Company Formation in India

• Ministry of Corporate Affairs
• Companies Act, 2013
• Companies Incorporation Rules, 2014

A company will need a minimum of 2 shareholders and 2 directors to do pvt.ltd company registration in India.

• Limited liability protection to shareholders
• Giving small & medium sized businesses the ability to raise equity funds

Private limited company incorporated under the Company’s Act enjoys the status of a separate legal entity. Thus, a company is legally in a position to open a bank account, hire the employees, raise equity funds, obtain licenses etc as an independent corporate entity. The members (shareholders/directors) of a company hold no personal liability against the company’s creditors for company’s debts.

If you are a private limited company, you can raise equity funds to raise capital for your company. A company can also issue:

• Equity shares
• Preference shares
• Debentures

It can also accept deposits with the permission of RBI. Moreover, being a private limited company makes it easy for you to borrow funds from banks and financial institutions as they prefer to fund a company rather than a partnership firm or a proprietary concern.

Via transfer of shares a company can easily transfer the ownership of a business. A company only needs to sign, file and transfer the share transfer form and the share certificates in case it wants to transfer ownership of a company. In case of a private limited company, the company might require the consent of other shareholders to transfer the shares.

• PAN Card

The proposed directors of the company, who are Indian nationals, are required to submit their PAN card copies for the company’s registration. They are required to submit their PAN cards while the company’s incorporation process is going on.

• Passport

In case the proposed director of a company is a foreign national, the director must submit its passport as a proof of identity for company’s registration. It must be ensured that the passport has been notarized or apostatized in the country the passport has been issued. The document must be translated into English by an official translator in case the document is in the foreign language. Also, the document must be notarized or apostatized. In case the passport does not contain the date of birth of the director, an additional document must be submitted that contains the date of birth of the director. The additional document must be duly certified or attested or notarized or apostilled.

• Address Proof

The address proof of the director must include the name of the director, as mentioned in the passport, and the current address of the director. The document must not be older than 1 year for foreign nationals.
The following documents are acceptable address proof for foreign nationals:

• Driving license
• Residence card
• Bank statement

Government issued form of identity containing address. The document must be translated into English by an official translator in case the document is in the foreign language. Also, the document must be notarized or apostilled.

• Address Proof

A residential proof is required to validate the current address of the director, in addition to the address proof. The residential proof must contain the name of the director and the proof must not be older than one year.
The following can be submitted as a residential proof:

• Bank Statement
• Electricity Bill
• Telephone Bill
• Mobile Bill

The document must be translated into English by an official translator in case the document is in the foreign language. Also, the document must be notarized or apostilled.

• Registered Office Proof

A registered office proof must be provided to certify the company’s registered office address. The following documents must be submitted as the registered office proof during the company registration process or within 30 days of incorporation of the company:

• The authorized registered document of the name of the premises of the company’s registered; or
• The notarized copy of lease/rent agreement that is registered against the name of the company, along with the copy of the receipt of the rent paid, which should not be more than one month old.

• Obtaining DSC & DIN

DIN and DSC can be obtained within 5-7 days. The Digital Signature Certificate (DSC) and the Director Identification Number (DIN) is required to be obtained for the proposed directors of a private limited company.

• Name Approval

The company must submit one proposed name at the minimum and six proposed names at the maximum to the MCA. Approval of the name can be obtained within 5-7 working days, subject to the names’ availability, naming guidelines and MCA processing time.

• Company Registration

A company can submit company registration documents to MCA along with an application for registration. MCA usually takes 5-7 days to approve the application for incorporation in 5 to 7 days.