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

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

What’s New/changed ?

*** Updated as on 1st February, 2016***

On 22.01.2016 the Central Government has made some important changes in the previous Companies (Incorporation) Rules, 2014.

  1. These rules may be called the Companies (Incorporation) Amendment Rules, 2016.
  2. They shall come into force from 26th day of January, 2016.
  3. As per this amended Rules, the incorporation process is simplified by the Government.

Important changes:-

Sr. No. Companies (Incorporation) Rules, 2014 Companies (Incorporation) Amendment Rules, 2016.

 

(i) Rule  8 Sub Rule  (2) ( b)

(b) The name shall also be considered undesirable, if-

(i) the proposed name is identical with or too nearly resembles the name of a

limited liability partnership;

(ii) it is not in consonance with the principal objects of the company as set out

in the memorandum of association.

(sub-clause (ii) of clause (b) shall be omitted;

 

“It means that the proposed name shall not be in consonance with the principal objects of the company as set in MOA.”

(ii) Rule 8 Sub Rule (2) (b)

(b) The name shall also be considered undesirable, if-

(x) the proposed name is vague or an abbreviated name such as ‘ABC limited’ or ‘23K

limited’ or ‘DJMO’ Ltd: abbreviated name based on the name of the promoters will

not be allowed. For example:- BMCD Limited representing first alphabet of the name

of the promoter like Bharat, Mahesh, Chandan and David

sub-clause (x) of clause (b) shall be omitted;

“It means that henceforth proposed name which is abbreviated or vague name shall be allowed.”

(iii) Rule 8 Sub Rule (2) (b)

(b) The name shall also be considered undesirable, if-

(xvii) it is intended or likely to produce a misleading impression regarding the scope or

scale of its activities which would be beyond the resources at its disposal:

sub-clause (xvii) of clause (b) shall be omitted.

The previous clause (xvii) is omitted.

(iv) Rule 8- Sub Rule (3) If any company has changed its activities which are not reflected in its name, it shall change its name in line with its activities within a period of six months from the change of activities after complying with all the

provisions as applicable to change of name.

sub-rule (3) shall be omitted.

“It means that the company is not required to change its name as per the new activity within 6 months.”

 

(v) Rule 8- Sub Rule (4) In case the key word used in the name proposed is the name of a person other than the name(s) of the promoters or their close blood relatives, No objection from such other person(s) shall be attached with the application for name. In case the name includes the name of relatives, the proof of relation shall be attached and it shall be mandatory to furnish the significance and proof thereof for use of coined words made out of the name of the promoters or their relatives. sub-rule (4) shall be omitted.

It means that if the key word includes the name of person other than promoters or their close blood relatives, NOC from such person shall not be attached to e-form INC-1 (Name application form).

(vi) Rule 9. Reservation of name.-

An application for the reservation of a name shall be made in Form No. INC.1 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014.

In the principal rules, for Rule 9 the following shall be substituted namely: –

“9. Reservation of name – An application for the reservation of a name shall be made in Form No. INC.I along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 which may be approved or rejected, as the case may be, by the Registrar, Central Registration Centre.”

 

(vii) Rule 36

 

 

(4) In the principal rules, in rule 36, in sub-rule(12),-

(i) after sub-clause (b), the following shall be inserted.-

‘(ba) After the resubmission of the documents and on completion of second opportunity, if the registrar still finds that the documents are defective or incomplete, he shall give third opportunity to remove such defects or deficiencies;’ Provided that the total period for re-submission of documents shall not exceed a total period of thirty days.

 (ii) in sub-clause (c), for the words’two opportunities’, the words ‘three opportunities’ shall be substituted.

(viii) e-form INC-1 e-form INC-1 is also changed

 

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.

1,141 thoughts on “Procedure of Company Formation (Private Limited Company), in India.

  1. I want to start a private ltd. company. for this minimum how man no. of persons are required as per the new companies act ? can i start a one man company ? can i make my two minor children ( 15 years and 12 years ) as partners / shareholders / directors ?

    • At least two directors shall be required for formation of company. The Company Bill 2013 has been passed on 08.08.2013 by Rajya Sabha, but still Company Act has not been amended. You cannot make two minor children as director of company. After incorporation they can be appointed as nominee directors after incorporation process.

  2. Hello Meenal,

    Me and my father are whole time directors of a pvt ltd company. Now we are planning to add one more whole time director, but on certain terms and conditions.

    My query is what is the procedure to add the new director and what type of agreement is made between the company and the new appointed director.

    • For addition of new director, the existing directors shall convene Board meeting for appointment of Additional Director as per Section 260 of the Companies Act, 1956 and pass Board Resolution. The company shall file form 32 within 30 days from the date of passing of board resolution.

  3. respected ma’am

    i have a plan to start a business and i liked a name for it, but when i checked in name availability i found some similar name for example iam thinking of giving xxx group but there is names like xxx interio llp, xxx jewellery and xxx sofa studio etc. will it create any problem for my company’s name, can i give that same name or should i have to change.

    iam eagerly waiting for your reply to get more information.

    thankyou
    with regards

    • As per Name Guidelines, the new name shall not be similar to existing registered company/ LLP. But most of the cases, the prefix will be same, and activity is different, in that case the same name will be acceptable. The procedure of approval of name may differ from One Registrar of Companies to another. My answer is based upon your question, but the name availability needs to be checked in detail.

  4. respected ma’am

    i have a plan to start a business and i liked a name for it, but when i checked in name availability i found some similar name for example iam thinking of giving xxx group but there is names like xxx interio llp, xxx jewellery and xxx sofa studio etc. will it create any problem for my company’s name, can i give that same name or should i have to change.

    iam eagerly waiting for your reply to get more information.

    thankyou
    with regards
    Nabeel

    • Please read Name Guidelines specified by the Ministry of Corporate Affairs. It would be impossible to discuss on blog, which is beyond the scope of work. Please call me.

  5. One of female director of our company got married after incorporation of pvt Ltd comp
    i want to know is it possible to change Surname of female director after marriage & if yes what is the procedure

    • Yes, it is possible to change the surname of female director after her marriage. She shall be required to update her name by way of filing e-form DIN 4 on http://www.mca.gov.in. She should attach to e-form DIN4 copy of -Pan card ( after change of name), address proof, marriage certificate,Verification (Annexure II) as per DIN Rules. All documents should be self attested and certified by professional. Please read help instructions of Din 4 available on MCA portal.

