*** Updated as on 27th April, 2013 ***
Commonly asked questions related to Company Formation in India. The questions mostly relate to the Private Limited Company.
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?
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.
Got any more Questions? Just ask & will reply on a case basis…
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