*** Updated as on 27th April, 2013 ***
Commonly asked questions related to Company Formation in India. The questions mostly relate to the Private Limited Company.
Things to consider while starting a business
Private Limited Formation Procedure
Check Proposed Company Name Availability
Q1. As an individual can I form/register a Private Limited company?
Ans: Yes, if you are a person of Indian origin or a NRI (Non-resident Indian) / PIO (Person of Indian Origin) /OCI (Overseas Citizenship of India), are eligible to form a Company in India. Also if you are a Foreign national/foreign company, you can also form a company. Note : To start a Private limited company minimum 2 directors are required.
Q2. In order to fulfill the requirements of minimum 2 Directors (in case of Private Limited Company), can i introduce my spouse/relative as my business partner?
Ans: Yes
Q3. I would like to start a Software services company. I do not have a big setup/office. Can I register such a Company?
Ans: Yes, you can register a Private limited company to start the business even if you do not have a big setup/office. After formation of a company you will have to obtain shop act licence, PAN and TAN in the name of the company.
Q4. What is a PAN & TAN
Ans: PAN : Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued by Income Tax Department. The PAN is mandatory for any Company. It is issued in the Name of the Company.
TAN : Every deductor is required to obtain a unique identification number called TAN (Tax Deduction Account Number) from Income Tax department. It is a ten digit alpha numeric number. This number has to be quoted by the deductor in every correspondence related to TDS (Tax Deducted at Source).
Q5. I would like to incorporate a Private Limited company. I have decided a name of the same but I do not have sufficient funds to complete the whole process. For the time being can i just register my company’s name & complete the remaining process after few months? Actually I am afraid that the name which I have planned may not be available after some time.
Ans: Yes initially you can just register your company’s name and within 60 days (i.e. from the date of receipt of the name approval letter from Registrar of Companies), you can proceed with further formalities.
Q6. I have an idea to start a Consulting firm (Private limited). Can i just register it now & start functioning after 1 or 2 years?
Ans: Yes, you can just register a Private limited company now and start functioning after 1 or 2 years. But as the company is registered under Companies Act,1956, you will need to comply with the provisions of the Companies Act. It means you have to get Balance sheet and Profit and Loss Account prepared from the Chartered Accountant and the 1st Annual General Meeting shall be held in the first financial year & the subsequent meetings for the next year
Q7. I would like to start a company in Pune but all my residential proofs belong to the state outside Maharashtra. To start with, I am planning for a Small office/house on a rental basis. Would the rental agreement suffice for registration?
Ans: If you want to start a company in Pune, the address of the company should belong to Pune only and not of the place situated outside Maharashtra. In your case, initially you can show your rental office/home as a registered address of the company & for that the rental agreement is sufficient as an address proof.
Q8. How much duration it takes to form a Private limited company?
Ans: Under normal circumstances, once all the relevant documents are submitted with respective Registrar of Companies (RoC), a company can start it’s operations within 20/25 days. In case there are any rejections(with respect to name etc.) or other queries raised by RoC, then it may get delayed.
Q9. What is minimum and maximum number of directors a company can have?
Ans: In case of Public company, minimum directors are three and in case of Private limited company it is two. Maximum Directors in case of public is twelve and in case of Private limited company, is prescribed by Articles of Association.
Q10. Can I start a business immediately after submission of all the documents with Registrar of companies?
Ans: No. One can start the business operations only after receipt of certificate of incorporation in case of a Private limited company and only after receipt of certificate of commencement of business in case of a Public company.
Q11. How much Government (Statutory) fees do i need to pay in order to form a Private limited company?
Ans: In case of Private limited company or Public company, the government fee is based upon the Authorized / Nominal Capital of the company and the fee structure is provided by the government on http://www.mca.gov.in. Refer to the Fee Calculator
Q12. Can i introduce a foreign national as a Director ? What are the legal aspects involved/documents required?
Ans: Yes, a foreign national can become a Director of any company registered in India provided he/she has to apply for Director Identification Number from the Government of India.
Q13. Should NRI (Non Resident Indian) have a Digital Signature or should use Indian resident for Digital signature?
Ans: NRI can apply for Digital Signature Certificate.
Q14. I would like to form a company with some specific name which I have already decided. How can I check if that name is available or not ? What are the RoC norms for the possible names?
Ans: Before making application to Registrar of Companies (RoC), an applicant can check for the proposed Name availability on the MCA Website Check Name Availability. One can also check if the proposed name doesn’t conflict with the already registered trademark on the http://ipindia.nic.in Website Check Trademark.
