Understanding of the relevant documents required for incorporation of company in India is an important thing to keep in mind in order to have a successful incorporation process. It is a form-filler application that gives information about the registrant and thus it is a connector between the entrepreneur’s ideas of coming up with a usable company and the legally compliant mechanism that accomplishes it all. There are many documents and their requirements that are needed for the different types of company registration, but along with that, the minimum requirement information will be there for each of them.
Therefore, since you cannot possibly register a company without understanding which befitting category the company is, you will have to look deeper into the subject. Know all types of Companies registered in India and their minimum requirement, which is one of the ways to have a more precise picture of the documents required for company registration in India.
Company & Its Types
For a firm to be profitable in India, it is mandatory to attain a satisfactory business structure. The new Companies Act of 2013 allows the acquirers to choose from the different company formats in order to meet their needs, demands, and objectives. The companies are grouped based on their registration fees, their reasons for establishment, and overall ownership rights of the companies. Additionally, you may want to read about all these types of companies below for you to weigh the best options in the company to run.
1. Categorisation of Companies based on Registration
As per the registration, the bodies can be divided into Private Limited, Public Limited, and One Person Companies. Every category has its own specific things that have to be met and also the procedures of registration. Let’s find out in which aspects they are not the same.
- Public Limited Company- A company of this nature is one that was established in keeping with the Companies’ Act, 2013 under 7 shareholders and 3 directors, at least. In this company, there are no restrictions on the amount of money the owner should have deposited/held, i.e., there is neither a set minimum nor a set maximum. A public limited company is generally a more attractive option for big business entities due to the higher number of shareholders / investors who can participate in the company. The Public Limited Company registration process is online based and is a really simple one where all the documents required for company registration in India have to be submitted by you as an applicant to the ROC. These documents will be discussed in the upcoming sections too.
- Private Limited Company- It is a company registered under the Companies Act, 2013 by virtue of which the company may be formed with 2 or more persons of which the number of months or years become irrelevant. No limit is put on the capital of companies that are private by nature. Nevertheless, it is restricted to two hundred. In contrast, Private Limited Companies may own comparatively less capital but the maximum limit is still way above the grant size limit. Due to this, the most favored form among medium and large businesses is a Private Limited Company. The registration process is the same as of a Public Limited Company where an applicant files an application to the ROC online with the attached pvt ltd company registration documents which are discussed in the further sections of this article.
- One Person Company–Under a One Person Company(OPC), a company is owned by a single individual and is operated under the Companies Act of 2013. They are to be registered as a Private Limited Company by an ROC, but the only criterion required to set them up is different. There is a dissimilarity between a Private Limited Company and an OPC as the first one has not more than a single shareholder. This only shareholder being a natural person of India is the only condition while the second shareholder is only admitted to the companies as either a corporation for profit in India or abroad. As well, the minimum number of directors required to set up an OPC is 1. Small businesses are the ones that commonly go for OPC mainly because it doesn’t need a huge investment.
2. Categorisation of Companies based on Purpose
The classification of companies into for-profit and not for profit organizations can be done by taking into account the purpose of the establishment. For-profit entities are primarily concerned with the production and acquisition of money, whereas non-profit ones are mainly concerned with the distribution of commerce, art, science, sports, education, research, social welfare, religion, charity, and environment conservation. Non-profit companies are those whose operations and incomes are all lured to these operations only. Whatsmore, shareholders of a Non-profit Company have no right to profit or take one among them. Here's a closer look at the two types of companies:
Profit-Making Companies - These establishments are banded with the purpose of money and wealth manufacturing. Depending on your investment potentials and the volume of your work, there are some possible ways to set up a for-profit company. These are Private Limited Companies, Public Limited Companies, One Person Companies, Small Companies and others. These profit-making companies can be established through the Companies Act as well (all the provisions are stated).
Section 8 Companies - The relevant section of the act, i.e. Section 8 of the Companies Act, 2013, pre defines the provisions relating to the formation of non-profit companies for the promotion of commerce, art, science, sports, education, research, social welfare, religion, charity, and environment conservation. For these companies to be established, a prior license must be obtained from the Central Government.
Additionally, the forms of companies you can choose from in setting up such entities are the only two Public Limited and Private Limited Companies. Dividends are not distributed by Section 8 Companies. Moreover, the companies shall only be allowed to operate when the Central Government is satisfied. This implies that the Government is authorized to issue or withdraw the license of these companies on reasonable grounds as and when it wishes.
3. Categorisation of Companies based on Ownership
Another vital dimension of categorizing companies is the way of ownership transfer. In relation to this parameter, companies may either be identified as Private Companies or Public Companies. So let us know the difference between the two.
Private Company: Companies of this variety have confinements on share transfer. A Private Company is not able to perform the shares publicly, however, a Private Company cannot sell shares on the market. And public access is not only impossible for the shares of Private Company to purchase for the general public. Moreover, in the case of the existing shareholder leaving or his shares are to be transferred to other existing shareholders before a new investor comes on the scene, the departing party needs to do the same.