  6. Hello Mam

    What is the process for incorporating a Private limited chit fund/ Nidhi company.
    what are the additional formalities and fees to be payable to the department
    Kindly Reply

    • For knowing more information please call me because that will need to consult you and for which some consultancy fees would be charged.

  7. Dear Meenal

    Hi. You and your blog are a very great help for people like me.

    Please kindly be informed that we as 4 foreign individuals decided to establish a private limited company in India in free trade zone. I have some questions in this respect. Is it possible to contact you via OOVOO or SKYPE.
    Please inform me about that.
    Thank you

    Hassan

  8. Hello Mam,
    Please let me know the below:
    1) Is it compulsory that I need to have a capital of 1 lakh to start a pvt ltd company? and if yes, do I have to show it in the current account or may I use the capital for infrastructure and other costs and present the same in the balance sheet ? Is this ok ?
    2) How many days would it take for the registration process ?
    3) How much would the registration cost ?
    4) Is it advisable to approach a broker for the registration process ?

    • Yes, it is mandatory to have capital of Rs. 1 lakh to start a Private Limited company. yes, You should deposit it in the Company’s current account and can use for business operation. Regarding 2,3 and 4th questions I request you to please call me.

  9. hello maam,
    if you could clearify the following

    Power of ROC is to be attached with which form?

    form1 or form 18 or form 32?

    Thank You

  10. Dear Mam,

    Can I register a name of a company ending Inc. in India. For instance can i keep a name ABC Inc. (in case it does not belong to someone).

    Regards
    Pankaj

    • The company name should end with either Private Limited or Limited ( in case of Public company) as per the Companies Act, 1956. The word ending with ” Inc” is normally used outside India.

  11. Dear madam,
    Nice discussions and knowledge sharing.
    We have a partnership firm. It would be beneficial to convert it into a private Limited company or a new private limited company should be form with 1 lac capital thereafter that company should take ovewr the partnership firm under merger/takeover. Directors partners will be same. Newly form co. will have liberty for other takeovers also. whereas if a running partnership firm is converted in Pvt Ltd co. then limitation exists.

  12. Hi,

    We are filing a pvt limited to provide software services across India and abroad.

    We have two choices to opt for filing state.
    Bangalore OR Ahmedabad

    We will offices at both the cities but we are not sure which city to pick for filing papers.
    Any suggestions and reasons to choose city of filing ?

    Thanks
    Saurabh

    • The forms of incorporation shall be filed with the Registrar of Companies, within whose jurisdiction the office is situated.
      if you wish to form in Bangalore, then you have to file in ROC Bangalore. if you wish to form it in Ahmadabad- then ROC Gujarat. Every state is having different ROC to deal with incorporation process.

  13. hi madam ,,,
    i have some question to ask , you as i am starting a new company,,,,
    1)what happen to the share capital in pvt ltd 100000 rs.
    2) can we use this money or i have to deposite it the government.

    • For incorporation of private limited company, the minimum authorised capital should be Rs. 1 lakh. after incorporation of company, the subscriber / shareholder of company should deposit subscription amount in current account of company’s bank before end of financial year. You can use this money. You need not deposit it with Government. Only stamp duty and registration fees to be paid based upon amount of authorised capital.

  14. dear mam,
    i want to know that a paper manufacturing pvt ltd company whose turnover is 4.5 crores. wat r the ROC MATTERS n statutory requirnmemts it has to fulfill with the help of a company secretary? can these matters be complied with the help of a ca or a icwai???

    • In the question it is mentioned that turnover of 4.5 crore. I think your question is – whether company having turnovr of 4.5 crores needs to appoint CS in Full time employment? Please clarify me.

      • dear mam,
        yes whether a pvt ltd company which manufactures paper with a turnover of 4.5 lakhs – 5lakhs require to appoint a cs r nt? if nt then what r the roc matters it requires to comply on a regular basis with the help of a practising cs…….thanks

        • The appointment of CS as employee shall be required if the Paid up capital is Rs. 5 crore or more. Whether to appoint CS as employee or to appoint CS who is in Whole time practice to do all regular compliance (to issue Compliance certificate) would depend upon the amount of paid up capital and not on turnover basis.

      • dear mam,
        if a person wants to be a director in future can he apply fr his own personal din??& what is the procedure to hav a din???

        • The person can apply for his own DIN which he can use in future. But as per recent amendment of Ministry of Corporate Affairs (GOI), once the DIN has been allotted to the person, he must utilize his DIN within 365 days from the date of allotment,otherwise DIN shall be lapsed.

  15. Thanks for the information Meenal. Your active participation has helped solve a lot of people’s problems.

    I am facing a problem too. I am registering a company in Mumbai. I have received the approvals for the name etc. The problem is I don’t have an address that I can use for registration of the company. I live with my parents and the house is rented in the name of the company my father is employed. Our own permanent address is from Hyderabad. My friends are facing objections from their co-op societies. I thought I’d use a virtual office, but I’m unable to find one. My last idea is to use a PO Box number. Is that acceptable or do you know of an Virtual Office in Mumbai that i could use?

    Thanks
    Varun

    • For the purpose of registered address of the company, one can use virtual office but not PO box number.

      • I have submitted my application to the RoC using a virtual office space address for registration, but they have rejected my application saying the NOC from the virtual office space should in the form of a Board Resolution and a normal NOC will not be accepted.

        Also, as per the virtual office space rules, they are not allowed to give out an electricity bill, but I need an address proof from their side. They have provided a internet bill, but even that has been rejected.

        Please advise.

        Thank you,
        Varun

        • Please request an owner to provide you electricity bill/ telephone/tax bill. As requested by ROC please provide board resolution and NOC as well.

  16. Dear Ms Meenal,
    follwing are my two queries

    1. Want to make my wife a non-executive director in the private limited company I’m planning to incorporate.
    2.Given the two director requirements to incoprorate a company can the two directors (me and my wife) as Executive and Non-Executive director, respectively is considered as valid requirement?.
    3.Since My wife is a dormant member of this entity can she become an non-executive director with no stakes, as no investments is expected from her?
    4.What’s the difference between promoter director and director?

