*** 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:
Hi….thanks for such an informative blog…wanted to ask whether a person who already has a DIN & now wants to incorporate a new pvt. ltd Company…. so can he proceed with name availability application without applying for fresh DIN and without the DIN of other proposed director. In other words can 1 person with an already existing DIN can alone apply for name availability application?
A person having approved DIN can proceed with name application without applying for fresh DIN. But for registration process, minimum two DIN of individuals are required. One person cannot alone apply for name availability application.
Hello Mam,
Since ROC has rejected my company’s name, when should I resubmit my new revised name using the same e-form? Is there any stipulated time duration only after which I need to re-apply? Or shall I resubmit immediately?
Kindly help me.. Thanks in advance.
If ROC has asked to resubmit the same e -form online with revised name, you have to log in on http://www.mca.gov.in. and choose option- eforms
Regarding duration of re submission, you have to resubmit the same form within the stipulated time alloted to you by the Government.
Thank you Mam
Hello Madam,
thanks for this it really helps !
Mam I want to register a software company in Madhya Pradesh.Do I need some minimum number of employees to register a company?
To register company needs minimum 2 directors and 2 shareholders and not employees.
Madam, i want to start pharma as a distributor in karnataka in low budget, and what are the necessery requirements and documenets should i have to follow
Thanks & Regards
Murigeppa J
Besides obtaining certificate of registration as private limited company, you may need FDA licence ( i.e. Food and Drug Administration Act) to engage in pharma
Can I form a company offering services in 4 specialized areas (eg. software, hospitality, logistics and real estate) or do I need to create individual companies from legal perspective? I have got a 2bhk apartment in Kochi. Is it legally permitted to register a company at an apartment within a building society? Thank you
You will have to register four companies separately because the main object of the four such companies is different. You can register company in apartment only you have to submit proof of ownership to the ROC.
Hello mam..
for opening a online shopping website,do we require to register the company..
You may register proprietorship firm, if you would like to open a online shopping website, instead of registering company.
Dear Madam,
I am an NRI, I would like to register my private limited company in chennai as myself and my wife are its directors. As we bothe are living abroad, what are the procedures to register. Kindly explain step by step and required documents.
Please visit my blog- “Step by step procedure of incorporation of Private Limited company”
Hi mam,
I’m planning to start a separate venture and I wish to use the land property which is owned by my father who’s already running a company. Is there any rule to compulsorily pay some rent for this property even though it belongs to my father? And should I need to enter into any rental agreement with them which would be required for company’s registration and all?
FYI: My father will become one of the directors for my new venture.. Kindly clarify on this. Thanks in advance…
If you wish to use the land property as address of proposed company, where the place is owned by your father, please submit proof of ownership- Index II, Electricity /water tax bill of property and obtain no permission from your father. It would be advisable if you can enter into a lease agreement between company and your father after company’s registration and then company can pay office rent to your father.
Thank you so much Mam!
Hi Madam ,
I like to start business for networking product it will be for both sales and service calls . Now at startup i will use my residence address as my business address . can i do this also please guide me what are all the initial registration required its propetrship
Please call me.
Very good blog.
Can we open / register another company on same address in maharashtra or Karnataka?
Thanks in advance.
You can register another company on same address in that case you need to submit address proof and no objection letter from an owner of place.
Hello Mam,
I want to start a software firm in Nagpur. We are two friends but didn’t have to much money. should we start first as a Proprietory firm and after 2 years should we transfer this to Pvt. Ltd.
For the proprietory firm registration whats document required. How much amount it takes to complete all Process.
We didnt have own Shop / Property, but still wants to start a firm (Proprietry).
If we registered proprietry firm, and if we got more than 3 clients just like other companies. Is that any problem to get the client and support to client. Is that any problem occoured while generation purchase orders and Payment collection from client.
Waiting for your valuable reply.
Thanks
Pavan
Yes you can start with propreitorship firm initially where there will be one person who will be treated as proprietor. later on you can convert this into Private limited company. You will get more acceptance if the business is registered as private limited company rather than firm.
Hi,
The site seems good enough for beginners who want to know about starting a company. I wante to document on the procedures on starting a company by an individual. This is an individual..not partnership as in private ltd company. Could you help?
Do you mean to start a proprietorship firm. Please call me.
hello,madam
my name is pritesh.
I am having some questions….(plz may i get those answers..)
1-basically i am going to make film production house,with my team.so what to do for it..? how can i do?
2- register my film company, then how much time it takes?for registration
4-After a registration if i want to listing my company share then how can i do???in this share market thing can you help me?
5-is it have any type of share that i listed in rs.100pr share.and after 6 month all those share i purchase it back with fixe amount at Rs.150pr share??
thank you,
pritesh
plz replies only on my mail id..
Sorry for the delayed reply. To register your film company, you will be required to register as Private Limited company with equity shares. To start it you have to invest minimum Rs. 1 Lakh. To know more details please call me.
Hi!Thanks for most of the information.
On Q6,This means it is possible to incorporate a company after tentatively in 4-6 months after Name Registration of company or one have show Annual meetings and Balance sheets for respective for the delayed years?
