Procedure of Company Formation (Private Limited Company), in India.

Step by step guide to Formation / Registration / Incorporation of a Private Limited Company, in India.

*** Updated as on 2’nd May, 2014***   

What’s New/changed ?

  • Incorporation Procedure of Private Limited Company as per Companies Act 2013.

Minimum requirements for the Private Limited Company

  • Minimum 2 Directors [As per Section 149 (3) of the Companies Act, 2013 (implemented with effect from 01.04.2014), every company shall have at least one director on its board of directors, who has stayed in India for a total period of not less than one hundred and eighty two (182) days in the previous calendar year.]
  • Minimum  2 Shareholders
  • The directors and shareholders can be the same person
  • Minimum Share Capital shall be Rs. 100,000 (INR One Lac)
  • Application of allotment Director Identification Number (DIN) for all the Directors
  • DSC (Digital Signature Certificate) for two Directors

The complete procedure is primarily divided into following 8 Steps.

Step 1. Application for Director Identification Number (DIN) in form DIR-3 & DSC (Digital Signature Certificate)

What is a Director Identification Number (DIN)?

Director Identification Number (DIN) is a unique identification number issued by the Ministry of Corporate Affairs (MCA), for an existing director or a person intending to become a director of a company.

Documents required for DIR-3 Application

In case of Indian National 

a) Identity Proof: Copy of PAN Card  (Income Tax Permanent Account Number (PAN) is mandatory in case of Indian National and in such cases applicant details should be as per Income tax PAN)

b) Address Proof: Copy of Passport or Election/Voter ID or Ration Card or Driving license (address having pin code) or Electricity/telephone (Utilities) bill  or AADHAR Card. All this should be in the “Name of Applicant” only and it should not be older than 2 months from the date of filing of the e-form.

c) Passport Size Photograph (latest) : 1 photocopy  or a soft-copy in (.JPEG format)

d) *Current Occupation

e) *Email Address of the Applicant

f) *Mobile/Cell Number

g) *Educational qualification

h) *Verification to be signed by the Applicant. See the attached DIR4 format

In case of Foreign National 

a) Identity Proof: Copy of Passport (mandatory)

b) Address Proof:  Address proof should not be older than 1 year from the date of filing of the eForm.

c) Passport Size Photograph (latest): 1 photocopy or a soft-copy (in .JPEG format)

d) *Current Occupation

e) *Email Address of the Applicant

f) *Mobile/Cell Number

g) *Educational qualification

h) *Verification to be signed by the Applicant. See the attached DIR4 format

Important Notes :

1. All the documents require “Self attestation”.

2. In case, the director is residing outside India, the attached supporting documents should be attested by the Consulate of the Indian Embassy, Foreign Public Notary. In case of director, supporting documents can also be attested by Company secretary in full time employment / CEO / Managing director of the Indian company in which he / she proposed to be a director.

3. DIR-3 shall be digitally signed by the same person i.e. applicant who is filing the application and by either of the following:

a) Company Secretary (in whole-time practice) or a Chartered accountant (in whole-time practice) or Cost accountant (in whole-time practice)

b) Company secretary in full time employment or Director of the company in which the applicant is to be appointed as a director

4. While making DIR-3 Application following details are mandatory :

First Name, Middle Name, Last Name, Details of father of an applicant (even in case of a married woman)

In case of a Married woman, a photocopy of the Marriage Certificate is required (If DIN needs to be in the “Changed Name”)

5. There could be instances of DIR3/DIN Rejection. Refer “Common Causes of DIN Rejection” for the resolution.

6. * Starred items are mandatory fields of DIR-3 application 

What is a Digital Signature Certificate (DSC)?

Digital Signature Certificate (DSC) is the digital equivalent (i.e. electronic format) of physical or paper certificates. Examples of physical certificates are driver’s license, passport. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver’s license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove your identity, to access information or services on the Internet or to sign certain documents digitally. Since MCA accepts electronic submission of Forms on its website the DSC is mandatory for all the users.

