1) What are the type of companies that I can be incorporate in India?

• One Person Company (OPC) – It is a form of company with only one member. The process of starting up an OPC is same as that of a general private limited company. It is a hybrid structure that infuses the benefits of a sole proprietorship business with a company form of business.

 Read more: FAQs on One Person Company

• Private Limited Company- A separate legal entity with perpetual succession. A minimum of two persons are required for a company registration. Interestingly, no MINIMUM PAID UP CAPITAL is required to start a company.

   Read more: 5 reasons private limited companies are back in fashion

• Public Limited Company- At least three directors. A public limited company can start its operations only after obtaining a Certificate of Commencement from the Registrar in addition to Certificate of Incorporation. 

• Unlimited Liability Company– A major difference of this form of company with other forms is that it does not have a share capital or any shareholders. Incidentally, the company is governed by its members, and the extent of their liability is defined by the Memorandum of Association.
• Non-profit Organizations – In India, popularly called Non-Profit organizations, come in three flavors, namely Trusts, Societies, Section 8 companies.

 Among the above, the most popular types of companies are private limited and public limited companies.

2) What are the advantages I will get if I incorporate a company in India?

• Liability of the Members’ (the directors and shareholders) is limited to the amount of money they have paid for shares, thus Stakeholders are not typically liable for corporate debts and liabilities.
• Extra capital can be raised by selling shares either privately or in the market. Members can leave or join without any restriction.
• The death, bankruptcy or withdrawal of capital by one member does not affect the company’s ability to trade.
• The disposal of the whole or part of the business is easily arranged.
• Enjoys high credibility as the books of accounts and other documents are available for public vigilance.
• ESOPs sweat equity and other incentives can be issued, which help attract and attain best of talents.
• Overall transparency at various levels.

3) I wish to register a company in India. Which type of company will be best suited for me?

The choice of the entity depends on the circumstances of the case.

• Private Limited Company has lesser legal compliances.
• It is relatively less cumbersome to organize and operate a Private Limited Company as it has been exempted from many regulations and restrictions to which public limited company is subjected to.
• There is no requirement of raising finance through public issue in case of Private Limited Company.
• A Private Company can commence its business immediately after its incorporation, whereas a Public Limited Company cannot start its business until a Certificate of commencement of business is issued to it.
• If limited capital is available, scale of operation is relatively low and ownership is intended to be held by limited people, then Private limited company is the best choice.
• A Company enjoys better avenues for borrowings of funds. It can issue debentures, secured as well as unsecured and can accept deposits from the public. Even the banking and Financial Institutions prefer to render large financial assistance to a Private Limited Company.

 Read more: Types of Business Entities in India

4) What is Authorized Capital?

The Authorized Capital of a company is the maximum amount of share capital that the company is authorized by its constitutional documents to issue to shareholders.The Authorized share capital (or nominal share capital) can best be described as the maximum amount of share capital that the company is authorized by its Memorandum & Articles of Association to issue (allocate) to shareholders. Further, a portion of the authorized share capital can (and usually does) remain unissued.

5) What should be the minimum authorized capital of my company?

If you wish to register a private limited company, then the minimum authorized capital will be Rs. 1, 00,000 and in case of a public company it will be Rs.5, 00,000.

6) What is Paid-Up Capital?

Paid-Up Capital is the amount of money that has been received by shareholders who have completely paid for their purchased shares. This would not include any shares that have been bid on, but not yet purchased.

7) Which city is best for registering company in India?

It will depend upon the nature of business you intend to pursue. However, after registering over hundreds of companies, it is our practical advice to keep note of few of many factors before registering your company in any city:

• The local registrations that will be required to be obtained for the company after its registration.
• Nature of your business and the demographic advantage that the city is expected to provide.

Read more: Confused About Where To Setup The Registered Office For Your Start-Up?

8) Is it possible for two foreign nationals to register a company in India?