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Once the company is formed under the Companies Act 1956, it has to comply with various provisions specified in the Act. After incorporation, it should hold one Annual General meeting every year to consider and adopt Balance sheet and Profit and loss account. Hence for delayed years as well, the company should comply the annual filing provisions.
Hi, I am looking to start a small business in software sector.
I would like to know more about proprietor firm.
Please assist me..
Please call me
Very Informative And Elaborated Information:
Thank You!
My question is on Q5 and Q6 above-
Suppose I registered company name,and as per Q6 above I need to start functioning after 1 or 2 years:Should I need following-
a.MoA and AoA
b.Company/Organizational Structure-Means can I start with Two Directors and Two Shareholders only?
1-Can I obtain DIN,DSC first and later on some period the Name Of Company?
2-If 60 days limit exceeds,you said to file application again.Is that Company registration application or FORM1 application?What exactly?
3-Can you say more on Individual Company Registration amendment and possibly when government will apply it in India?
4-My overall question will be like this-
Can I keep my company name reserved or booked till the Incorporation of company without being lost its rights i.e.Name Protection.
5-If possible,could you please add some Topics like Trademark registration,Product Registration and IPR(Intellectual Property Rights)
Thank You!
For all your questions the answer will be – once the name is approved from ROC, it is valid for 60 days i.e. you can register the company on or before 60 days from the date of receipt of name approval letter from the ROC.
I want to register a software company working in pune but i want to register it in my native place which is narayangaon, tal- junnar, dist- pune. then please tell me the procedure for the same. as i came to knew that shop act card is required and will get only if company is in urban or semi-urban area (under Nagarpalika area). is it correct?
Yes if you would like to register proprietorship firm, you need shop act licence and it is within Municipal limits, you need shop act and outside municipal area, you need Gram Panchayat licence.
We had set up a company with an authorised capital of 10 Lakhs and 1 Lakh shares.
We wanted to initially start off with 1 lakh Paid up capital for 10K shares but in the articles submitted to MCA we have already distributed 1 lakh shares between the three directors,
Question 1 is it necessary to pay up the complete 10 lakhs at this time only ? Question 2.How can we get the articles modified to show a fewer number of shares were subscribed too?
Your question is not clear. Please call me.
Hi, for making pvt ltd company in INDIA with Nigerians as directors, is it necessary that their docs such as passport, photo and affidavits for DIN should be attested by notary in their home town or Indian embassy in their hometown and if it is not possible to get it done, is their any other alternative.
In case, the director is residing outside India, then the attached supporting documents should be attested by the Consulate of the Indian Embassy, Foreign public notary.
This is the information we have been looking for. One of my client have the intention to invest in India. We will contact you soon if my client decide to perform the investment. Thanks!
Thanks!!
I want to open my new private company. so I want to registered my company.where I can registered my company and what is the cost of registration.
Please call me.
Hello Madam, We are looking to register an online fashion Jewelry, we are currently in US for a short term assignment – would like to initiate the process to register the name we have chosen and would like to obtain export & Import license.
Can you guide us in term of what we should do to get the name registered, license obtained.
Thanks for your suggestion.
Saravanan
Please call me.
I as a director of an Indian pvt limited company want to make my residential house as the “registered office” of the company.
Ques:- Will then my residential property be treated as company’s property or it will still remain the director’s personal property ?
The property would always remain as personal property of the director. The director just gives the No objection or permission to use said property or premises to the company for business purpose.
I want to start a new business so please guide me about the registration
Please call me. Thanks.
Meenal, Very Informative and useful blog for the upcoming entrepreneurs, Thanks for all your post, which provided me very useful information in dealing with ROC.
I have quick question, my company name was approved and later i have submitted form1,18,32. Now ROC rejected the name
Now i am going to file different name through Non-STP mode and submit the documents, but my question is, what is the refund in this case, Please help me in providing what are refundable and non refundable fee if the name is rejected.
Thanks!
Thanks for your comment. Regarding the question of refund, once the form is filed with the Ministry of Government, the amount paid won’t be refundable. The Government is the final authority to decide which name is to be approved or rejected.
Which document to be checked for the details of registered 1) Current shareholders 2) Current Directors for pvt limited company and unlisted public limited company.
You can get information of current shareholders and directors of private and public (unlisted) company on Form 20 B ( Annual Return).
hello madam,
i am chandan from bangalore, i wanted to open a company that provide computer componets sales and services to small scale industries and i want to register it but m confused about the registration types. which type of registration is suitable for me a firm or pvt., ltd., ??.
please help me
Please call me.
I want to start my own company(consultancy) for providing manpower in BPO and Non Bpo sectors kindly suggest how to register a company with minimum investment and i either want to work alone or want to add my family member as director. kindly suggest me the easy steps for the same.
Please call me.
Hi Meenal,
Whether public notice is needed for incorporating a section 25 company ?
Answers in this post are really helpful.
Thanks.
Public notice for incorporating a Section 25 company is not required as per Companies Act 1956.
hello mam, i want to start a software development company, is there a requirement for minimum authorized capital?
Yes for starting of private Limited company, the minimum Authorised capital should be Rs. 1 Lakh.
