Signature Certificate:-

     As per the Act various E-forms are required to be filed with Digital Signature of Key Managerial Personnel and Directors so it is compulsory to obtain digital signature certificate.

2. Obtain Director identification number:-

As per the Section 153 of the Act, every individual expecting to be appointed as a Director of the Company shall make an application to the Central government for the allotment of Director Identification Number in DIR 3 with such fees as prescribed in Companies (Registration offices and fees) Rules, 2014.

3. Application for the Reservation of Name:-

As per section 4 (4) of the Act, read with the Rule 8 and 9 of Companies (Incorporation) Rules, 2014, application for the reservation of name shall be given in E-form INC-1 along with  fees as prescribed in Companies (Registration offices and fees) Rules, 2014 i.e. Rs 1000/-. 

Further it has to be noted that as per section 4(5) of the Act, when an application of reservation of name is filed with ROC,  he may on the basis of information furnished along with the INC 1, reserve the name for a period of sixty days from the date on which the application was made, under Section 4(4) of the Companies Act 2013.

4. Preparation of Article and Memorandum of Association:-

The Article and Memorandum of Association are the most important documents of the company and is mandatory to be prepared with utmost care.  While drafting the object clause in the Memorandum it must be ensured that the main object of the company should match with the objects mentioned in e form INC-1.

Further it should be noted that the Article of Association needs to be drafted in accordance with the respective forms specified in the tables F, G, H, I and J in schedule I.[Section 5(6) of the Act]. 

Memorandum of Association  needs to be drafted in accordance with the respective forms specified in the tables A, B, C, D and E in schedule I[Section 4(6) of the Act].

5- Application for Incorporation:-

An application should be filed in ROC in e-form INC-7 for the companies other than One Person Company and INC-2 for the One Person Company in the ROC office in whose jurisdiction the registered office of  the Company is proposed to be situated. [Section 7 of C.A. 2013 read with rule 12 of Companies (Incorporation) Rules, 2014].

Various attachments required to be filed with INC-7:-

·      Signed and Verified Memorandum and Article of Association:- Each Subscriber shall sign Memorandum and Article of Association who shall add his name address description and occupation in the presence of one witness who shall attest the signature and shall likewise sign and add his name, address and occupation, if any.

Subscriber

Signatories

Body Corporate

Director, officer or employee of the body corporate duly authorized in this behalf by a resolution of the board of directors of the body corporate.

Limited Liability Partnership

A partner of the Limited Liability Partnership, duly authorized by a resolution approved by all the partners of the Limited Liability Partnership

Note: - (i) If Subscriber to the Memorandum is illiterate, he shall affix his thumb impression or mark.

             (ii) In case of LLP and Body corporate the person so authorized shall not, at the same time, be a subscriber to Memorandum and Article of Association.

·        Declaration by Professional in INC-8:- Declaration can be made by an Advocate, a Chartered Accountant, Cost Accountant or Company Secretary in practice. Rule 14 of Companies (Incorporation) Rule 2014.

·        An affidavit in INC-9 from First Directors and each subscriber: - Affidavit shall be submitted by each of the subscribers to the memorandum and each of the first directors named in the articles.

·         The address for correspondence till registered office is not recognized.

·        Particulars of each subscriber who subscribe to the Memorandum in Form No. INC 10 and promoter or first director shall self-attest his signature and latest photograph.

·        Particulars of First director and Proof of identity consent to become Director of the Company and Interest in other entity and NOC in form  DIR-2

6- Particulars of First Director and their Consent:-

The first directors of company mentioned in the articles and their interest in other body corporate along with their consent to act as director shall be filed in form DIR-12 along with the fees as prescribed in the Companies (Registration offices and fees) Rules,2014.

7- Certificate of Incorporation:-

After all the above mentioned steps have been completed and if ROC is satisfied then certificate of Incorporation is issued by Registrar of companies in form No.INC- 11[Rule 18 of Companies (Incorporation), Rule 2014

8- Declaration at the time of Commencement of Business:-

As per Rule 24 of the Companies (Incorporation) Rules,2014 the declaration shall be filed by the director in form no INC-21 along with such fee as may be prescribed and the particulars of the form verified by the Company Secretary,Chartered Accountant or Cost Accountant in practice

And In case of Companies which are registered with the Sectoral regulatory (RBI, SEBI)then they are required to get approval from that Sectoral regulatory.