Yes, an Indian company can be incorporated with one or more foreign nationals as Directors. However, in private company wherein there are 2 directors and both of them are foreign nationals, one of them has to be a resident in India for a period of at least 182 days in the calendar year(as per Companies Act 2013). Also, wherein both the directors are foreign nationals, then disclosure has to be made whether 100 % FDI is allowed in the desired sector or not.

Read more: Complete guide on starting a company in India by Foreign Nationals

9) Can I, as an individual register a company solely on individual basis?

Yes, as per Companies Act, 2013, you can register a company solely on individual basis. The new Act provides for the concept of One Person Company, wherein an individual can start a company on individual basis. 

Read more: One Person Company concept in India comes to Reality

10) What are the Government fees for registering my Authorized Capital for company registration?

The Government Fees for registering a company is in accordance to the specified slab.

11) How to know if the desired name for the proposed company is available or not?

Before fixing on any name, one should always avail the public search of existing company/LLP name along with trademark search. More unique the name more is the chances of their quick reservation.

12) What is a DIN Number?

DIN Number is a unique identification number allotted to the directors of the company by the Government. For obtaining a DIN number, application is made to the Government in Form DIR- 3 with requisite documents. 

13) I already have a DIN number allotted to me. Do I need to obtain another one for the new company I wish to register?

No, DIN is a one-time formality.

14) I already have a DIN and I wish to update my address in my DIN records.

The name, address, e-mail ID, phone number, residential status, all can be updated by making an application in Form DIR-6, along with requisite documents and declaration. There are no prescribed Government fees for the purpose.

15) Is DIN and PAN connected?

Yes, the basic personal details, namely the name of the applicant, father’s name of the applicant and his/her Date of Birth are verified by the DIN authorities from the PAN database.

16) Does Shareholders have to be directors as well?

There is no such compulsion as to the point that shareholders have to be directors as well. There can be a separate group of individuals acting as directors and a separate group of individuals acting as shareholders. Directors are the hands and brains of a company where as shareholders are the owners of the company.

17) Can an existing company be director and shareholder in another company that is to be incorporated?

An existing company can be a shareholder in another company that is to be incorporated. For this purpose, a clear distinction has to be made as to whether the existing company is acting as a holding company or not. Also, the company will have to nominate a natural person to act as its representative. However, it cannot be a director in the same.

18) Can a director engage himself in a part time job elsewhere than the company in which he is a director?

Yes, he can.

19) What is the minimum qualification to act as a director in a private limited company?

There is no such prescribed qualification.

20) What is DSC?

The abbreviation of DSC is Digital Signature Certificate. DSC is required for at least one director for the purpose of Company Registration of a private company.The importance of Digital Signature Certificate is to ensure security and authenticity of the Forms of the Ministry filed electronically.

21) Can DSC be obtained by an NRI acting as a director?

Yes, DSC can be obtained by NRI acting as a director of a company.

22) Can the directors use their residential address as the registered office of the company?

For registered office address of the proposed company, directors can use their own residential address or their relative’s address or any address for which they can furnish valid documents as proof consisting of a No Objection Certificate from the respective owner.

23) Do we have to invest funds immediately before registering the company?

The subscribed amount of capital has to be deposited within 60 days from the date of incorporation of Company.

24) What is the duration of getting a private limited company registered?

The time limit to get a company registered is fifteen to twenty days provided all the valid documents are provided and uploaded with the department.

25) When can a Bank Account for the company be opened?

A Bank Account for the company can be opened after receipt of the Certificate of Incorporation and generation of PAN Acknowledgement.

26) What is the validity of a name once reserved?

A name once reserved by filing Form INC 1 is valid for a period of sixty (60) days from the date of the letter of correspondence. However, ROC has the power to revoke the granted name at any time, after giving due notice to be heard.

27) Difference between rejection and resubmission.

