Starting a business can be an overwhelming experience for those who are new to the business fraternity. Everything needs to be on point, from competitive analysis to prevailing legalities while underpinning the foundation of a new business. This article deals with the legalities aspect and lets you know how to incorporate a company in India as per the Companies Act, 2013.
Note: The following incorporation process applies to the business structures like OPC, private limited company and public limited company only. If you seek to operate as an LLP or partnership firm then consider our separate write-ups.
Partnership firm registration seeks the drafting of a partnership deed that encloses some mandatory clauses. It is essential to avail of professional services for drafting purposes. Once drafted, the partnership deed seeks the approval of the RoF of the respective state. In the case of LLP incorporation, the applicants must file a prescribed form called FiLLiP.
Steps to Incorporate a Company in India
Following is the detailed process to incorporate a company in India. Make sure to apply to follow this process without skipping any of the steps.
Step 1: Find a viable business structure
Selecting the apt legal structure for your business commences with identifying your company’s goals and considering state and central laws. By defining your goals, you can opt for a legal structure that offers the best fit for your requirement. As your business evolves, you can change your business structure to fulfil your needs.
Typical parameters that need to be worked out while opting for a suitable business structure
- Management structure
- Scope of operation
- Level of compliances
- Ease of third-party funding for further expansion
Following are the business structures available under the Company Act, 2013
OPC (One Person Company) (Suitable for businesses with smaller management hierarchy and one director who act as an owner)
Private limited company (Preferably one the most popular business structures in India)
Public limited company (preferred by large organizations)
Step 2: Complete the paperwork formalities
Once you have selected a suitable business structure, it’s time to arrange the mandatory paperwork. Following are the standard documents that are required to be uploaded on MCA’s portal during the incorporation process.
- Memorandum of Association i.e. MOA;
- The Articles of Association, i.e. AOA;
- Declaration by the directors as well as by the subscribers;
- A confirmation about the office address;
- Utility bills;
- A resolution issued by the global company (if necessary);
- Certificate of incorporation of the outer nation body corporate (If applicable);
- The interest of the directors from other organizations (if required);
- A recommendation conferred by the promotional company (if required);
- Nominee’s assent;
- Residential & identification proof of the applicants
- Identity proof as well as residential address of the nominees as well as subscribers;
- The declaration or resolution passed by the non-incorporated entities;
- Any other document [If required]
For AGILE-PRO:
- Proof regarding the principal place of business;
- Evidence regarding the Authorized Signatory’s appointment for GSTIN;
- Copy of Resolution or Authorization letter passed by the BODs;
- Managing Committee & Acceptance Letter
- Specimen Signature of Authorized Signatory for EPFO
- Proof pertaining to Authorized Signatory’s identity for the opening of a bank account
Declaration of directors and subscribers
The declaration in the form, viz INC-9 of the directors and subscribers, should be provided with the authority via digital mode. The applicant has to submit the recommendation affixed with a certificate approved by CA CS & Cost Accountant.
Step 3: Secure Digital Signature Certificate, i.e. DSC
Digital Signature Certificates are the digital equivalent of paper or physical certificates. For examples of physical documents is DL, passports, or membership cards. Documents serve as identification proof of an individual for a certain purpose; for instance, a DL specifies someone who can legally drive in a specific nation.
Similarly, a DSC can be presented digitally to prove one’s identity, access services or data on the internet, or e-sign specific documentation. One can secure DSC from MCA’s recommended agencies against requested paperwork and fees.
Step 4: Register proposed business name via Part A form of Spice+
The company incorporation process is initiated by filing the Spice+ form available on MCA’s website. It is a web-based integrated form that has been introduced by GOI in view of the initiative “ease of doing business” in Feb 2020.
This form entails two parts, i.e. Part A and Part B. Part A offers the service relating to name reservation which allows the applicant to register their proposed business name in a prompt duration.
Part B, on the other hand, facilitates the services relating to;
- Allotment of DIN
- Allotment of PAN and TAN
- Allotment of EPFO registration and ESIC registration
- Allotment of Profession Tax registration (Maharashtra)
- Particulars of Opening the Bank Account for the Company
- Allotment of GSTIN
Step 5: File SPICE+ Part B for Incorporate a company
Next, down the Spice+ Part B form for filling the given forms:
• AGILE-PRO,
• SPICe+AoA,
• SPICe+MoA,
• INC-9 and URC-1) and for affixing the “DSC,”
After filing the requested particulars along with the documents, the subsequent step is to submit the SPICE+Part B on the MCA portal[1]. After submitting Part B, other forms (AGILE-PRO, SPICe+ MOA, & SPICe+ AOA) will also become available.
Besides, INC-9 shall be auto-prompted based on the particulars inserted in Part B of Spice +. After submitting these forms, the same can be downloaded, and DSC can be affixed accordingly. Finally, the said forms can be submitted in the order shown below.
- SPICe+ Part B ,
- SPICe+ MOA,
- SPICe+ AOA,
- AGILE-PRO, INC-9.
Step 6: Conduct Pre-Scrutiny Check
After uploading the said forms, use the option called ‘Pre-scrutiny’ check located at the bottom of the form. After this, the applicant must tap on the Confirmation tab for the successful submission of the e-form. After this, a Service Request Number, i.e. SRN, shall be generated by the portal for submitting fee for incorporation.
Step 7: Â Verification of documents and issuance of registration by Registrar
In this step, MCA shall conduct the verification of the documents for flaws identification. The Registrar shall grant the COI, i.e. Certificate of Identification, in case of successful incorporation.
Checklist of uploading/submitting SPICe+ form to incorporate a company
- The version of PDF should not be dated
- Form must enclose the signature of Directors
- Digital signatures are verified
- Keep the Disqualified Directors out of the equation
- Upload the requested documents in the prescribed file format and size
- Attachments should be free from legibility issues
- Signature should not be in copy-paste format
Conclusion
Hopefully, now you have learned how to incorporate a company in India, but do not forget to get familiar with post-incorporation compliances or else you may confront severe penalties. The Companies Act, 2013 has laid down various post-incorporation compliances for different companies that functions under its ambit. If you seek end-to-end assistance regarding the same, then let Corpbiz professionals help you out.
Read our article:Types of Shares / Securities for Private Limited Companies