Hi
Me and my friend wanted to register pvt.ltd after pvt.ltd on my names can we people eligible govt jobs/ pvt jobs in any other comapnies
Yes you can be eligible for Govt/private jobs in any other companies.
I WANT TO START BUSINESS REGARDING PROVIDING PROJECTS TO STUDENTS AND INDUSTRIES SO I WANT TO REGISTER PVT.LTD. IS IT ANY PROBLEM IN FUTURE JOBS IN PRIVATE SECTOR AND PUBLIC SECTOR
You can register private limited company with the main object of providing projects to students and industries. There won’t be problem as far as compliance is concerned.
Hi all,
I registered a firm but I want to convert that into a pvt.ltd what exactly makes difference between just a firm and pvt.ltd?
Can someone answer this?
Your answer would be appreciatable.
Thank you.
Please call me.
I want to open a small company for manufacturing. It will be single owner company. Please guide me for the following questions..
1. Can I open a company with any Name(single owner)?
2. How can I register my name for CST / VAT Billing?
3. How can I open a account in a Bank whether in my name or Company name? What are the documents required?
4. I should get PAN card in my name?
5. What are the other registrations required?
6. How do I do Exports?
Please advice.
1. Yes you can open company with any name provided the name shall not be similar to existing registered name ( please refer name guidelines prescribed by Ministry of Corporate Affairs).
2. After registration of company, you can register for CST/ VAT
3. While opening of Bank account you may need shop act licene ( if it is to be registered in Maharashtra state) , PAN , TAN of company.
4. you can get PAN card in the name of company by filing form with Income Tax Department.
5. You can do export if the same activity is one of the main objects of your company. For more details please call me.
hello sir/medam i would like to kw i like to buy name of the company who is wind up and i really wanna buy that company name . and if i register new company than they gonna so me my registion date ..
I am not clear about your requirement. Please call me.
I want to start an IT company, which would make mobile apps and websites from my ideas, (like Facebook, Zomato, games, utility apps, etc) and sometimes take up client work for money, in times when we aren’t generating revenue from apps and websites of my ideas.
How should i register my company? As both a product and services company? What would be the tax ramifications? Will I be liable for service tax every year even if I don’t actually take up any client work?
Also, can I start the company in my parent’s home or my friend’s home? We don’t have a lot of money to pay rent for office space.
Sorry for the delayed reply. You can register company having business of development of product and providing services. Being service provider the company will be eligible to get service tax registration number, but the company will become liable only when its income exceeds Rs. 10 lakh during the financial year. You can start company in your parent’s home. For further details you may call me.
Hi, I am an OCI (Overseas Citizen of India) and a Canadian citizen. I have family, relatives and bank account also in India. Now I am am being offered a 20% shareholding in a Private Limited company which has 3 existing shareholders/directors. I will inject cash/capital of INR 2.5 lakhs for now. I would like to know, what are the requirements in relation to approval and/or documents to be provided to achieve a smooth and valid stake of 25% in the private limited company, taken from India point of view and Canada pont of view.
I woudl appreciate a response to my email id konepra@yahoo.com
Thank You
Prakash
Please call me.
First of all I would like to say thanks for such a helpful & informative blog.
Mam, I would like to ask one query regarding company formation.
In last FY Mr.X was in dubai n his status was NRI. In this this year on 7 july he came back to India.Now during company formation hows his residential status will be considered.
Plz reply…thanks….
Since Mr. X is NRI and came to Indian on 7th July, as per Income tax Act, if he stays in India for more than 182 days then his status will be resident in India. In your case if he came back to India for company formation, currently his status will be NRI.
i want to get PAN No for my unregistered individual software company can i get it?
If it is unregistered individual software company then your PAN will be required.
I m krish, a B.Tech student from Kerala and me along with my friends thought of starting up a software firm . i want to register our company and read your blog about it . First and foremost thank you . I learned a lot from there .
Question 1
Should we register our company under ” private limited company” or is there any other choice ? i asked you this because it says , we need 2 directors(we have ) and 2 shareholders(we don’t) with minimum share capital of one lakh each !!! . we don’t have that kind of money now !!
Questiion 2
I really want all my friends(Five , including me ) to be in the Board of Directors , But none of them would agree to it .They want me to be the director alone and i told them a minimum of two is required , i had a hard time convincing one and she finally agreed . Now i want the the other three to be in B.O.D too. Is there any way i can add them too without their knowledge/consent.
Question 3
Is there any tax deduction if our B.O.D are all females [ All of us are 22 / 23 years old ]
Answer to your question 1 :- Yes, you can register your business as Private Ltd. Minimum requirement is two directors with Rs.1 Lakh authorised and paid up capital.
Answer to question 2:- You can apply for registration of company with more than 2 directors. You can also add another director after incorporation as well after complying registrar of companies formalites.
Answer to question 3:- The companies Act does not provide any special provision for females, will have to check tax provisions separately.
Can a person working in private limited in India (MNC) register a compnay in his name?
It all depends on the existing Company Policy / NDA ( Non Disclosure agreement) since many companies do not permit to engage in any other business simultaneously when in service, since it may create conflict of interest.