Q15. I would like to dissolve/wind up, my Private limited company, what are the different options available?
Ans: You may opt for one of the following options
(1) Winding up by the court
(2) Voluntary winding up
i. Members – Voluntary winding up
ii.Creditors – Voluntary winding up.
(3) Winding up subject to supervision of the court
(4) Fast Track Exit Mode (Check MCA Website for more details)
Q16. I reside outside Pune/Maharashtra/India , can i opt your services ?
Ans: Surely you can. Since all the MCA/RoC procedures are online, you can send all the documents through Internet. The Confidentiality of all the documents (physical as well as in electronic format) is assured.
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Got any more Questions? Just ask & will reply on a case basis…
Comments are most welcome!!
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Legal Disclaimer:
I have a LLP company. during incorporation, the franking date was set after the registration date due to which the same is rejected by ROC. kindly suggest corrective measures.
Please submit the LLP agreement fresh, after doing franking.
Hi Ma’am,
We are a call centre, and i wanted to know if there can be any designation between chairman and ceo. someone who is above ceo but below chairman?
I really need an insight in this matter. and your advice will really give us that line of sight.
thank you,
regards,
Abhimanyu.
In Company law, there is no specific organisational hierarchy. You may decide the position as per role of that person in your company.
Dear Ma’am
Our company had two subscriber to memorandum agreeing to take 9999 and 1 share respectively.
But we received all funds from one shareholder and allotted all shares to it. subsequently one share was transferred to second subscriber.
Now the bank has raised a query that all shares has to be allotted to both subscribers at the first allotment.
Please help
The company has two subscribers, the first allotment shall be made to two subscribers. Then after making entry of members in the Register of Member, the company shall file form MGT-6 with register of companies for beneficial interest. Now after reading your query please submit revise board resolution.
Hi mam we are floating a section 8 company and got the name approval for the same. While applying for RD 01 iam supposed to attach INC 12, which i was said to fill the form manually.since iam unable to use the prefill button in the form inc12 plz do let me know the procedure to file RD 01 along with the respective attachments.
Please fill up the details physically in form INC-12 and attach to form RD 01
Hi mam,
What procedure is involved for conversion of Partnership Firm into Company as per New Act? As per section 366 the form URC-1 is there but it is tedious job.
If New Co. take over this Firm then what will be the effect on VAT, S. Tax registration? Can we contu. the same registration no. for the Company also?
Regards,
Rashmi
Partnership firm can be converted into Pvt. ltd by submitting INC-1, INC-7, DIR-12 and INC-22 with ROC. I don’t think VAT S.TAx registration number will remain the same.
madam very informative articles. thank you
can same set of directors start different private limited companies.
Thanks for your comment. yes, same directors can start different private limited companies
Hello mam,
I want to start my two businesses:
1st is based on commission provided by companies on diverting the traffic to their websites on making purchase at their. Is it necessary to register a company for this type of job and if required then which is the right way for doing so?
And 2nd is all about E-Commerce website. So what I’ve to do? And which type of company should I register for starting an E-Commerce Business? Mam, please give a guidance.
Thanks mam in advance.
If only one person is involved then you can form One Person company (OPC) Pvt. Ltd company (minimum requirement is :- one member, one director and Rs. 1 lakh capital). Based upon your business and investment you can select the type of business to be established. For more details please call me.
Hey, Great FAQ answers, it solved some of my doubts! Thanks
I am an engineering undergrad and I have recently started a small healthy food startup, with no partners and I haven’t registered or obtained food licence yet. I am operating from home and hence no office address either.
I was advised by many to get these things as the business progresses.
I’m in talks with a couple of people who are interested to fund my venture (most probably in exchange of company shares),
I want to register now. I have not much capital nor many team members, but business has started significantly well.
What should I do now (since I have started without obtaining license)? And what type of registration should I go for- sole proprietorship or One Person Company or what? License first or registration first?
It’ll be great if you could help!
Whether to go for proprietorship firm or OPC all will depend upon amount of initial investment. In case of proprietorship firm, there is no capital restriction, but in case of OPC, minimum capital required after incorporation is Rs. 1 lakh.
Hence please think and then decide
Me. Meenal I would like to open a LLP with 80 partners
the objective is
investing in stock market..
I need to know
is it possible to start a LLP for only investment in stock market.
In LLP there is no concept as shares. The partners invest into capital of LLP. Therefore I think, for stock market investment, please form Public Ltd.