When a particular Form comes for resubmission, then the same can be submitted again vide the same SRN number. The Ministry gives a chance to rectify the documents and information that are submitted without any Additional Government Fees. However, if the Forms get rejected then fresh fillings have to be made which will require Additional Government Fees.

28) Can a person residing in Kerala incorporate a company in Bangalore?

Yes, a person residing in Kerala can incorporate a company in Bangalore, provided he can furnish satisfactory documents in respect to Registered Office of the company.

29) Can same address be used as registered office address proof for two different companies?

Yes, it can be used but only after obtaining No Objection Certificate from the owner.

30) What is the process to validate the documents for Foreign Nationals?

All the documents provided by foreign nationals, ranging from DIN declaration to subscriber’s sheets of the MOA and AOA either needs to be notarized by  a notary public and subsequently apostilled OR notarized by  a notary public and stamped by the Indian Consul of their respective countries.

31) Mr. X, a director of a said company had used his residential property as registered office address. Will the property be treated as company’s property?

No. The property will remain Mr.X’s.

32) A company has a registered office in Bangalore. However, the directors wish to conduct the business from Kerala. Do they need to change their registered office?

No. There is no such compulsion. A company might have its registered office in one particular state and any number of corporate offices all over the country.

33) Can a subsidiary of a foreign company be incorporated in India?

Yes. However, decision has to be made regarding the percentage of shares held by the holding company (foreign company) and the sector in which it is to be established since 100 % FDI is allowed only in selective sectors as of now.

34) What are the additional requirements in case of subsidiary of a foreign company to be incorporated in India?

Apart from the usual notary and apostillation requirements, two Board Resolutions will have to be filed with the concerned ROC while filing Form INC 1 and Form INC 7, stating the resolutions that are held by the holding company with respect to its intention of forming a subsidiary company and stating the number of shares to be held by it, respectively. The same has to be notarized and apostilled.

35) Shall a separate ID be created for the proposed company?

It is not a mandatory. However, it is always advisable to formulate a separate ID for the company for the purpose of maintaining integrity and future confidentiality.

36) Is rent agreement considered a valid address proof for company registration?

Yes, Rent Agreement is considered as a valid document for company registration. Further, latest utility bill or tax receipt is mandatory.

37) What is Memorandum of Association (MOA)?

MOA is the fundamental incorporation document. It defines the name and address of the registered office of the company. The MOA will highlight the object clause by which the company will run its business.  The activities of the company are bound by MOA and is likely to attract penalties if goes ultra-vires. It will also suggest the Name, the state of Registered Office, the Liability of the shareholders and the Capital by which it is willing to start the business. Hence, this charter is important.

38) What is Articles of Association (AOA)?

AOA is more of an internal document for the company. It defines the matters relating to conducting the business of the company, procedure and limitations of altering the structure of the company.

39) How do I register my MOA and AOA with the Government?

MOA and AOA are registered with the Government at the time of incorporating the company. An application is made through INC 7, in which the MOA and AOA are attached and applied for approval. The requisite stamp-duty is to be paid depending on the state-wise Stamping Rules and authorized capital of the company.

40) What are the forms that are filed to register a company?

• Application form for availability or change of a name Form INC 1
• Application or declaration for incorporation of a company   Form INC 7
• Notice of situation or change of situation of registered office   Form INC 22
• Appointment of Directors and their Particulars                       Form DIR 12

 

41) I wish to register my Company as an educational institute for non-profit organizations. What are the additional requirements for that?

In this case, a license has to be obtained in Form 24A to operate as a non-profit making organization. The said license is to be obtained after name approval of the company and before filing the incorporation forms as stated above.

42) What are the additional requirements if I wish to incorporate a Part-IX Company?

In order to register Part IX Company, applicant is required to file Form INC 1 for name availability. After approval of the same, applicant is required to file E- Form INC 1, INC- 7 and INC- 22.

43) What are the additional requirements if I wish to incorporate a Public Limited Company?