Hi,
As you said the an Employee who is working cannot be one of the partners in the Partnership firm as per the companies policy(conflict of interest).
We have recently registered a company under Partnership. My husband is a Second partner for this and is working in an MNC. Request you to let me know if this can be withdrawn within a month’s time of registering this Partnership deed.
Will there be a problem if he continues to be a sleeping partner.
Please suggest.
If your husband is working partner in registered company, you may change his designation from working partner to sleeping partner. If it is a Private Limited company from Executive director to Non Executive director, in case of LLP, from designated partner to partner.
What business license is needed to run online grocery retail store ? I will buy from wholesale dealer and sell it to customers, i will be using my house for storing the items temporary, are there any restrictions in doing this? Are procedures to get a business license seperate from registering a company or can it be done together ? Thanks Meenal.
Getting business licence is different from registering company. For registration of company it will require minimum two directors, capital Rs. 1 Lakh.
helllo sir i want to start a new computer courses ,training center , in bangalore , and want to esatblish or sell branches in some of the towns in india , it includes online training to other countries students who . (like u.s , singapore and) from our software
training center , we are two . partners ,. .
please suggest which type of company i shall preper please advice sir ,
thanking you in advance .
If you are providing training to students, for giving name to your training center, you can register LLP with minimum capital.
Hi,
Id like to know the following:
What are the advantages of having a Pvt Ltd company over proprietorship-taxes and liability issues?
Can I start as a proprietor and then add a director to convert or upgrade to Pvt Ltd or do i have to establish an all new entity?
At what stage do we have to show or deposit paid up capital of 1 lakh while registering a Pvt Ltd company?
I have stayed outside india for about two years now,to form a pvt ltd company what problem will i face to be 1 of the directors for eg i may not have a utility bill to show residence proof as that will be in my fathers name?
Thanks.
Private Limited company has separate legal entity. The liability is limited in case of Pvt. and proprietor’s liability will be unlimited. Yes you can start initially firm and convert into Pvt. ltd. You have to show 1 lakh while registering Pvt Limited and deposit after incorporation. For registration of Company, you have to submit registered address proof.
My brother is in Mumbai would like to open a manufacuring unit in Mumbai, since he does not have any proof there and can not support any document to open a company there. In that case Can I open a firm in hyderabad and run a unit in mumbai, if so, what are the formalities I will hv to go for? Pls help!
yes you can open a firm in Hyderabad and run business in Mumbai. Please check whether you need Shop act licence in Hyderabad State for registration of propreitorship firm or not? You will need to open Bank account in the name of firm.
HI,
My friend who is a french national and I an Indian citizen would like to start a E com website . We would like to register our company in Bangalore .I would like to knoe the following
1. By registering in bangalore can we do business across the country ?
2. Can a foreign national be a partner in an indian start up
3.Do we form a partnership firm at first or do we go for a private Ltd company ?
4.What are the formalities for the same
My friend is residing in India currently on an employment visa of 1 year .She plans to quit her job inorder to be a part of this start up.
Thank you
4
yes, you can do business across the country by registering company in Bangalore. Yes Foreign national can be a partner in Indian Start up. You can go for Pvt. ltd registration directly. Please refer my blog for more details.
can you please tell me what is the minimum qualification is required for opening a pvt company.
For opening a Private Company, there is no requirement of any specific or minimum qualification.
Me and my friend wants to open a Pvt. Ltd. company to run a tech support business for foreign clients. Is there any difference in registering the company . What all certificate (e.g. D.O.T ) we need to take .. Please advice.
Sorry for the delayed reply.
A Private Limited Company is registered with the MCA/RoC. I am not clear about your question regarding difference in registering the company. Please call me.
I want to incorporate new pvt ltd. co. I obtained name in Form 1A. now for form 18 I require to address proof. can i prepare rental agreement in name of proposed company. who will sign the document form co side since form 32 also yet to be filed.
kindly provide me a sample deed in a proposed co name
Instead of rental agreement in the name of proposed company, please attach electricity bill/ telephone bill / tax bill of the place of owner. Normally the ROC ask any one of these proofs.
Dear Meenal,
I am an NRI and residing in Dubai. I need to register a private limited company in India in Bhubaneswar at the earliest. I want to add my wife as second director.
My quarry is, whether the affidavit for company incorporation can be done in Indian Embassy in Dudai instead of going and doing it before Executive Magistrate in India?
Actually my wife is not in a position to go to India in this few months. So, if it can not be done in Dubai, I need to look for any other partner to name as Director.
Waiting for your kind and sincere reply.
Kind regards,
Sanjay Patra
Dubai
Being NRI, all supporting documents shall be attested by an Indian Consulate of Home country.
My client is running into heavy losses and wants to close their company. It is a private limited company , can you please elaborate the “Dissolution- Members voluntary winding up” or whichever way you seem fruitful. Someone has suggested them to issue capital first to cover losses and then close company, but I am not convince with this method. Kindly guide
please call me. Your question needs to be discussed.
Dear Meenal,
I am an NRI and residing in Dubai. I want to register a company in India in Bhubaneswar at the earliest. I want to add my wife as 2nd director.