Public Company: Contrary to Private Company, Public Company can trade its 7 Shaand sell its shares to the public via the stock exchange. More than that even, members of the general public are authorized to buy the shares. Because the firm can collect more public funds as investments, it is attractively compliant and regulated according to the law.
Minimum Requirements to Start a Company in India
All these companies are born by the Companies Act, 2013, and therefore have different mandatory requirements for their incorporation. The table given below enumerates their details. The major constituent of them is the minimum number of shareholders required, the minimum number of directors and the minimum capital necessary to install these types of companies. Consequently, some certain documents required for incorporation of company in India also, and those are discussed further on in the text.
For Private Limited Company
- Minimum 2 Shareholders
- Minimum 2 Directors
- A Unique ROC-approved Name ‘
- A Registered Office Address
- No Minimum Capital Prescribed
For Public Limited Company
- Minimum 7 Shareholders
- Minimum 3 Directors
- A Unique ROC-approved Name
- A Registered Office
- No Minimum Capital Prescribed
For One Person Company
- One shareholder who is an Indian Citizen
- Minimum 1 Director
- A Unique ROC-approved Name
- A Registered Office
- No Minimum Capital Prescribed
For Section 8 Company
- Private / Public Limited Company Registration
- Section 8 Licence from Central Government
- Object of the Company must be in accordance with Section 8 of the Companies Act
- No Dividend Distribution among shareholders
List of Documents Required for Company Registration in India
Another crucial requirement for establishing a company in India are the documents of incorporation. These are the very documents which are indispensable for a company to be registered by the ROC since the very application would be considered incomplete if they are not attached. All the necessary documents required for incorporation of company in India are listed and explained by us below. Be sure to create and finalize these documents before you go to the ROC to get your Company Registration.
Documents of the Company’s Promoters
The first bundle of pvt ltd company registration documents in India encloses the KYC documents of the promoters. The Promoters are the first shareholders or directors in a company who are involved in its establishment and manifest some interest in the company’s business. Each of these promoters will have to provide the scanned, self-attested copy of the following documents:
- PAN Card
- Aadhar Card
- ID Proof – Indian Promoters can submit any of among their Driving Licence, Voter ID, and passport. For foreign. Promoters, passport is mandatory
- Address Proof – Promoters can submit any utility bill or bank statement in their name with their address written on it. The address proof must not be older than 2 months. (fixed obsolete and incomplete sentence)
- Digital Signature – Class 3 Digital Signature of the authorized director to Sign the application for Company Registration.
Documents of the Registered Office
The second set of documents required for private limited company in India include the documents of the Registered Office. The registered office is the official address used when a company is established and incorporated. By this address, the company is known globally on the public records to be its correspondence or communication address. While the incorporation of the company, the following documents required for private limited company related to the Registered Office must be submitted:
Proof of Registered Office Address – Any Utility Bill in the Company’s Name with the registered office address can be submitted for this purpose. The Address Proof must not be older than 2 months.
No Objection Certificate – A No Objection Certificate has to be issued by the owner of the office property in the prescribed downloadable format.
Documents of Company’s Constitution
To begin with, it is essential that the key legal pvt ltd company registration documents like the Memorandum of Association and the (or Articles of Association) be properly filled out, as these records will be central to the company setup in India. One of our legal experts (check grammar) accompanied by some paralegals (are helping many corporations to get the documents prepared like this. (What is the purpose of the documents? Are they establishing the legal identity of the company? Please discuss more in the context.)) (refers to the documents) They carve out the legal identity of the company; they also help down the transaction lawful treatments in a paper of the right value. To add to this, in addition to signing, they must also be initiated by the other witnesses and a public notary. The notary is required to turn the documents into official ones.
Now, that's a company’s constitution directory: As per the MOA, Memorandum of Association, the charter, formed by a company, which contains the fundamental legal details is known as Memorandum of Association. It is split into a few sections that pinpoint the respective issues of a single document. A Private Limited Company and a Public Limited Company are two types of companies that have 6 clauses written in their Memorandum, however, a One Person Company has 7 clauses in their Memorandum. We have mentioned down all the list of clauses below to give you a clear idea.
- Name Clause: This section includes the name of the company that gets approved and finalised.
- Registered Office Clause: It includes the information about the business’s address in the state of the registered address of the company.
- Object Clause: It is the part of the MOA that indicates the primary business of the company. For a section 8 company, the object must be in accordance with Section 8 of the Companies Act.
- Liability Clause: This clause is a significant representation of a MOA which involves the liability of each of its members.
- Capital Clause: This section provides the details of the Company's Authorised and Subscribed Capital.
- Nominee Clause: The only case that this title applies is the One Person Company. It will talk about the details of the Shareholder’s Nominee who is the person that would take the responsibility instead of him if he is dead or gone abroad.
Articles of Association – The Articles are the Company’s Rules and Regulations of the Company’s internal management. These rules are particularly produced by companies and are done by the top managers. Some of the major rules are about the policies ruling the way of admitting a new shareholder, which are based on a good valid reason for a person to not be kicked out/ deleted form the company’s list, the way to share transfer, and to share transmission, require-ability factor on bond transaction, a procedure to wind up the company and so on.