    Request your expert advise on this.

    Regards,
    RK

    • yes, while incorporation, one director as executive and second as non executive will be considered as valid and acceptable. Promoter directors means the director who is first director at the time of incorporation, promoting new company. He will play major role in the company’s business. Director means an individual who can be added as Additional director/ director or alternate director.

  17. Hello Mam
    This is relating to incorporation of pvt ltd company

    We have filed form 1,18,32 recently
    when checked the status of the same it says as follows

    “Where as in Form No.18 and 1 requires following rectifications /corrections : 1. Municipal Premises number to be included under RO address- in form 18 , 2)Declaration/Affidavit to be furnished by the subscribers/first directors duly stamped as per Circular No. 11/2013 of Ministry of Corporate Affairs. Form should be resubmitted by 30/08/2013 failing which the eForm shall be treated as invalid and shall not be taken on record. (Please refer Regulation 17 of the Companies Regulation, 1956)”

    we have prepared affidavit relating to the circular 11/2013.
    but we did not understand about the first case Municipal no to be included in RO address in form 18.

    We have already included the address as plot no 20, we do not have any municipal no for the same. when asked the owner replied that it is a contonment area and we have the address as plot no 20 paigah colony only, the same is there in power bill also which we have attached to the form 18.

    what should we do now? we have already mentioned in the form 18 as plot no 20 paigah colony and we do not have any municipal no. In the house tax receipt also the address is same as mentioned above.

    can we write any letter to the ROC or any affidavit or declaration required? if yes who shall give it director or house owner. we are tenants in the building

    Kindly reply

    • You have to check with the Registrar of Companies, within whose jurisdiction you have filed Form 1, 18 and 32 for confirming the Municipal Premises number which is mentioned on Form 18.

      • Can a private company hold its AGM at any place? Is special resolution sufficient or AOA should be amended for that purpose?

        what about EGM?

        • As per Section 166(2) of the Companies Act, 1956,every annual general meeting shall be called for a time during business hours, on a day that is not a public holiday, and shall be held either at the registered office of the company or at some other place within the city, town or village in which the registered office of the company is situate.A company can, therefore, hold is annual general meeting at any place within the postal limits of the city in which its registered office is situated, it if is more convenient to its shareholders. Compliance relating to section 166(2) needs to be complied with while holding the annual general meeting.

          • It is in continuation of earlier query -whether EGM can be held in place other than registered office of the company. Yes, EGM can be held in any other place.

  18. In case of change of registered office outside state which form have to be filed first form18 or 21 and within how much time period? and is any of form 18 or 21 require other SRN?

    • For shifting of registered office outside the state e-form 21 should be filed first and then form 18. Please visit the procedure to shift the registered address of the company outside state, on my blog.

  19. hello mam

    My question is relating to the Declaration/Affidavit to be furnished by the subscribers/first directors duly stamped as per Circular No. 11/2013 of Ministry of Corporate Affairs

    Is it enough if i attach the affidavit under optional attachment if any column in form 1 or do i need to submit it physically at the ROC

  20. dear mam,
    i want to know what is transfer ,transmission, lien on shares? & do a pvt company can transfer shares or a public company can only execute these features?

    • Sorry for the delayed reply. I some how missed this question.
      Transfer is selling of shares to other person or existing shareholder. The transfer of shares relates to a voluntary act of the shareholder, transmission is brought about by operation of law.
      The word ‘transmission’ means devolution of title to shares otherwise than by transfer, for example, devolution by death, succession, inheritance. While transfer of shares is brought about by delivery of a proper instrument of transfer (viz, transfer deed) duly stamped and executed, transmission of shares is done by forwarding the necessary documents (such as a notarised copy of death certificate) to the company. On registration of the transmission of shares, the person entitled to transmission of shares becomes the shareholder of the company and is entitled to all rights and subject to all liabilities as such shareholder.

  21. Dear Mam,

    While forming company,Is MOA & AOA require signature of director on each page? and if yes then how many director need to sign? We have taken letter of authority signed by two directors.
    Thanks and Regards…

    • MOA AOA should be signed by subscribers of Memorandum and Articles of association. The directors signature on MOA AOA is not required by law. As per Section 15 and Sec 30 of the Companies, Act, MOA AOA shall be signed by each subscriber who shall add his address description and occupation(in his own hand writing) in the presence of at least one witness who shall attest the signature and shall like wise add his address, description and occupation (in his own hand writing) if any. The subscription page shall be signed by subscriber and not each page of MOA AOA.

      • Dear Ma’am,
        Your Blog is very helpfull. But I have a doubt – Is it mandatory that the MOA and AOA be witnessed by a Practicing CA, CS or CMA. Can the person without professional qualification witness the MOA and AOA.

        • Section 15 specifies about the signature of memorandum that subscriber shall sign in presence of at least one witness. It is not mandatory that MOA AOA should be witnesses by a practising CA/CS. The person signing it, shall be required to mention his name, address and occupation.

  22. Dear Mam,

    While forming company,Is MOA & AOA require signature of director on each page? and if yes then how many director need to sign? We have taken letter of authorith signed by two director.
    Thanks and Regards…

    • To obtain signature of MOA AOA on each page will be considered as good practice. For filing purpose, the subscriber’s sheet of MOA AOA should be signed by subscribers and not of directors. The subscribers whose details are mentioned in Form 1A, should sign it.

  23. If I wish to register a company which contains a word that has already been trademarked and I still wish to get the company registered by that name, how exactly should i proceed.

    The case at hand is that of trying to register “Shutter Diaries Photography Private Limited” and we came across the info that “Shutter” has already been trademarked.

    • I would advise you to check the Class under Trade mark for both – Shutter which is already registered and new proposed name for which you are applying. if the class will be different you may try for the name. If the class will be same, please apply with fresh name.

  24. Hello Madam,

    We have a private limited IT company with 4 directors including me. We all are holding 25% of shares each. But now i want to leave from company and partnership. Could you please tell me the process of how i can get out from partnership and what kind of documents should i need to accept from other three partners ?

  25. Dear Madam ,

    I would like to start pvt .ltd company to import components from overseas and supply to Indian customers .
    What is the procedure?

