In India, the registration process of a company is governed by the Companies Act, 2013. There are three types of companies in India: public limited company, private limited company, and one-person company. In the following sections, we will have a detailed look into business registration in India, types of companies you can start and more.Let us first discuss the types of characteristics of a company and the types of companies you can start in India.
Did you know?
SPICe+ is the form used for the registration of a company in India under the Companies Act 2013.
Characteristics of a Company
- Incorporated Association: The Companies Act requires that a company be incorporated or registered. In the event of a 'public Company,' the minimum number of members required is seven, whereas in the case of a 'private Company,' the minimum number required is two.
- Legal Entity Distinct from its Members: Corporative Personality is another name for this trait. Furthermore, the company's legal entity is distinct from the legal entity of its members. The case law of Saloman Vs. Saloman & Co. Ltd. can also be referred.
- Artificial Person - It’s a very important feature of a Company that Company is an artificial person. A company is known as such type of or artificial person because Company is created by law and destroyed by law.
- Limited Liability - One of the main advantages of trading through a limited company is that the company members are only accountable to a limited extent for the payment of the company's debts.
- Perpetual Succession - As an artificial person, the company cannot be harmed by illness and does not have a predetermined lifespan. The Company is unaffected by its members' death, insolvency, or retirement because it is separate from them. Members may come and go, but the Company can go forever.
Types of Companies
- Private Company - A Private Limited Company must have a minimum of two members, which can be increased to a maximum of 200 at any time. The above-mentioned statutory limit must be followed at all times.
- Public Company - The Public Company has no upper restriction on the number of members. However, a minimum number of participants is required. A public company with seven members has been established, and companies that are listed on the stock exchange are examples of public companies.
- One Person Company - One type of private limited company where only one member is required to form a company. In OPC, there is only one member at any time during its existence.
Also Read: All you need to know about Firm vs. Company vs. Partnership vs.LLP
Advantages and Disadvantages of a Company
Advantages
- Liability for shareholders is generally limited.
- The shares of the company held by the shareholders can easily be marketed in the stock market.
- The existence of the company is unaffected by the members.
Disadvantages
- Setting up a company is cumbersome, and it involves several stages starting from the promotion, which is an expensive job.
- The long hierarchy of the organisation delays the decision process etc.
- The directors sometimes work towards the furtherance of their interests.
Steps in Registration of a Company in India
The following are the steps involved in registering a company in India:
Step 1: Obtain Digital Signature Certificate of the proposed members and directors
Step 2: Check for name availability in SPICe E Form (Part A) to be filed online at www.mca.gov.in. Three names in the order of preference can be submitted along with ROC fees of ₹1000. The reasons mention the reason for choosing the particular name and main objects of the company.
Step 3: After the name approval, SPICe Part B is enabled. Along with that, Form SPICe AOA, SPICe MOA, AGILE Pro, and SPICe INC 9 are enabled.
Step 4: Complete the forms mentioned above and submit your application
Step 5: The MCA will check the form and will grant the certificate of incorporation if all the documents are in order.
Documents Required Under Companies Act 2013
Firstly, the members have to decide who shall be the directors of the company. For every director, the following documents are required.
- PAN card copy
- Address proof (Aadhaar Card Passport, electricity or telephone bill (not older than two months)
- Passport size photograph (hard copy as well as soft copy)
- Email ID mobile no.
- Current occupation
- Educational qualification
- Verification
- Digital signature of all directors
For the Proof of Registered Office Address Requires
1. Conveyance Deed/Lease Deed/Rent Agreement with rent receipts
2. Copies of bills (not older than two months)
For Registration of a Company in Various Forms
Information to Be Furnished in SPICe E Part B –
- Authorised Capital of the company
- Paid-up Capital of the company
- Detail of members
- Address of the company
- First Subscriber and Director Details
- Particulars of the stamp duty paid
- Information relating to PAN and TAN
- Attach the requisite documents
- The form has to be digitally signed by one of the directors and a professional.
Also Read: How To Get A Business License In India?
Information to Be Furnished in Agile Pro
It is a form through which Application for GST, Employees State Insurance, Employees Provident Fund, Profession Tax Registration, Shop, and Establishment Act Registration and Opening of Bank Account form can be made. In this Director Details and other details like address of the company and documentary evidence have to be furnished.
Information to Be Furnished in SPICe MOA and AOA
It contains information about the main objects of the company, object ancillary to the main objects, and articles clauses.
Conclusion
We hope that this article is useful for you in knowing about the procedure for registration of a company in India, the various forms for filing it and the information to be furnished.
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