My concern is, whether the affidavit can be done in Indian Embassy in Dubai instead of going to India and executing before Executive Magistrate? Actually my wife is not in a position to go to india within this few months.
Kindly advise me as otherwise I need to see for another 2nd director, who can be present in India.
Waiting for your kind and sincere reply.
Thanks and regards.
Sanjay Patra
Dubai
Yes, your wife can arrange to affidavit to be notarised from an Indian Embassy in Dubai instead of visiting India.
thank you for creating this blog. It is really very informative.
Respected Madam,
This is a very informative article and helps in detail in regards to various questions that many would have.
I just had a very simple question. As an individual in India, can somebody own a business and also work for an organization as an employee.
The reason I am asking this is because I knew that one PAN Number is only associated with one income source. So can the same person own a business? Is it allowed?
Thanks and Regards
Sambit Patnaik
Being an employee of one organisation, you need to check your company policy, terms and condition. If the company policy does not allow you to do business, you can invest in the business by forming company in the name of your relative.
Hi, I have a question regarding digitally signing the DIN-1 form. MCA’s site FAQs on Revised DIN Process (w.e.f. 27 March’11) states that DIN-1 can be digitally signed by applicant. Please read Question 6 of link http://www.mca.gov.in/MCA21/dca/din/DIN1-4_faq1.html But, when i downloaded the DIN-1 form the category field is mandatory and does not have applicant in the dropdown. Also, when i research on internet and on this forum everyone is pointing out that only CA and others in same profession can digitally sign the DIN-1 form. Can someone please clarify this ambiguity for me? Thanks.
As per recent amendment of DIN Rules, DIN 1 application must be certified by professional like CS/ CA/CWA ( who are in Whole Time Practice), the field of an applicant in drop down option has been removed.
Hi,
I have a question regarding digitally signing the DIN-1 form. MCA’s site FAQs on Revised DIN Process (w.e.f. 27 March’11) states that DIN-1 can be digitally signed by applicant. Please read Question 6 of link http://www.mca.gov.in/MCA21/dca/din/DIN1-4_faq1.html
But, when i downloaded the DIN-1 form the category field is mandatory and does not have applicant in the dropdown. Also, when i research on internet and on this forum everyone is pointing out that only CA and others in same profession can digitally sign the DIN-1 form. Can someone please clarify this ambiguity for me?
Thanks.
As per amendment in DIN Rules, only CS/CA/CWA who are in whole time practice shall sign DIN 1 form digitally and not by an applicant.
we 3 want to open 1 company of very small carpet cleanig company is it nessery to register?if yes tell me procedure
Please call me.
whether bank account is necessary for incorporation of company in india?
Yes opening of Current account in the name of company is required after incorporation of company. The subscriber shall be required to deposit their subscription money in the bank account and all daily billing or payment would be made through bank. As per the provisions of the Companies Act, if the subscribers fail to deposit subscription amount the company shall be treated as “Default” company from Government point of view and the main intention of formation of Private Limited company will not serve any purpose.
I am going to start a business like data entry services. For that services company registration is mandatory or not…… if it not mandatory wt will do
Whether to form a company with the object of data entry services, would also depend upon how many people will be involved and initial capital investment. If it is to be run by single person, then sole proprietorship will be option, if with two partners, either LLP/ Private Limited company will be option.
Great info and knowledge shared by you.
i have a friend who is a US citizen who want to invest in india to start a pvt ltd company. what will be the procedure and can he send money to my personal account for the initial expenses.
Thanks in advance
Vijay
Couple of question needs to be discussed, please call me.
Hi. Thank you for your helpful blog.
If I have power of attorney from all shareholders that fully authorized me to register a Pvt Ltd firm in free trade zone, in this case can I come to India and through a law firm services register our company without presence of other shareholders in India. Please advise.
Yes, being Power of Attorney holder, you can register company with the help of legal consultant.
is it mendatory to register DIN,company name etc for a distributor type businessman??
DIN shall be registered if any individual would like to be director of company and company name shall be required when someone would like to form it.
Hi Meenal, what is the criteria to open a new bank account for a new private limited company in india? Thank you for such an informative blog.
I have already replied to one similar question under FAQ’s.
You may refer to http://blog.abhyankarcs.com/company-formation-in-india/questions-procedure-company-registration-in-india-faqs/#comment-1663
One more qn, can i open an inc company( i mean a word INC after the name of the company) in india ? Thanks.
You cannot register INC company in India as per Name Guidelines of MCA 21. Every company which is to be registered in India should end with either Pvt. ltd or Ltd ( in case of Public company).
Hi Meenal, is the DIN necessary for application of incorporation of company ?
Yes DIN for director is necessary for incorporation of company.
Meenal, excellent blog. A quick question, what are the different compliance to be made by a NRI promoter under companies act 1956? Thanks in advance.
NRI (promoter) if he is shareholder ,shall remit/ deposit his subscription money in the Current account of the company. The Company shall make allotment of shares to him within 180 days from the date of remittance. The company shall comply FDI Policy formalities.
Nice Blog. Could you please tell me what are the annual filings of private limited companies to roc ?