In case of a public limited company, the operations can be started only after obtaining the Certificate of Commencement of Operations, in addition to the Certificate of Incorporation.

44) My company has been inoperative since it was registered. There has been no income and no expenses altogether. Do I still need to file the compliance forms with the department every year?

Yes. Although there have been no operations, the company has to still file the statement of accounts with the department every year. A company which has not filed its annual return for three consecutive years are considered in the strike off list of the department. Although the new Act has brought in the provisions enabling the company to operate as dormant, the said provisions are not yet applicable.

45) I wish to incorporate an IT company with three foreign nationals and two Indian nationals. I want to safeguard my interests in the company with respect to equity. What can I do?

The best option is to formulate and implement a shareholding agreement with vesting and cliff period clause.

46) Is Bank statement a valid address proof for obtaining DIN?

A latest bank statement duly attested by bank manager is considered as a valid address proof.

47) What are the documents required for filing Form INC- 7?

Following are the documents required for filing Form INC 7:

1. Memorandum of Association.
2. Articles of Association.
3. INC 8
4. INC 10
5. Affidavit
6. ID Proof
7. PAN Card.
8. INC 9
9. Residential proof of the Directors

Note: This list is not exclusive. 

48) What is the difference between incorporating a company in India and incorporating abroad?

In India, it does not matter in which city you are incorporating a company. Your company will be registered under the Central Government. There is one law and uniform applicability of its provisions nationwide. Unlike in foreign countries like US, wherein registration process and formalities are guided by state laws.

49) Which address will be used while applying for the tax numbers of the company- the branch office or registered office?

The PAN and TAN numbers are to be applied using the registered office address proof while the address of the office from where the centralized billing is done is to be used for VAT and TIN numbers.

50) I registered my company in Pune. However, in order to shift my operations, I wish to change my registered office to Bangalore. What is the process to do so?

It is a case of change in the jurisdiction of the RoC office. In case, company wants to shift the registered office from one state to another state, it needs to file following forms to give effect to such change. These forms are: 1) Form MGT-14 for filing of special resolution with the RoC. 2) File petition with CLB and intimate ROC in Form 61 3) Form 21 (Notice of the court or the company law board order) 4) Form INC-22 (Notice of situation or change of situation of registered office)

51) My company has been inoperative since it was registered. There has been no income and no expenses altogether. Do I still need to file the compliance forms with the department every year? Also, what are the compliance requirements for a company?

Yes. Although there have been no operations, the company has to still file the statement of accounts with the department every year. A company which has not filed its annual return for three consecutive years are considered in the strike off list of the department. Although the new Act has brought in the provisions enabling the company to operate as dormant, the said provisions are not yet applicable. Click more to read on RoC Filings -E-filing of ROC Forms, Returns and Documents and Non-Compliance with ROC can close your business down.

52) I wish to incorporate an IT company with three foreign nationals and two Indian nationals. I want to safeguard my interests in the company with respect to equity. What can I do?

The best option is to formulate and implement a shareholding agreement with vesting and cliff period clause.

53) Is Bank statement a valid address proof for obtaining DIN?

A latest bank statement duly attested by bank manager is considered as a valid address proof.

54) Which address will be used while applying for the tax numbers of the company- the branch office or registered office?

The PAN and TAN numbers are to be applied using the registered office address proof while the address of the office from where the centralized billing is done is to be used for VAT and TIN numbers.

55) I have already trade-marked the name “Abode” for my company. But Registrar of Companies has rejected the name and asked us to file new names. I want “Abode” as my brand name.What should I do?

Legal name of the entity and trademark registration are two different things. You may avail the registration for your private limited company with a different legal name and subsequently use the trade-mark on the desired name under the incorporated company with the different legal name.

56) What is my liability if I am appointed as a director in the registered company?

A director is the hand and brain of a company. A director bears liability towards the company and third-parties. A director is answerable for breach of warranty and acts for his co-directors.

57) What are the things one should keep in mind while obtaining name for registering a company?