Dear mam
I have wholesale drug selling licence with the name of trio pharma I am manufacturing goods on this licence name .on all purchase and sale bill i am using same name I have TAN no also. but I want to register a pharmaceutical company with other name and promote my product what is the procedure for that
You have option to register either proprietorship firm or partnership firm or Limited liability partnersh firm or if the company’s investment will be big, you can register private limited company. So depending upon the nature of activity, the amount of capital and number of people to set up company, you can decide.
Hello Mam,
After incorporation of private limited company, share capital money ( Rs, 1 lakh)deposited in bank account can be utilised for regular expenditure of company or any provisions in companies act 2013 for investment of share capital money ?
There is no separate provision in Companies Act 2013 for investment of share capital money. The shareholders can use share application money for regular expenditure of company.
Dear Madam,
I have a company (Pvt. Limited) registered 1 month back.
I want to know the procedure to convert this company to a subsidiary of an US based company.
Could you please get back with the procedure/steps to do so.
Thanks,
Shankar.
To make subsidiary of US based company, the existing shareholders will transfer shares to US based company. Hence there will be transfer of shares from resident to non resident and Provision of company law as well as Foreign Exchange Management Act to be complied with.
Hi Ma’am,
I have tried to register a comany name however the one we wanted did not get selected and the name we had given dsnt exist anywhere so we dont know why it didnt get selected, so what can we do to get the name we want selected by roc. i am frm west bengal… ur advise will be needed. thank u
For name application, you need to check name availability on MCA site. If the name is available or it does no exist anywhere you can apply for name registration.
Hi Maam,
I am planning to start a Trust for a social cause. Please can you provide me the detailed procedure to form a Trust under Companies Act, 2013.
Regards,
Madhu
Please refer Section 8 of New Companies Act 2013 to register Non Profit company and Incorporation Rules, an applicant is required to file DIR-3 for two directors, INC-1 ( name application), RD-1( application to Regional Director for issue of licence), Inc-7 ( incorporation), DIR-12 ( appointment of first directors) and INC-22( Location of registered address of company).
Please Can You Guide me Regarding Procedure .
I want To Start My Own Company .
Please call me.
Dear Madam,
I have a query about my LLP formation which I have already applied for. This application is getting rejected (5times) and coming for resubmission at the stage of Name and Object approval. The basic object of my LLP would be to Pool money from around 50 partners and trade in stock markets to earn profit out of it. But this is getting rejected for the reason mentioned in last rejection notice is “[Moderated] Holdings Ltd already exists and also LLP cannot have ‘holdings’ as part of the name as it is indicative of the NBFC and LLP are barred from doing such business and also the objects require the in principle approval of the concerned regulatory authorities (check Col 7).” The name given previously was [Moderated] Holdings LLP. Also names like [Moderated] Shares LLP, [Moderated] Stocks LLP, [Moderated] Capital LLP have all got rejected. Kindly guide me how to proceed with this. We dont have any intention of raising funds through any other means except through partner contribution.
Regards,
Raghupathi Bhat
I would advise to approach registrar of companies where you have filed name application.
Thanks for you time madam, I really appreciate it.
Thanks
HELLO MAM
i am from u.p. and i want to start my retail shop for mens wear and also incense.(agarbatti ) manufacturing in small scale and want to sell via my own brands name ..could u plz tell me the procedure for registration and what step should i take first bcz i m not aware of government laws .
thank you
You may apply for proprietorship firm. In Maharashtra state, shop act licence will be required for proprietorship firm,please check in UP what will be needed.
Hi First of all thanks for providing valuable information.
I have a question – planning to start a online business operation as seller in bangalore. The product i might import from china or get it in whole sale locally and will be sold at a online market place like Flipkart, ebay etc. The Business i want to start in a partnership basis.
Q1 – What kind of company i need to register? is it LLP?
Q2 – List of licences i need to procure.
Q3 – do you provide end to end service in procuring the above listed Q1 & Q2.
Appreciate your help here.
Thanks
Kiran
yes you can choose to apply for LLP because it is legal entity.
Hi,
Please tell me the legal procedure for opening a acting school
you may apply for proprietorship firm or partnership firm and depending upon amount of capital, you may choose for LLP or Private ltd.
is “Registration of companies” and “incorporation of company” same term
yes
Hi Madam,
we had a partnership firm and my partner wants to quit my question is can i change partner and company name with same TIN no and PAN no of our existing Firm.
Yes