  26. Madam,
    There is a company which has only 2 directors. I have accused them of a cheque bounce case. They are fighting with a reason stating that one of them is not an active director. Is it possible?

  27. I want to know who will give NOC if the company which is going to be incorporated, wants to keep the registered office same which is already registered office of another company, & the registered office is on the name of that company…. so shall we give NOC on the letter head of that company signed by the Director?

    • If the registered office is on the name of company, obtain NOC from that company duly notarised on stamp paper. The director of the company shall sign NOC on behalf of that company.

  28. Mam,
    for foreign national how should we execute affidavit for him to be a director of indian company.

    your blog is giving me so much of inspiration being a lady as i have started practice from this month

    • Thanks for your comment. You can get affidavit notarized from Foreign Public as per the instructions of the MCA while making DIN 1 application.

  29. Hello Mam,

    i want to know whether the family members can be the members of a pvt ltd. Like we are 2 real brothers & want to register a pvt ltd

  30. Power of RoC declaration or affidavit from the subscriber. Is there any format and is it compulsory to uploaded at the time of submission of documents for formation of company

    • I have updated the article with the Format of the declaration cum affidavit. Please note that there is no prescribed format provided by the Ministry of Corporate Affairs. The attached format is normally acceptable to the Registrar of Companies.

    • Thanks for your reply, Your blog is very useful for many persons. Even lay may can understand the procedures in step by step method. Wish you all the best

  31. dear mam,
    what is an executiv, non executive and independent director?why do a company keep an independent director?.

    • Executive director means the director who is whole time director drawing salary/ remuneration from the company. Mostly he is working director. Non Executive director means director who is not working full time, not drawing salary. Executive and non executive directors are appointed by Private Limited company and Public Ltd. Independent director shall be appointed by Public Company and listed company only. Independent director means a director appointed as per Clause 49 of Listing Agreement. ‘independent director’ shall mean a non-executive director of the company who apart from receiving director’s remuneration, does not have any material pecuniary relationships or transactions with the company, its promoters, its directors, its senior management or its holding company, its subsidiaries and associates which may affect independence of the director. For more details please check Clause 49 of Listing agreement.

  32. Dear Mam

    I am planning to start company ….basis of : 1. Material supply to Saudi Arabia (Import & export) .2 .planning to do some manufacturing like paper cups .3. We will take some contract work from construction .

    I need this all type of work in same company name and whats the procedure to start the company .

    Please guide me i need the full details .What is the procedure by step by step .

  33. Dear Madam,

    In case of opening Bank Account for Private Limited company, can we give, along with other documents, the original resolution passed under letter head of the Company to Bank?

    • While opening of Bank account for Private Limited company, if the Bank insists to submit Original Board resolution, you may require to submit it as per the procedure/format of Bank.

  34. Dear Mam,

    Thank you for the information provided through this blog

  35. Dear Madam,

    In case of partnership registered company, Will company get PAN card ?

    • Yes, Partnership firm / Private limited company / Public limited company, can/should obtain PAN card in it’s own name.

  36. Dear Madam,
    I want to act as an active partner in order do a business with one of my friends and have already shared some amount. Agreement has been done only on a stamp paper of 50 Rs. But I’ve no control what he (my partner) is doing or what is going on as I’m service holder in state government of West Bengal and regular meeting is not happening. In this condition we have been decided to form a Pvt. Ltd or LLP . But my question is, hence I’m in govt. service how can I do it. Is it possible to register my Mother as a director instead of me and I’ll do the job on behalf of her. If this is possible, how can it be done? May my other brothers and sisters demand the share in future? And overall, how can I look after the business as regular meeting is not possible except weekends. Your suggestions, advice and guidance is urgently required.

    With Thanks & Regards
    Sanjib Roy

  37. Dear Mam
    Please provide me with a format of no objection certificate by the director to be filed with Form 1.

  38. Hello mam,

    Can I register the comapny name XYZ indial Pvt. Ltd.

    But XYZ ART SILK MILLS PVT. LTD is already used by someone.

    Please give me some solution,I want to stand the Group of companies.

    • Here XYZ India Pvt. Ltd seems to be different from XYZ Art Silk Mills Pvt. ltd. you have to check the name availability carefully and also check the activity of XYZ India Pvt. Ltd. If the activity is not related you can try to make application.

  39. Hello Mam

    I am a resident of India,I wants to start the company
    Like XYZ but it is already in use can I Make it as XYZ India Pvt. Ltd.
    Under this name I wants to run group of companies.
    Please give me some Suggestion.

    • If the existing name is similar you can not apply for new registration of company’s name by adding India.

  40. dear mam,
    somtimes its written as co. ltd so what does it mean, is it a public company or a private company??

    • Private Limited means the name ending with “Private Limited” and public company means ending with “Limited”.

  41. Quite interesting & helpful blog. A quick question, I am a NRI & would like to setup a Software Services company in India with 2-3 Indian Resident partners. We have not yet decided on the Official registered address. Can we initially use a Virtual Office address for the Company Registration purpose & lateron update the actual physical address, once we own it? Thanks.

    • Being NRI you can register company in India with two or three resident partners. For the purpose of registration, you can use Virtual office address for the company. You can change the registered address of the company later on by filing form 18 with the Registrar of Companies, within whose jurisdiction the office is situated.

  42. Dear Ma’am,

    We are three partners and want to start import export business.So for what type of firm we are require to apply??
    Pvt Ltd or partnership firm??

  43. Dear Mam,

    Please can you tell me procedure with reporting arrangement to RBI when a company allow FDI at the time of its Incorporation through subscribe its Memorandum.

    Please also tell me consequences of Non- Compliance for the same.

  44. Thank you for the very informative blog. I have a few questions:
    1. What is the form of basic deed of LLP:
    a. Like Articles and Memorandum of Association or
    b. Like Deed of Partnership

    2. Is ROC the regulatory body with whom all the forms etc are to be filed for LLP?

    3. An LLP in question does not have a loan clause ( Loan from banks, other financial institutions or others) in its original agreement. If the LLP wants to include this clause should it
    a. Change the agrrement & get it registered or
    b. Pass a resolution & get it registered?