Once in a year, every private limited company shall be required to file Form 23AC ( Balance sheet) 23ACA( Profit and Loss account) and Form 20B ( Annual Return) with the Registrar of Companies. Form 23AC and 23ACA shall be filed within 30 days from the date of AGM and form 20B within 60 days from the date of AGM. These are annual filings of Pvt. ltd to Registrar of Companies.
Can a private ltd company give loan to a person other than shareholder?
No.
Madam, can i open a private company in my residence? Thank you.
The promoter can give No Objection to use the residential place to the proposed company for office purpose. The proposed company will file registered address proof as electricity / telephone/ tax bill and no objection from an owner.
I have filed the form 1A for name availability of a Pvt. Ltd., and the name got approved. I have filed name of two directors say A & B but now I want to replace C as a director in place of B.
is there any possibility to replace the director in process of incorporation if the director gives his/her NOC ?
You have to give NOC for change in directors.
I came here through google search. Thanks for all useful information about company information.
i want to form a co. for my client & i want to knw that is there is any requirement to submit any form in physical form also….because my client wants to form company in ahemdabad(gujrat) & i reside in udaipur ( rajasthan)….please clearify me in this matter.
All forms to register a company should be filed online in pdf format and there is no requirement to submit any physical form. This is as per the procedure of the Ministry of Corporate Affairs.
i want to form a co. for my client & i want to knw that is there is any requirement to submit any form in physical form also….because my client wants to form company in ahemdabad(gujrat) & i reside in udaipur ( rajasthan)….please clearify me in this matter.
Hope for an early response….
There is no requirement to submit any form in physical form. You need to submit documents in pdf format along with e-forms.
Thanks mam….can u pls also tell me the detailed procedure along with all the doccuments required to form a company in US from india
Please call me
Dear All,
Great information shared here. I would like to know something.
What are the documents returned to company from registrar/cs after registration soft/hard copy?
ROC returns soft copies from time to time after approval of name and registration of company. CS /CA will return soft copy as well as physical documents.
Dear mam
We would like to sell a Pvt ltd company and I would like to know more details on the same.
can you please suggest me on it.
Please send your contact details to my mail id.
With regards
Logesh
my contact details are mentioned on website. Please check it.
Dear Mam,
I came across your website just today and found it really fruitful. I am currently working as an independent contractor (content writing) for a US based company and my Boss asks me to register a company as his CPA suggests that he has to transfer funds only to an Indian company and not an individual.
What are formalities for starting a company Mam? I do not have much funds nor a physical setting except my home to start with. This is just for the sake of his request and I am going to do the same work even after registering the company. At least for the next few months I do not have any idea to employ someone to work with me.
Even if I am going to get new contracts in the future I wish to get it done through freelancers. So how shall I proceed with? This is just a rental home and I only have my voter ID in this address. Is it ok?
How much it would cost for initial registration formalities? Let me know. Sorry for cornering you with too many questions.
Thank you.
Couple of questions will need consultancy, please call me.
mam, my name is mangala and i am in dance proffession and i am planing to register my dance group. As now a days everywhere they are asking for the reg certificate before giving us a show. Mam can you please guide me with the process and where shall i go for all the formalities .
Awaiting your reply at the earliest as next month i am having a grand show and they need the group registration no.
If you wish to register your activity you can apply for Shop Act licence. If you are running this activity in Maharashtra, then shop act licence is necessary. Since i don’t know the place of registration, i cannot say which registration will be required. Please provide me place of activity.
i wish to register my dance group situated in bangalore. kindly help.
awaiting your earliest reply
Thanking you
Regards
Mangala
Have you decided on what kind of entity you would like to register i.e. Proprietorship, LLP or Private Limited?
Please call me to discuss this. Thanks.
Couple of queries:
1) Must one avail the services of a local (geographically closer) company registration service provider (CSRP) for incorporation and subsequent corporate/legal advice? What are the disadvantages, if any, of a CSRP based in a different state?
2) How does one go about researching and deciding on a business banker?
It doesn’t matter whether the Company Registration consultant is situated locally in your city or not since now all the Company Formation procedure is online (using internet).
Following points should be considered while deciding the banker for opening the Current Account. It doesn’t matter whether it’s a Nationalised or Private/Co-operative Sector Bank.
1. Choose the nearest convenient location – This facilitates you to do the business transactions at your convenience. Also this could be helpful in case of any emergency or in case of Internet Banking outages/downtime.
2. Volume / Frequency of Transactions – If the business is expected to have very less transactions (Start-ups or local servicing businesses) then you could even go for any nearest co-operative bank or a private bank. If there are lots of transactions expected (Nationwide) then go for a Private Bank or a Nationalised bank as they would provide a more reliable services with a large number of branches spread across country, secured/high available Internet Banking & other miscellaneous facilities.
3. Minimum Average Quarterly/Monthly Balance Requirements : Each bank’s policy differs with respect to the Average Quarterly Balance (AQB) or Average Monthly Balance (AMB) requirements, so need to decide on the basis of your Business requirements. If the desired balance is not maintained then some amount of non-maintenance charges are levied by the banks.
