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Incorporation of a Private Limited Company

Private Company is the most common form of Company in India. The Ministry of Corporate Affairs (MCA) manages the incorporation of a Company. Companies in India are incorporated and regulated under Companies Act, 2013 and Company Incorporation Rules, 2014.

Pre-Incorporation requirements:

  1. Minimum 2 directors and 2 shareholders are required for incorporation of a Private Company;

  2. Atleast 1 director shall be a resident director. That is every company need to have atleast 1 director who has stayed in India for a total period of not less than 182 days in the previous calendar year;

  3. Shareholders can be a corporate entity or a natural person, however only a natural person can act as a director;

  4. All the directors of a Company need to have a valid Director Identification Number (DIN).

Process for Incorporation of a Company:

 MCA has simplified the process of Company incorporation by introducing SPICe32 which allows a Company to be incorporated in a short span of as much as 2 days if all the required details are in place.

 Promoters need to make application for name of the proposed company through online service of Reserve Unique Name (RUN) provided by MCA. Through RUN the promoters can propose upto 3 names.

 Alternatively, promoters can also apply for name in Form SPICe 32 itself, only drawback here is that only 1 name can be proposed, therefore only if the promoters are sure of the availability of the name then they should opt for this option.

 Atleast one director of the Company is required to have a Digital Signature (DSC) required for filing of eForm online on the MCA portal.

Following applications can be made in Form SPICe-32:

  1. Application for DIN of upto 3 directors;

  2. Application for PAN and TAN of the proposed company; and

  3. Application for registered office of the company.

 For ease of doing business MCA has also introduced eForm AGILE which need to be filed along with SPICe32. AGILE allows the promoter to apply for the following at the time of incorporation itself: 

  1. Goods and Service Tax Identification Number (GSTIN); 

  2. Employees’ State Insurance Corporation (ESIC) Registration; and 

  3. Employee’s’ Provident Fund Organisation (EPFO) registration. 

 Therefore for incoporation of a company the promoters need to file eForm SPICe 32 certified by a Practicing Company Secretary or Practicing Chartered Accountant or Practicing Cost Accountant or an Advocate along with the required details and attachment on the MCA portal.

 If all the required details are in place then ROC after reviewing the same shall issue a Certificate of Incorporation which shall include PAN, CIN and other details of the incorporated company.

Post-Incorporation Requirements:

  1. Companies Bank Account need to be opened;

  2. Transfer of share subscription amount from subscribers’’ bank account to company’s bank account;

  3. Obtain certificate of commencement of business by filing eForm 20A within 180 days from the date of incorporation;

  4. Payment of stamp duty and issue of share certificates to the subscribers within 2 months of receipt of subscription amount;

  5. Appointment of Statutory Auditor;  

  6. Income Tax Filing; and

  7. Annual Filings; 

Documents required for incorporation of a Private Limited Company:

  1. e-MOA in Form INC 33;

  2. e-AOA in Form INC 34;

  3. Form DIR-2: Consent to act as a director of the Company;

  4. Form INC-9: Affidavit to be given by subscribers and directors of the proposed company;

  5. Declaration from first directors;

  6. Proof of Office address (Conveyance/ Lease deed/ Rent Agreement etc. along with rent receipts);

  7. Copy of Utility Bill (not older than 2 months);

  8. Identity and address proof of all the subscribers of the proposed company; and

  9. Identity and address proof of all the directors for whom DIN application has been made through e-Form SPICe 32. 

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