    • Please refer LLP Rules for getting the clauses of LLP deed. It should be as per LLP Rules and Act. Yes. ROC is the regulatory body for filing of all forms of LLP. For changing any clause of LLP agreement, resolution and amendment in the Original LLP agreement shall be required to be made.

  45. Hello, this is a very informative article. I have a few questions.

    I am a US Citizen married to an Indian citizen and have a PIO card. What are all the documents that need to be notarized by the US Consulate? – The passport and address proof? What about the marriage certificate?

    What is the best address proof to use?

    I want to register a services based company. How much should a CA charge to help with this process? What are the pros and cons of having a CA help me that does not live in the same city as me in India?

    Thank you.

    • Sorry for the delayed reply.
      In case if your surname has changed after marriage then along with the passport and address proof, marriage certificate shall be notarised by Foreign Public Notary. You can use either of the electricity /telephone bill or bank statement as an address proof.
      Every professional’s consultancy fees would vary. The location of the professional (CS/CA) does not matter since registration procedure is online.

  46. Dear Madam,
    Me an My colleague Planning to open PVT ltd company in bangalore . we enquired about the initial document required for the formation,as we are planning to go for 50- 50 %share basis, so i want to know who can sign the document and all or can we both sign, if not is it will create any problem for others.in future.

    Please reply
    Vicky

    • I assume that you are asking me signature part on subscription pages of Memorandum and Articles of Association. As per Section 15 of the Companies Act, 1956, the memorandum shall be printed and divided into paragraphs numbered consecutively and be signed by each subscriber ( who shall add his address, description and occupation in the presence of at least one witness who shall attest the signature and shall like wise add his name, address, description and occupation. As per Section 30 of the Companies Act, 1956, the article shall be printed and divided into paragraphs numbered consecutively and be signed by each subscriber ( who shall add his address, description and occupation in the presence of at least one witness who shall attest the signature and shall like wise add his name, address, description and occupation.

  47. Last year my wife started a private limited company. We’ve not done any transactions till date through the company as of now and might not be doing the same for next couple of years. However we would like to keep this company operational. Can you pl suggest what are the Government regulation processes and procedures that we need to adhere to ensure company is live.

    • To keep the company operative and active, you will need to file annual return , balance sheet & profit and loss account every year with the Government.

  48. Whether the Form 2 is required to be filed if shares allotted to directors of Private Company?

    • Yes, form 2 is return of allotment. It is to be filed with ROC within 30 days from the date of allotment to directors.

  49. Dear Madam
    Can 2 NRI’s form a Pvt. Ltd, Company

    • Yes, 2 NRI can form Private Limited company. They need DIN 1 and DSC, and address proof to be submitted with Registrar of Companies and other relevant forms required for incorporation.

  50. Dear Madam

    Can only two NRI’s form a PVT; LTD COMPANY

    • Yes, Two NRI can form Private Limited company. They have to obtain DIN 1 and Digital signature certificate and submit registered address proof of proposed company with Registrar of Company.

  51. Can foreign national be member of Indian private limited company?

    If yes whether their is limit on nominal value of shares that can be issued to foreign national in private limited company

    • yes, foreign national can be member of Indian Private limited company. There is no limit on nominal value of share that can be issued to him.

  52. Respected Mam,
    I want to incorporate a pvt ltd company (marketing) with two directors/promoters me and my mother in Punjab with minimum share capital. How can i get your services in order to get registered in punjab and honorarium for the same.

    • hello madam,i have plan to start the pvt ltd co..for the two directors..mother and son can be as a directors..from small boy itself i have like to start the pvt ltd co..how much amount we require to take a pvt ltd company..
      thanking you..

      • Couple of your questions would require elaborate analysis & consultation, hence would be out of scope of this blog.
        Kindly get in touch with me, if you need further consultation.
        Thanks.

  53. Hi Mam,

    This is Gagan from Punjab, we want to incorporate new Pvt. Ltd. Company in Punjab with 4 No. of director’s.

    # All have Pan Cards, But not DIN.
    # The minimum capital is 1 lakh.
    # The company address in from Punjab.
    #He gives me company seal, Momrandum of assosiation.

    But he want to charges 27000 rs, from us. is it fair?

    • The registration fee (i.e. Government fee) for company would remain the same, the stamp duty would differ from state to state. The professional fees of consultant would change from person to person.

  54. what is the disadvantage of LLP as compared to Pvt Limited

  55. Hi Mam,
    Is it necessary to issue share certificates for a person desirious of becoming a shareholder in a private limited co else any alternative.
    thanks

    • Yes, it is necessary to issue share certificates for a person desirous of becoming a shareholder in a Private Limited company.

  56. Dear madam,
    I,m from retail trade business, i,m planning to form pvt ltd company in near future. Is it possible to have two Directors from the same family member say my wife and me. and what will be the actual number of share holders ?

    • Yes, you and your wife can be directors and shareholders of proposed company. The minimum directors and shareholders for Private Limited company shall be two.

  57. I Have To Register A Pvt. Ltd Company Registration Online. So Which Form I Have To Fill Up !!

    • Form DIN 1, 1A ( name application ) 1 ( Incorporation document),18 ( situation of registered address of company) 32 ( appointment of first directors or managing directors) .

  58. Hi Meenal,
    Thanks for the blog. We want to start a co. 1 of the director is a NRI. Is it necessary for him to get the notary from indian consulate in USA or is there any other way out too. Can he give his PIO card instead ?
    Thanks in advance.

    • If one director is NRI, identity proof, address proof and affidavit should be notarised from Indian Consulate of USA ( home country). Yes, if he is PIO holder, he has to attach notarised PIO card copy also.

  59. Dear madam
    If company fails to file e-form 2 within 30 days of allotment of shares, what are the consequences can a company face.
    Allotment of shares has been done in the month of march 2013, whether the Form 2 can be filed now, if the answer to question is affirmative, then what additional fees and charges would be?
    Looking forward for your answer.

    • Form 2 (Return of Allotment) shall required to be filed within 30 days from the date of allotment of shares.
      yes, it can be filed now by paying additional fees plus normal fees.
      If company fails to file, the company shall pay additional fees along with normal fees. The normal and additional fees would depend upon amount of Authorised capital. Please refer this page on MCA 21 poral- http://www.mca.gov.in/DCAPortalWeb/dca/MyMCALogin.do?method=setDefaultProperty&mode=15, please select the form and fill up required information and you will know the additional fees to be paid.