3. Foreign Transactions i.e. inward or outward remittances – Each bank charges some amount of foreign currency payment/collection fees & also the Service tax on the conversion charges on FCY (Foreign Currency) or LCY (Local currency). The charges differs from bank to bank & may depend/change on the basis of frequency, amount & number of transactions. So based on your business needs/expectations you could check different banks.
4. Loan requirements : Loans are made available easily with the Co-operative banks or Private Banks. Nationalised banks have a bit of stringent rules for processing the loans viz. They may ask for last 2 years balance sheet of the business. So if your business forsee any immediate loan requirements (after Company formation) you may choose Co-operative or Private Banks over the Nationalised banks.
5. Other Miscellaneous facilities to consider : Cash credit/overdraft facility, Free Cheque book/leaves, Free transactions each month, Free NEFT/RTGS, Rebate on Annual charges if the AQB/AMB maintained exceeds some specified amount.
You’ve been succinct as ever. Thanks a lot for taking time out to reply. I bank with a nationalized bank for personal needs and wasn’t quite sure whether I should stick with them or not while banking for my small business. Your reply really helped. Keep up the good work and thank you again.
Hi,
We would like to register the Company name in Hyderabad. This is basically to sell various products online in different ecommerce channels. Could you please guide us through the process?
Please visit my blog for understanding the process of formation of Private Limited company. For more details please call me.
Madam, Greetings! I am running a PVT ltd company in chennai with one partner ( Total Two directors) and we dont want to continue as partners, any one of us to leave the company, in such situation who will take care the company? what about our capital and liabilities ? Pls suggest and waiting for your guidance.
With Thanks & Regards,
C.Ganesan.
Sorry for the delayed reply. Somehow I missed this question. If no partner would like to continue the company, then you can make application to the Registrar of Companies under FTE ( Fast Track Exit) Scheme and strike off the name of company from the Registrar or sell the business to any other company.
Madam,
Thanks for your all detailed inf. and it is very useful for a starter.
I am NRI resididing in Saudi. I would like to register an establishment for Overseas Trading & consultancy service for food sourcing and trading in overseas or in India. Am i able to register and run by some of my close relative as i am not in India. I have only my passport, Pan Card and Ration Card & matric certificate is available to proof my nationality. Please advise this inf. is enough to register the establishment in other state than my native state of Kerala.
Yes your close relative can run and you can register company in India. Being NRI you can register company in India being a shareholder and director of proposed company. Your pan card as identity proof and passport for permanent and any electricity bill/ driving licence as present address proof will be accepted.
Hi,
I’m being offered a contract to work for a US based company. If I need to accept the offer would I need to register a private company to do so ?
I guess you could work as an independent contractor for that US based company or even form a Pvt Company/LLP if you foresee/expect further growth/contracts. Registering your business in any form i.e. Private Company or LLP would surely help you get further contracts. I think the decision whether to form company or work independently would be purely personal unless that US based company asks (as a pre-requisite) you to register your own company.
Thanks for useful information
hii.
i have incorporate new private company.
i like to know more that future recquirements for compliance.
what steps need to follow in financial year for company.
thankyou.
Please refer post formalities after incorporation of company in the same post.
Hello Mam,
My brother decided to register one company in Nasik. They want one agreement from me in such way that I am giving one room to them as Non rental for use.
I just want to know is risk factors in this in future. I am worried about the agreement because I dont know how it will work in future.
Please let me know so that I can proceed.
Regards,
SD
For registration of private limited company, the Government shall require copy of registered address as proof of address and No Objection certificate from the owner if it is owned by other party. There will be risk if agreement will be based on non rental basis for one room for office use.
Hi,
I am gonna start a LLP company .. Can I give the registered company address as my house address(permanent) .. and use my office branch address(rental) in all my letter head and where ever necessary.. bcos I dont want my house address to appear everywhere..
I understand that I can register my rental address as registered office , but I dont want to do so since I may change this address and I have to go through a process to change the registered office address..
Yes, you can give your home address for registered address of proposed company. On letter head you will be required to disclose registered address and branch address.
mam,
We are three friends , want to open a company (p).LTD.I want to know to that
1) Here is not need to prepare partnership deed?
2) If we do this deed then it may be advantage
to us.
3) Partner’s position and share at the company must be introduced with there capital value.
4)
a) After regt the company any one partner can remove to the other partner.
b) Or any one can remove his support
to the company . how? .
If you registering new Private Limited company then execution of partnership deed is not required. You need to submit Memorandum and Articles of Association with the Registrar of Companies. Yes, position of director ( you mean to say partner) and share at the company must be introduced with respective capital value. Regarding removal of any director you can make provision in the Articles of association while registration of company, so that after registration of company, the board of directors will have authority to do so.
Thanks,
I’m now working in Abu Dhabi for the past 10months and would like to start a business in 2-3 months. How do go about it:-
1] My permanent address is mentioned in all documents of chennai but I want to start the business in Bangalore.
2] I want my friend to join as director what are the detail required for it.
3] I have personnel PAN no, does that suffice.
4] Can I register the company name and then start off the business types and once flourishes make the company based on it.
5] Which is the common selection of business types where I can diversify as required.
6] Can I start the small business from home after registration and then later open an office or shop based on its saving.