9- Registered Office:-

Within 15 days of incorporation a company shall have its registered office and its verification shall be filed in form INC-22 along with the fee. [Rule 25 of the Companies (Incorporation) Rules, 2014]

  One Person Company (O.P.C.):-

Ø  OPC can be incorporated by a person who is an Indian citizen and resident of India.

Ø  No person can incorporate or be a nominee in more than one O.P.C.

Ø  Companies under section 8 cannot be incorporated or converted into OPC.

Ø  Minor can neither incorporate nor be a nominee of the O.P.C.

As we discussed earlier that for Incorporation of O.P.C form INC-2 required to be filed with ROC and the subscriber of that OPC can nominate a person after obtaining consent to become nominee by such person in form No- INC-3.

Note: -Such Nominee must be an Indian citizen and resident of India.

Penalty:- Earlier provision regarding the penalty under Rule 5 of companies (Incorporation),Rules 2014 has been omitted and new Rule 7A of Companies (Incorporation) Amendment Rules 2015 has been introduced. And as per rule 7A if a OPC or any other officer of such company contravenes any provisions of Rule 3 and Rule 4 than the OPC or any of its officer shall be punishable with fine which may extent to rupees five thousands and further fine which may extend to rupees five hundred for each day after first offence during which such contravention continues.

Integrated Process for Incorporation (e-form INC -29):-

§      The Rule 36 of the Companies (Incorporation) Amendment, Rules 2015 states that integrated process for filing of forms for incorporation of companies, which is effective from 1’st May, 2015 as per the notification given by MCA. This is an option in addition of the regular procedure of Formation of any company. The benefit of using Integrated Form 29 to incorporate a company is that if all the submitted documents are correct a company can be incorporated in SINGLE ONE DAY i.e. in 24 hours. This is in line with the Prime Minster’s promise of “ Doing Business with ease” mission.  

§      For Public, Private, Producer and one Person Company Integrated form no.INC-29 shall be used for filing of the application for allotment of Directors Identification number (in case of proposed director not having approved DIN), reservation of name, incorporation of companies and appointment of directors of the proposed company. It shall be filed with ROC within whose jurisdiction the registered office of the company is proposed to be situated, along with the fees of Rupees 2000 in addition to the registration fees as prescribed in Companies (Registration of Offices and Fees) Rules, 2014. Particulars of maximum of three directors shall be allowed to be filed.

§      Only one name shall be proposed by promoter or applicant of the proposed company in e-form INC-29.

§      The Memorandum and Article of association may be prepared by the applicant or promoter as per the templates given in Form INC-30 and INC-31 respectively,keeping in view the provisions of the rule 13 for its preparation. The scanned MOA and AOA with the sign and witness of promoter or applicant shall be attached in e-form INC-29.

§     Integrated process for incorporation of companies in Form INC-29 is available as an option to process for separate application for DIN, name reservation and incorporation of companies.

§     The provision of section 4(5) sub-clauses (i) of the Act and rule 9 of these rules shall not apply for an application filed using the integrated process of incorporation.

§      A company may furnish verification of its registered office by filing INC-29 as per provisions of section 12(2) and shall attach any documents referred in rule 25 sub-rule 2 of the Companies (Incorporation) Rules, 2014.

§    INC-28 is not required to be filed if proposed company maintains its registered office at the given correspondence address.

§  On examining e-form INC-29, if Registrar finds that the application is incomplete or defective then two more opportunities of 15 days respond time from each intimation is given by the registrar to the applicant for removal of such defects. If registrar is of the opinions that despite two opportunities there are still deficiencies or defect then the form is liable to be rejected.

§   When the Form 29 is correct in all respects the certificate of incorporation is issued in Form No.INC-11 by the Registrar of Companies. 

 

For any clarification or guidance please contact Mr. Hemant Paliwal at: hemant@hpacs.com

We recommend that clients would prefer integrated process of incorporation of company through Form INC 29 to incorporate company in ONE DAY time.

HPACS Team

Mr. Rishi Vashisht  & Kumar Vineet