      • I am a practising Company Secretary . I want to enter into providing trade mark, copy right and patent services. As a company secretary I am authorised to act as a trade mark agent. What else I have to do if I want to act in this areas is there any registration required with IPR Authorities in addition to certifcate of practice I have obtained from the Institute of Company Secretaries of India. If yes what is the procedure and fee. can you enlighten me.

        • Being Practising Company Secretary you can apply for trade mark agent registration. But for copy right and patent services, you will have to check IPR site.

  60. Dear Madam,

    Can a sole Proprietorship be converted into a Private Limited Company, if yes, what is the procedure and tax implications

    please treat this as urgent

    • Yes, One can convert sole proprietorship firm into a Private Limited company. The procedure is the same as to form a Private Limited company. While conversion, the proprietorship firm will be taken over by Private Ltd. The firm will be dissolved after formation of Private limited company.

  61. Do you register companies in mumbai ? If yes how much is the cost?

    • Yes, i do register the companies in Mumbai, regarding cost, it would depend upon many factors such as number of directors, capital.
      For more details i request you to please contact me.

  62. Thanq very much for ur response to my query. Please give ur advice for the following issues too.

    1. We are in process of incorporating the Pvt Ltd Co., which engaged in production of Electric Power through Solar energy and distribute the same to end users. My doubt is, under which main division of industrial activity will it come? Is it under 40(electricity, Gas……) or any other? please advice.. (Form 1)

    2. Can a NRI become a member and director of the pvt ltd co.,? if so, What is the procedure?

    I will be grateful to you.

    Regards.

  63. Ma’am… Can subscribers to the MoA be increased at the time of filing Form-1 where during filing Form-1A such number of subscribers were 2?

    • Yes, there is a provision in the Form No. 1 (Application and declaration for incorporation of a company) to inform change in promoters(First subscribers to the Memorandum of Association).

      You need to attach No Objection certificate along with Memorandum and Articles of Association to Form No.1.

  64. Yes, it would be advisable to form a Pvt. Ltd company in India if you are going for JV (Joint venture) because it is the pre requisite of JV.
    Couple of your questions would require elaborate analysis & consultation, hence would be out of scope of this blog.
    Kindly get in touch with me, if you need further consultation.
    Thanks,

    • dear mam,

      Please tell me procedure and reporting arrangement to RBI, when a foreign company subscribe shares of a Indian company at the time of Incorporation.

  65. Dear Mam,

    Can you please advise in a private limited company can both the directors be of foreign nationals or is it necessary that we have to have an indian director / share holder.

    thanks and regards

    • Yes, Both Foreign nationals can be directors of Private Limited Company and in such case it is not mandatory that there should be one Indian National as a director.
      Thanks,

  66. I want to register a company with a name which is already applied for trademark and currently its status is opposed, can i still register the company and how?

    • I assume that you have applied for TM which is opposed. It seems that the similar trade mark must be registered already by an user.I think it would be better if you apply for another name while registering company since, the trade name is already opposed. Because while making name application to Registrar of Companies, an applicant should give declaration that the proposed name does not infringe the registered trademark rights of any entity or person or a trademark which is subject of an application for registration, of any other person under the Trade Marks Act,1999. The Registrar of Companies also check the trade mark(whether it is applied, opposed, withdrawn or registered).

      Thanks,

  67. hi! I’m a residents of India and I appreciated very much your informative article.

    I’m running a personal websites , online advertising sites etc. now I want to sign sales agency agreement with events managing company and publish some business magazines very soon. my humble question is, do I have to get a proper company with incorporation certificates and other formalities discussed in your article? if so, what would be my best option with minimum capital to start it?and how much money should I have at hand

    thanks in advance

    • If you wish to incorporation a Private Limited company it would be good option. The minimum capital requirement to register Private Limited company is Rs. 1 Lakh Authorised Capital.
      Thanks,

  68. Dear Mam,
    Thanks for your guidance. Since Ahmedabad municipal corporation is not issuing a Shops and establishment renewal certificate without change of address in incorporation certificate and they are not accepting the master data how can I renew my certificate. AMC is asking us to get such a certificate in writing from ROC and when we approached ROC, they deined any such certificate issuance from their offices. Can you please guide me.
    thanks for your help.

    • Yes, the ROC will not give you certificate of incorporation as per AMC’s need. It would be advisable to visit AMC again with the suggestions of ROC and reason of denial.
      Thanks,

  69. Dear Mam,
    We have shifted our registered office in the same city. Can we get a new incorporation certificate with new address. Our new registered office address is reflecting in the master data.

    thanking you in anticipation of your quick response.

    • Dear Mrs. Jolly,

      You cannot get new incorporation certificate with new address. You can keep copy of master data for your records.
      Thanks.

  70. Hello Ms. Meenal,

    came across your blog while browsing some information, very helpful professional advice is been provided, thanks,

    my question is that i am incorporating a new company with one Indian and one Foreign Director, I have received the DIN no., What attestations and care should be taken in Subscribers column by the Foreign Director, Whether the whole MOA , AOA & subscribers column has to be attested in all the pages by the Indian Consulate in the Local Country of the Foreign Director.

    Thanks in Advance.

    • Whether foreign director is also one of the subscribers? If yes, then only subscription page of foreign director needs to be notarized from home country (and not from Indian consulate since he is not NRI).
      In case of foreign subscriber notarization would be from home country. While attestation, foreign director may require to show /submit whole set of MOA/AOA for getting attestation on subscription sheet.

      If foreign director visits India then attestation can be made by any professional.

      Hope this answers your question.

      • Appreciate for your faster response,

        you have suggested that the Foreign Director cum subscriber needs to get the attestation from the notary of the home country, One Practical problem here is that the Director is from spain and to do the notary the whole of MOA & AOA has to be translated in Spanish language ( as informed by the Director) and then to translate back to English language from the approved translator to get the MOA & AOA approved in the ROC of India.

        Kindly guide us as per the above situation.