Forms & Declarations
Forms & Declarations Apart from the above documents, certain forms and declarations also need to be provided during Company Incorporation. A list of these forms and documents required for company registration is mentioned below:
INC 9 - INC 9 is a declaration which is provided to the shareholders and first directors of the company. This declaration assures that they have not received any penalization under any of the provisions of law, any penalty or fine under the company law and where the documents and other information are consistent with the application form for registration of the company. Such a statement or information should be true to the best of their knowledge.
INC 14 - INC 14 is a declaration made by a practising professional, like a lawyer who may be an advocate, chartered accountant, cost accountant or company secretary, certifying that all the provisions, rules and regulations of the Companies Act and Company (Incorporation) Rules are fulfilled while drafting of the MOA and AOA for the company. The application for incorporation is also accompanied by the submission of this certificate.
DIR 2 - DIR 2 is the form which is being consented to by the individuals the company is to appoint as the directors. The form must be delivered along with the Company Registration application to announce to the ROC the fact that the consent of the directors has been received prior to the final establishment of the company.
How to Start a Company in India?- Complete Process of Company Registration
To start a company, the process is carried out by collecting, preparing as well as drafting of the documents required for incorporation of company in India. However, the process will be continuing once the company registration documents are prepared, one can proceed further with the application process by navigating through the following steps:
Step 1: Visit the MCA Website and Login
The company registration process is online and you can get it done on the Ministry of Corporate Website. To do that, you have to register and make an account on the MCA portal. As you register, you will be given your login credentials. You can use these credentials to log in to the website.
Step 2: Online Application Accessibility
After you are logged in, you can fetch and fill up the online SPICE Plus application for Company Registration, also known as INC-32. This form is web based and it is to register all companies.
Step 3: Fill Out the Details & Upload the Documents
In a SPICE Plus form, the first part is split into two parts – part A and B. We advise you to file these parts separately. The first part is just a list of names given by the company to ROC for approval. Once the name is approved, you can proceed to the second part which contains the form for registration. While Part A does not require any documents required for private limited company to be submitted with it, but only the proposed names, Part B requires all the documents discussed in the above section to be uploaded in their digital formats.
Step 4: Pay the Application Fees
The application fees for Part A of the form is set at Rs.1,000. However, with the application fees for Part B of the form, the amount of the authorised capital of the Company will be the factor on which the fees will depend. If the authorised capital is greater than Rs.15 lakhs, then the fees will be Rs.500, else no fees will be chargeable.
Step 5: Receive Certificate of Incorporation
You can issue the application after paying the application fees. After submission the application form takes around 2 weeks to process. The company will be approved and the company will be successfully registered. The Certificate will contain the date of incorporation and the CIN allotted to the company as well.
Benefits of Company Registration in India
In India, business registration is not just a legal necessity but also a strategic step that gives your business a better future perspective as well as potential to succeed. Different benefits of company registration range from legal identity to the limitation of liability to easier financing. In this respect, these benefits highlight that the company registration of your business structure as a company is a must.
- Legal Identity and Credibility: When your company registers, it acquires its own legal identity. Consequently, the distinction of personal assets from the company’s values is brought, and trust with different stakeholders such as customers, clients, and investors is greatly enhanced. A registered company is an epitome of professionalism and takes its accountability seriously and is how it wins the customer's trust in the competitive world of today.
- Limited Liability Protection: One of the main benefits of company registration is a feature called limited liability. Thus, each shareholder and director is not responsible for the company's debts if the company gets into legal trouble. In this way, it is the arrangement of the company that shields shareholders from the company's debts and obligations, which in turn gives them an assurance beyond measure.
- Access to Capital: Companies for which it is a must to register under the Companies Act 2013, have a variety of ways to raise funds- they can, for example, apply for loans from banks or look for venture capital, or angel investment. The regulation and compliance regime is attractive to investors who are looking for stability and transparency thus creating avenues for growth and expansion.
- Perpetual Succession: The registration of a company entitles it to perpetual succession, meaning that its existence is not contingent upon the lives of its founders or members. Despite any changes in shareholders or addition of new members, the business undergoes a smooth transitional period and stability and longevity are ensured.
- Ease of Transferability: The shareholding structure of a registered company is such that shares are transferable, which makes ownership changes easier. Apart from the founders’ exit plans, this capability also serves as a magnet for new potential investors and consequently helps the company to be more appetitive for cooperation.
- Tax Benefits and Incentives: Registered corporations are entitled to various tax benefits and incentives provided by the government to boost economic growth. Consequently, the list includes tax-deductible items, exemptions, and a variety of other financial advantages, leading to higher (increased) profitability.
Conclusion
The role of the pvt ltd company registration documents can not be overstated. You can easily accomplish your company registration process; It can be just as your own company law attorney for the place. Most of the clients have such needs and seeking expert assistance is very helpful in this case! One of the requirements to register a private limited company in India is careful documentation and compliance with legal requirements. During a Private Limited Company Registration in India, choosing and understanding the documents required for company registration is relatively easier. The registration of a pvt ltd company should be done in time to avoid business slowdown and to get into entrepreneurship easily.
Also Read: How To Make Pvt Ltd Company Registration In India