7] What are the documents required to register the company
7] Who can help me in India to complete the formality and its expected cost
Please help
Following are the answers to your Qns :
1] My permanent address is mentioned in all documents of chennai but I want to start the business in Bangalore. :- Yes, it is possible. Registered address proof of Bangalore will be required for incorporation.
2] I want my friend to join as director what are the detail required for it. :- Your friend would be required to obtain his/her DIN.
3] I have personnel PAN no, does that suffice. :- Yes, if you are NRI, along with passport, your PAN card is mandatory.
4] Can I register the company name and then start off the business types and once flourishes make the company based on it.:- Only after incorporation of company, you can commence business.
5] Which is the common selection of business types where I can diversify as required.:- Please get in touch with me and we will discuss in detail.
6] Can I start the small business from home after registration and then later open an office or shop based on its saving.:- Yes, you can do so.
7] What are the documents required to register the company :- Please check the Registration procedure on this blog.
8] Who can help me in India to complete the formality and its expected cost :- I can help you to register the company in India.
Regarding the affidavit that is required in case of DIN application… If the director is a foreign national residing outside India then what is the procedure/requirement on this affidavit? Does it still need to be physically signed by the foreign director on a Rs. 10/- stamp paper and notarized in India?
Hi,
If director is a foreign national, affidavit format shall be notarised from Foreign Public Notary from his home country, no need to obtain notary in India.
In case, the director/ designated partner is residing outside India, then the attached supporting
documents (Passport copy, address proof and affidavit) should be attested by the Foreign public notary.The attesting authority must indicate the following while attesting the documents:- (i) Signatures; (ii)Name in full in Capitals; (iii) Registration No.; and (iv) Seal/ Stamp.
Thanks,
Hi
One of my partners has registered the proposed company name using his DIN. Since he is not continuing with us, we want him to cancel it and register the same company name using another DIN. We have not started the incorporation process yet. What is the procedure for cancellation and further registration process?
Thanks in Advance!
Is your question as follows?
The person who obtained his DIN and started process of name application has decided now to step down from directorship in between the incorporation process. Hence now you are interested to continue to register the same company? Does it mean you want to delete his name from directorship from incorporation process?
Yes, we want to delete his name from directorship in the incorporation process.
Or, can we make a fresh application for the name like ABC Medisys instead of ABC Healthcare which we tried earlier?
Thanks!
Yes, you can delete the name of the director in the incorporation process by obtaining No Objection certificate from him( who would like to delete his name from directorship) and submit NOC along with Form 1 (application for incorporation of company).
Q:-Can we make a fresh application for the name like ABC Medisys instead of ABC Healthcare which we tried earlier
Ans:- If ABC Healthcare is the name approved by ROC, you cannot change the name of the proposed company before or in between the incorporation process. You will have to incorporate the said company with the approved name. You can change its name after incorporation.
2nd option is that if you don’t want to incorporate with ABC Healthcare, you will have to make fresh name application.
Thanks,
I don’t see any FAQ related to starting up subsidiary of a foreign company in India. Could you please advice me on starting a “Foreign subsidiary” in India.
Stay tuned..will soon publish something on this.Thanks.
Hello Mr.Neeraj Kataria,
This is in response to your email received for the Question “How advantageous is it to form a private company over the proprietorship firm?”.
– I have already addressed this in one of my earlier posts, mentioning the same here.
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 separate 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.
Thanks,
CS Meenal
thanks for the info
Very useful info. thanks.
How do we decide on the type of “Form” to be selected in the Fee calculator which is available in the MCA website.
Hi Vivian,
Thanks for your comment.
Yes, just looking at the list of “Forms” it’s difficult for a layman to understand it’s usage, especially when the Form names are just numbers like Form1, Form2A etc.
To know more about each Form, you may checkout the options “Company Forms Download” & “LLP Forms Download” on the Left Panel on MCA website or just checkout following URL’s. Both these URL’s also display the links to Instructions Kit (describing how to fill up the specific forms).
For Private/Public Limited Companies :
http://www.mca.gov.in/DCAPortalWeb/dca/jsp/mydca/home/StaticFramePage.jsp?para1=/MCA21/dca_html/downloadeforms/Download_eForm_choose.html
For LLP :
http://www.mca.gov.in/DCAPortalWeb/dca/jsp/mydca/home/StaticFramePage.jsp?para1=/MCA21/dca_html/downloadeforms/Download_eForm_choose_llp.html
Hope this satisfies your question.
Thanks,
CS Meenal
Very helpful information. Thank you.
These are very useful information…thnxx for help
Can a company with one indian and one director of foreign origin be registered.What are the formalities to be done?
Yes, company with one Indian and one foreign origin can be registered in India.
Thanks for all information about company formation.
Thanks a lot, most of my doubts answered!!
I had a doubt regarding Q7: I too am planning to start a Pvt Ltd firm in Pune, which would be involved in Online Trading Activities. I stay in Pune currently, but all my residence proofs are from my permanent residence. I am under the impression that I can establish the firm with its Registered Office at my home town (where I have my proprietor firm) and then start its business activities in pune. Please do let me know if this is not permitted or so.
Yes, it is possible to register company at home town.