        Thanks Amit

        • For incorporation of company, if foreign national is director and subscriber of Proposed company, while submitting MOA/AOA with ROC of India, the subscription page (i.e. where the subscriber undertakes to subscribe no. of shares giving his full details, father’s name, address and occupation, signature) should be notarized from Home country. In your case, you shall be required to obtain notary on subscription pages of MOA and AOA which will be one in Spanish and other would be the translation of Spanish into English. You need not require to obtain whole set of MOA/AOA notarized, only last pages i.e. subscription pages shall be notarized.
          Along with that the passport as identity proof also needs to be notarized. In this case also if it is in Spanish Language you should get translation notarized.

          As per the procedure RoC would need the whole set of MOA/AOA in Spanish as well as in English (only last pages notarized).
          Hope this resolves your question.

          • Dear Madam,

            We are planning to incorporate a Company for manufacturere, processors and dealers in earth and rock drilling equipments.
            My querry is
            – whether foreign nation be one of the subscriber in adiition to indian company.
            – our name is approved by the MCA in which we shown him a a proposed director can he be co-promoter to the tune of around 20%.
            – if yes what is the procedure to be followed and documentation required.
            – kindly suggest procedure from FIPB/RBI point of view.

            Thanking you in advance.

            Kindly reply with procedure to be followed.

            Regards,
            Prashant Mistry

          • Yes, Foreign National can be one of the subscriber in addition to Indian Company. He can be co-promoter.
            Regarding procedural and documentation part,it will require elaborate analysis & consultation, hence would be out of scope of this blog.
            Kindly get in touch with me, if you need further consultation.
            Thanks.

  71. Very much detailed and informative explanation

  72. my pvt ltd established in sep, 2012 is having registered office in india, but it provides all the services in abroad and all the employees are also form india but provides services there only,
    so i want to know what would are the compliance to be followed as per
    (i) ROC
    (ii) service tax
    (iii) tds

    • Please get in touch with me since the answers would be elaborate & out of scope of this blog.Thanks.

  73. Question: I am an NRI. Together with an american we would like sell some products in the Indian market. Since both of us are not residents of India can we form a LLP? If not we go the Pvt. Ltd. way. Are there any other options to form an entity with no personal liability.

    Also I would like to understand the role of a director in a Pvt. Ltd.

    Thanks a lot. Your blog is very informative!!

    • If both of you are NRI, for forming LLP one partners should be resident of India if others are NRI.

      In case of Pvt Ltd company, both NRI can form company in India without the condition that one should be resident of India.

      Following is a role of director in a Pvt Ltd Company :

      1) To manage the affairs of the company and control its business
      2) To make major decisions – like allotment of shares/ increase of shares/ declare dividend / invest funds/ borrow money from banks
      3) To sign and execute important deeds, documents, contracts, cheques
      4) To operate bank account of company
      5) To call meetings
      6) To adopt annual accounts

  74. Hi Meenal,

    How to check the name availability ?

    Aatish

  75. Hello Mam,

    You have seen, company used “Inc” followed by its name, what does that mean and could you please tell whether we can use Inc followed by our company. This can be used for indian company as well.

    Currently, I m running a proprietorship firm, can we convert it to PVT. LTD. COMPANY.

    • As per Companies Act, 1956, the name of every private limited company shall end with Private Limited and in case of Public company- end with Limited. You cannot use inc followed by its name. If you are running a proprietorship firm, you can convert into Pvt. ltd.

  76. Hi , please tell me how it cost to found a pvt ltd ? Is this possible with out a C.A. ? Last one, we are two partner then what will the possible minimum share holding for one?

    Thanks

    • To form company is not possible without the certification obtained from CS/CA/CWA in whole time practice. The professional charges would vary from consultant to consultant but the registration fees will remain the same. the minimum Authorised and paid up capital for formation of Pvt. ltd is Rs. 1 lakh. You both can decide the shareholding among yourself accordingly.

  77. excellent formation details Mrs. Meenal. Thanks a lot. My question is whether a person can be appointed as a director on a remuneration basis without any stake in the company and whether it is valid. Awaiting your reply. Thanks & regards.
    d.baskaran.

    • Yes, a director can be appointed on a remuneration basis without his/her stake in the company. In that case he/she will be a director only and not a Shareholder.

  78. WHILE APPLYING FOR DIN THE AFFIDAVIT NEEDS TO BE NOTORISED ON RS 100 OR RS. 10 NON JUDICIAL STAMP PAPER.

    • While applying for DIN 1 application, an affidavit needs to be notarised on Rs. 10 non judicial stamp paper. But due to shortage of stamps amounting to Rs.10, most of the people buy it for Rs. 100.

  79. Nice & informative blog

  80. Can one person form the company & wat is the procedur?

    • I believe you are referring to the Companies Bill 2012 in which there is a provision that only one person can form a Private limited company (called OPC i.e. One Person Company).
      Since the Companies Act 2012 is not yet been implemented currently you can not think of forming it under the Companies Act.
      As per Companies Act 1956, minimum requirement of persons to form a Private limited company is 2.
      I hope this satisfies your question.

  81. Pl. tell me the following.
    For Private limited co.
    1. can members/ shareholders be increased after incorporation?
    2. Can authorised capital be increased after incorporation?
    3.Can members increase their share holding i.e add money later on?
    4. can company office address given as residential address? i.e is it difficult to change address later on?

    • For all your questions, the answer is “YES”. There is no difficulty for change of address later on. The procedure and time taken may vary depending on the new location.(i.e. from one place to another in same city or from one state to another state).
      Regards,
      FCS Meenal

  82. very nice explanation that too in most simple language.

    Plz suggest the procedure by which MOA & AOA will be subscribed by NRI

    • MOA will contain Details of the name of subscriber, his/her father’s/husband’s full name, address and occupation, number of shares held by him/her and his/her signature, date, place. Witness will also mention the same details in the witness column.

      AOA will contain above details except the number of shares.

      Details must be handwritten by each subscriber.

  83. great job….really informative.

  84. Very good and handy explanation.

  85. Recently heard that an Individual can establish a One Man Company or One Person Company (OPC). Is it possible now to Register one?

    • Yes, you are right, an Individual can establish a One Man Company or One Person Company (OPC) as per Company Bill 2012.
      Just now Company Bill 2012 has been passed but Act has not been implemented yet.
      You have to wait till New Companies Act, 2012 gets implemented.