Documents required for obtaining DSC

a) Digital Signature Certificate application Form (duly signed by an applicant). An applicant is required to sign across the photo.

Download the DSC Application Form (Class II Individual Certificate)

b) All other documents are same as required for the DIR-3 Application

Note: All the documents require “Self attestation” and identity proof and address proof should be attested by either a Gazetted officer  (Class I) or Bank manager or Post Master.

Step 2. Search for the Company Name availability

The Promoters have to provide at least 6 names in the order of their preference/priority. The Promoters can themselves search for the available names by visiting the MCA Website: Check Name Availability 

It is also advisable to check any pre-existing Trademarks already registered with the Company name being Proposed, since RoC normally scrutinises the same & may reject the Proposed names on that basis (if similar TM Name is already registered). Promoters should search for any existing Trademark using http://ipindia.nic.in/ website Check Trademark .

Step 3. Application for the Name availability

After drafting of Main Object of the proposed company, need to file e-Form INC-1 (Application for reservation of name) with Registrar of Companies for name availability. The Applicant needs to give 6 proposed names in preference/priority along with their meaning and significance of each word.

Note: Refer the “undesirable names” rules extracts from the Companies (Incorporation) Rules, 2014.

Also refer MCA General Circular on Use of word ‘National’, ‘Bank’, ‘Exchange’, ‘Stock Exchange’ in the names of Companies or Limited Liability Partnerships (LLPs). Refer General Circular No. 2/2014

Step 4. Drafting of Memorandum of Association (MOA) & Articles of Association (AOA)

What is a Memorandum of Association?

Memorandum of Association covers fundamental provisions of the company’s constitution. It covers main object and other objects of the company.

What is Articles of Association?

Articles of Association contain rules and regulations governing the internal management of the company. It is a binding contract between company and its members and members among themselves defining their rights and duties.

As per Section 4(5)(i) of the Companies Act 2013 upon receipt of an application under sub-section (4), the Registrar may, on the basis of information and documents furnished along with the application, reserve the name for a period of sixty days from the date of the application.

After name approval from ROC, the next step is to draft MOA & AOA. The subscribers need to specify Name, Address, and Occupation in their own handwriting & sign the subscription pages of MOA & AOA.

Where subscriber to the memorandum is a Foreign National (residing outside India), please refer Chapter 2 of Companies (Incorporation) Rules, 2014 notified by Ministry of Corporate Affairs for knowing the procedure of obtaining attestation and notary while signing subscription pages of Memorandum and Articles of Association and other relevant document.

Step 5. Filing of e-forms with RoC (Registrar of Companies)

Following Forms to be filed/uploaded on the MCA Website.

a) Form INC-7 : For application of Incorporation of the Company

i) Mandatory attachments to e-form INC-7

1. Memorandum of Association

2. Articles of Association

3. Declaration by Professional in INC-8

4. Affidavit from the subscriber to the Memorandum in Form No.INC-9

5. Proof of residential address which should not be older than two months

6. Proof of identity

7. Verification of signature of subscribers i.e. Form No. INC-10, in case the company is not having share capital.

8. It is mandatory to attach entrenched Articles of association if any of the articles are entrenched.

ii) Optional attachments depending upon case

1. Copy of in principle approval granted by the Reserve Bank of India or any concerned authority in case proposed company shall be conducting NBFI (Non-Banking Financial Institution) activities

2. NOC in case there is change in the promoters (first subscribers to Memorandum of Association)

3. Proof of nationality in case the subscriber is a foreign national

4. PAN card (in case of Indian national)

5. Copy of certificate of incorporation of the foreign body corporate and proof of registered office address

6. Certified true copy of board resolution/consent by all the partners authorising to subscribe to MOA

b) Form INC-22 : For Notice of situation of registered office

Attachments to e-form INC-22

1. Proof of Registered Office address (Conveyance/Lease deed/Rent Agreement along with the rent receipts) etc.

2. Copies of the utility bills (proof of evidence of any utility service like telephone, gas ,electricity etc. depicting the address of the premises not older than two months is required to be attached).