There are a lot of things that one should keep in mind before obtaining name for registering a company. The most important being the choice of a unique name. To explain this, the name should not be too identical to any existing Company Name or a registered trade-mark.

58)Which documents are considered as a valid address proof for registered office of a Company which is an owned property?

• Tax Receipt.
• Electric Bill (duly attested by professional).
• No Objection Certificate from Owner.

59) Which documents are considered as a valid address proof for registered office of a Company which is a rented property?

• Tax Receipt.
• Electric Bill (duly attested by professional).
• Telephone Bill (only BSNL/MTNL or such nationalized telecom company).
• Possession Letter.
• Registered Property Ownership Deed.
• Sale Deed.

 

60) Can I attach my bank statement as an address proof for the registered office my Company?

You can only provide a bank statement which is of a nationalized bank, like SBI, after getting it attested by the bank manager.

61) Who allots DIN?

Central Government (Office of Regional Director (Northern Region), Ministry of Corporate Affairs) will allot the DIN.

62) What are the additional requirements for DIN of a foreign national?

All documents (including photo) shall be certified by the Indian Embassy or a notary in the respective country of the individual.

63) What is the validity of a DIN? Do we need to renew it?

DIN Number is a one-time formality. It has a life-time validity. There is no requirement to renew it.

64) Whether Provisional DIN can be used for e-filing?

No. Only an approved DIN can be used for e-filing.

65) Can I introduce my wife as the second director of my Company?

Yes. You can introduce your wife or any other family member as the second director.

66) I reside in Kerala. Can I opt for your services?

Definitely. The entire process of incorporation is managed electronically. Moreover, as per our service terms, complete confidentiality is assured with respect to the documents sent electronically.

67) We applied for the name availability of a company. The spelling has been mis-spelled and the mis-spelled name is approved. Is there any way to change it since we do not want to continue with the wrong name?

You can apply for the name freshly along with an application to the concerned ROC, stating the grounds for applying for the fresh name. You can also provide the copy of the Letter of Correspondence of Name Approval along with the application. Alternatively, you can incorporate the company with the mis-spelled name and then apply for a change of the name of the company.

68) Can an OCI Card holder be appointed as a director in a company? Can salary be paid to him?

Yes, an OCI Card holder can be appointed as a director in a company. Salary can also be paid to him and the salary will be taxable in India.

69) What should be the minimum number of employees with which I should register my company?

There is no restriction on minimum number of employees. A company can be incorporated even with zero employee.

 

70) I wish to register a company in pharmaceuticals. Is there any additional requirement for that?

You may need a license under the Food and Drug Administration Act.

71) Can I register a company with software development, real estate and sales and marketing as the main objects?

The main objects of the company have to be absolute and not varied. Hence, you cannot register your company with all the above activities as main objects as they are not related to each other.

72) I want to start a company with a specific word in its name. In future, I want to start more companies under the group, containing the same common words. Am I allowed to do so?

Yes. In case the future companies are not subsidiaries of the mother company, you will need a No Objection Certificate for incorporating the new companies.

73) I am trying to check the availability of name for my company. But when I am entering the name, a blank box appears which says “undefined”. What am I doing wrong?

You are not doing anything wrong. After entering the desired name, if the message displays “undefined”then it means that the name is available.

74) I have applied for the DIN of a company. Are my personal details accessible to the public? I do not want to share my personal contact numbers and e-mail IDs with the general public at large.

The personal details, namely the contact number and e-mail IDs that are entered in the DIN Form are only for the record purpose of the DIN department. They are not available for general display. The general public can only access the information related to your name, father’s name, date of birth, address and DIN number.

75) What is CIN Number? Where can I find it?

CIN number means Corporate Identification Number. It is like the identity number of the company. You can find it in the Certificate of incorporation of the company.

76)In what form should I send you all the documents for registering a company? Do I need to send you the hard-copies of the documents via courier?