  86. wonderfull!!
    got ansrs to my all qestions

  87. exact and accurate.

  88. Excellent job…………. company formation all steps are clearly defined here and after formation information. your blog clearly explained sole proprietorship and benefits of pvt ltd.

  89. Nice Blog Meenal 🙂

  90. As per new norms for incorporation or for change of registered address of CO. address proof is required, i want to know, What are the documents accepted by ROC as an address proof for incorporation?
    1) if office is rented?
    2) if office is owned?

    Regards
    Kumar Rajeev.

    • Here you go..

      1) If office is rented – Lease Agreement/ Electricity bill/ Index II/ Tax receipt (All should belong to owner)
      2) If office is owned – Electricity bill / Index II /Tax receipt

      Thanks,
      CS Meenal

  91. Hello,

    I would like to know, if one of Proposed director’s PAN Card doesn’t contain LAST NAME, then what …???

    • As per DIN 1 form, the name of an applicant should match with PAN card details. If last name does not exist on PAN card, you will have to amend it before going further for filing DIN 1.

  92. nice blog for company registration process

  93. such a brief explanation step by step even the comment’s and their replies are also very valuable. Thanks for your kind explanation

  94. Very nice and clearly discribed.
    Regards

    A.P.Singh

  95. Very nicely narrated and free from ambiguity.
    I vouch, that it is very handy and ready reference for a rational person. Looking forward your assistance in the same. Do contact ASAP

    Best Regards,
    Yogesh Manjrekar

  96. Dear Cs,

    mine is partnership firm and we r doing export import business, now we move to making a company with a capital of 500000.00
    is this possible that we can make an NRI our share holder of 5%??? and how what is the procedure???.
    besides whether we will get some tax benefit in company as compared to partnership firm coz we r paying 30% in firm.
    besides also suggest what should be cost of formation of company with capital of 500000 including dsc, din

    • Couple of your questions would require elaborate analysis & consultation, hence would be out of scope of this blog.
      Kindly get in touch with me, if you need further consultation.
      Thanks.

  97. Excellent explanation meenal…Thanks 🙂

  98. very simple excellent explanation. I have a doubt. while registering a company, does a person needs to show a physical space / address where the company is located? because my friend doesnt know whether register before or after setting up a physical things.. could you please explain me?

    • Hi Vignesh,
      Thanks for your kind words. Before/while registering a company, a person need not show a physical business space/address. One can use his/her residential address as a Registered address. Once the company is registered , as per provisions in the Companies Act the Registered Address can be changed to the actual business address.

      • Thanks you sir for your kind explanation. As per the above points it’s mentioned “Minimum Share Capital shall be Rs. 100,000 (INR One Lac)” . For this one, the person needs to show a cash to government on bonds / physical things like PC’s for ex.? could you please explain about this?

        • The “Minimum Share Capital” means the Minimum Paid Up Capital. This Paid Up Capital has to be deposited in the Company’s Current Account ONLY AFTER Incorporation of the Company, so you do not need to have that amount ready before/while registering the Company.

  99. Hello

    I would like to know if there is any benefit for the firm if we register as pvt ltd, is there any added advantage? Currently its under sole proprietorship.
    Your reply would be really valuable.

    Thanks
    regards
    Nihal

    • Hi Nihal,

      Sorry for the delayed reply.

      Definitely there are many advantages in Registering a Private Limited Company.
      I can describe them as follows :

      1. The Private Limited Company has a legal existence seperate from it’s members/directors.

      2. From the business point of view, the Private Limited company will get more recognition and acceptance than a Proprietorship firm.

      3. A customer feels more comfortable as it creates a confidence among them since they deal with the legal entity. For the Company also it’s beneficial as it can negotiate with the Customer with more confidence. Private Limited Company can engage in bigger projects by doing association/Joint ventures with other businesses/Companies by making Contracts/agreements.
      Just as an example, if you are doing a Software freelancing, you may be getting some small projects but if you incorporate a company, the chances of getting bigger projects increases since you can bid for them as a Company, also the other party feels more comfortable dealing with you as it can make any legal contracts/agreements with you as a Company.

      4. From liability point of view, the most advantage of forming a company is that it has a limited liability. As a sole proprietor, the personal assets can be at risk in case of failure of a business. In case of Company, if it becomes insolvent/wind up, personal assets of directors and shareholders are not affected, all the debts will be cleared from the company’s assets.

      5. In a Proprietorship firm the individual has to arrange for the Capital from his own Pockets, but in case of a Private Limited Company, the burden of Capital arrangement gets divided (unless the Partners are from the same Family/Household) as different people bring in their own contribution thus it also reduces the risk/liability to the extent of the Share each member has brought in.

      6. The Company has a perpetual succession. Meaning even if the individual director retires/dies the Company still exists. i.e. could be run with other members/directors.

      7. The Income tax is directly charged on income of proprietor, and in case of company, the tax is charged on company’s profit and not on individual income of directors/ members.

      I would also like to note that many people think that there are few operational costs involved For the Private Limited Company e.g. Incorporation Fees, Consultant Fees, Other Registrations (Shop Act, PAN/TAN, Digital Signature, Importer Exporter Certificate (applicable, if any)), Maintaining Statutory record/annual filing with the Government.

      But after looking at the list of advantages in forming a Private Limited Company, i would say such costs are minimal & hence i may suggest to form a Private Limited Company.

      Best Regards,
      CS Meenal Abhyankar

  100. Thanks for your comment.
    Once all the documents are submitted to ROC, if no further query arises, it can be registered within 15-20 days.

    • Madam,
      If two NRI can form a private limited company, can AGM be held abroad in the country where NRI stay. If not, what is the solution if they can’t come down to India for AGM.

      • If two NRI are members of Private Limited company, they should be physically present in India at the time, day of AGM. There is no provision in the Companies Act, 1956 for holdign AGM abroad and there is no other solution. They have no option but to attend it physically.

        • thankyou mam

          please can you tell me where to get form 7b for transfer of shares

          • You may get the Hard copy of the Form 7B (Transfer of Shares) from the nearest Stock Exchange (particular state) which bears the stamp of presentation.

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