3. No Objection Certificate or permission to use

4. Certification of e-form INC-22 by CS/CA/CWA (in Whole Time Practice)

c) Form DIR-12 : For providing information about particulars of appointment of Directors of the company and Key Managerial Personnel

Attachments to e-form DIR-12

Following are the Mandatory attachments in case of an appointment of a Director / Manager / Company Secretary / CEO / CFO.

1. Letter of appointment

2. Declaration by first director in Form INC-9

3. Declaration of the appointee director, managing director, in Form No. DIR-2

Step 6. Payment of RoC Fees & Stamp Duty

After filing of documents online, we need to make payment of RoC fees and Stamp Duty electronically which is based upon the Authorised Capital of the Company.

The MCA Fee Calculator  currently being unavailable, please refer the attached “Fee Schedule

Step 7Verification of documents / forms by RoC

After payment of all RoC Fees & Stamp duties, RoC verifies/scrutinises all the documents and forms  and may suggest few changes to be made in the attachments or form itself. We need to make necessary changes accordingly.

Step 8. Issue of Certificate of Incorporation by RoC

Once all the Forms are duly approved by RoC, the digitally signed “Certificate of Incorporation” is emailed to the Directors.

As part of the Green Initiative by the MCA (Ministry of Corporate Affairs), few Certificates including “Certificate of Incorporation” are now issued only in the electronic format i.e. soft-copy (having digital signature of RoC Registrar).  Once the Incorporation Certificate is received, Company can start it’s operations.

How to validate a Digital Signature on the Incorporation Certificate? 

The Certificate of Incorporation (CoI) received in the .pdf (which opens in “Adobe Reader”) format, may display “Validity Unknown” for the Digital Signature. Please follow the steps mentioned  here to validate the same.



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Legal Disclaimer:
The information / articles & any replies to the comments on this blog are provided purely for informational and educational purposes only & are purely based on my understanding / knowledge. They do not constitute legal advice or legal opinions. The information / articles & any replies to the comments are intended but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as a legal advice or an indication of future results. Therefore, I can not take any responsibility for the results or consequences of any attempt to use or adopt any of the information presented on this blog. You are advised not to act or rely on any information/article contained without first seeking the advice of a Practicing Professional.

914 thoughts on “Procedure of Company Formation (Private Limited Company), in India.

  1. I have Few Questions
    1) We have filed form to ROC regarding name availability . also given the 4 names according to priority as per form requirement,
    we have also chk the first priority name on ROC website & also search on trademark website and same is not available.
    BUT now ROC has approved 3rd name in the list. But I want first name which is my priority. IS name approval is ROC discretion ? or can I challenge ROC why not approved first name.

    • Name approval is discretion of ROC. While filing name application, if you want that first name must be approved by ROC, then you have to give one option only. if you will give more option, then ROC may think and approve the names as per priority.

  2. Great to find that there are still a lot of selfless & helping professionals like you who are working hard to make things simple to the novices like us. Congrats & keep it up!

    This blog says it was updated last on 2nd May 2014. Does it mean that there is no modification in the procedure/requirements since then or the changes are yet to be updated? thanks in advance for an early reply.

    • Thanks for your comment. Regarding my last update, the Government has not made much updates in the Acts or Rules. but there are few updates during the year, such as Acceptance of Deposit Amendment Rules 2015, Companies Audit Report Order 2015, Companies (Incorporation) Amendment Rules 2015 (i.e. e-form INC-29) which are yet to be posted on my blog.

  3. My problem is that when i feel the dir3 thats required director din no. or membership no of co. secretory

    plz help me

  4. mam really thanks for writing this blog it is so helpfur whoever is needed.

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