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 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.

If this article has helped you in any way, i would appreciate if you could share/like it or leave a comment. Thank you for visiting my blog.

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.

1,161 thoughts on “Procedure of Company Formation (Private Limited Company), in India.

  1. Good article. Most helpful for someone like me who is not an accounting professional but interested to know about registering private limited company. Thanks

  2. Hello,

    I need to know whether obtaining FSSAI license is mandatory for a food manufacturer before opening a company or it can be obtained after opening the said company?

  3. Hii Madam,

    Already we have incorporated Private Limited Company(Badavath Export & Import Pvt Limited). Please guide me on the following:

    Increase of authorised Capital : For this SH-7 everything was ready. Let me know the procedure to file SH-7 I.E, Do we need to give Notice of the same to ROC in 30days advance?

    At present Two directors were there and now a foreigner want to invest and he want 49% share for this do we need to make changes in MOA. If not what to do?

    ThankYou Madam.

    • File SH-7 for increase of nominal capital with ROC within 30 days of holding of general meeting. If foreign subscriber wants to invest more money then after increase of nominal capital, and remittance of application money from foreign subscriber, allot shares to him and report to RBI within 30 days about advance remittance and file FCGPR after issue of share certificate to foreign subscriber. No need to amend MOA page.

  4. I am a type of person who used to explore knowledge, I found it’s article full of knowledge and useful to the people, who are looking for New company registration in India

  5. Great information regarding registration and find your blog much valuable and useful to my work.

    Thank you for sharing

  6. we are 4 partners and want to start five business 1) Call Center 2) Attendance services 3 on line home decor Business 4) Building Material Trading 5)Bar and Cafe with name “360 SMARTECH”

  7. I wish to register a pvt. ltd. company. As per your article steps Can I register myself or do I need any service provider to do it for me and how much the approximate cost for 2Dir, 2 shareholder, 1lac capital , bangalore location.

  8. The article is helpful and the steps are beneficial for us.Thankyou for sharing with us.

  9. hello madem,

    how to prepare MOA & AOA. do you have any format format.for preparing MOA&AOA with little changes to that format.
    i am CA article student
    please help me in this regard

  10. Dear

    I already open pravate limited company.

    Now I want add other buiness same company is it possible

  11. Hello madem,
    I want to start my own business. I have to register new company, please guide me for the same( Registration charges, fees, etc)

  12. Mam, its really a great job.
    very informative

Leave a Reply

Your email address will not be published. Required fields are marked *