Just like the MCA, all our services are managed electronically. Hence, you can attach the document as a PDF, GIF, JPG, BMP, PNG or TIF. Moreover, you do not need to send us any hard copies.

77) Is there a minimum and maximum age for being Director of a Company?

There is no maximum age for being a director in a company. However, the minimum age is 18 years.

78) What is INC 29?

The Integrated E-Form INC 29 is available with effect from 01^st May, 2015 for One Person Company, Private Company, Public Company and Producer Company.

INC-29 does away with filing of multiple applications/forms saving time and payable fees. It combines the processes relating to:-

1. Allotment of Director Identification Number (DIN) (up to three Directors),
2. Incorporation of a company, and

iii. Appointment of first Directors of the company.

79) What are the advantages of filing INC- 29?

 These are the advantages of filing INC- 29-

• New Company can be incorporated within 24-48 hours post filing INC 29 with the Ministry.
• You can apply for PAN (Permanent Account Number) and TAN (Tax Deduction Account Number).

80) What are the disadvantages of filing INC- 29?

These are the disadvantages of filing INC- 29-

• The E- Form INC-29, allows applicants to submit only a single name for the company. So, while applying applicants has to undertake the necessary diligence regarding the name keeping in mind the guideline issued by the Ministry for the Name Approval. In case the name is applied is rejected then you can have the option to re-submit it for 1 more time. Further, it remains unclear how this will not lead to more rejections.
• The E- Form INC-29 is single integrated Form, but do not eliminate any procedure. It’s just that you must now re-submit everything at once. The fact is only a single resubmission is allowed before you have to file the entire form freshly.

81) What is a One Person Company (OPC)?

A One Person Company (OPC) is a hybrid structure, wherein it combines most of the benefits of a sole proprietorship and a company form of business. It has only one person as a member who will act in the capacity of a director as well as a shareholder. Section 2(62) defines One Person Company as a company which has only one person as a member.

82) What will be the form of One Person Company?

One Person Company will be formed as a “Private Limited Company”. It can be formed as company limited by share capital or limited by guarantee or unlimited company. The words “One Person Company” will have to be mentioned in brackets below the name of such company, wherever its name is printed, engraved or affixed.

83) What is the minimum authorized capital for starting up a One Person Company?

The process of starting a One Person Company is the same as that of a general private limited company. There is no minimum paid up capital requirement.

84) What is the minimum number of directors and shareholders to form a One Person Company?

A One Person Company can be started with one shareholder & director only.

85) Who is a nominee in a One Person Company?

A nominee is a person who in the event of death or disability of the subscriber of the One Person Company shall assume his position. Memorandum of Association of a One Person Company will mandatorily prescribe the name of the person.

86) Can I appoint my wife as my nominee for my One Person Company?

Yes. Anyone can be appointed as a nominee, provided he or she holds a correct PAN in his or her name.

87) How many One Person Companies can I form?

One individual can form only one One Person Company.

88) Can a foreign national start a One Person Company?

No. Only an Indian citizen and resident can form a One Person Company.

89) Who is considered as resident for the purpose of forming a One Person Company or being appointed as a nominee?

For the purposes of this rule, the term “resident in India” means a person who has stayed in India for a period of not less than one hundred and eighty-two days during the immediately preceding one calendar year.

90) In how many One Person Companies can a person become a nominee?

A person can become a nominee in not more than 1 One Person Company.

91) Is there a minimum and maximum age for being Director of a Company?

There is no maximum age for being a director in a company. However, the minimum age is 18 years

92) How can a private limited company be converted into a One Person Company?

Post obtaining the same, it will have to pass a Special Resolution in the General Meeting.

The One Person Company shall file file copy of the Special Resolution with the Registrar within thirty days from the date of passing such resolution in Form No. MGT. 14.

The company shall file an application in Form No. INC. 6 for its conversion into One person Company.

Please visit us at Company Registration for any assistance or query.

 

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