FORMATION-INCOPRORATION OF A COMPANY
Incorporating a Company in India:
Incorporation of a company refers to the process of legally forming a company or a corporate entity. Advantages of incorporation of a company are limited liability, transferable shares, perpetual succession, separate property, the capacity to sue, flexibility and autonomy. Incorporated businesses offer many more advantages over sole proprietorship companies or partnership companies. To get a company incorporated legally in India one has to go through procedure provided and regulatory provisions provided and amended time to time under The Companies Act, 2013 which also talks about Form Spice+ for incorporation and many other necessary and mandatory registrations/licenses covering Income Tax, Goods and Services Tax, Social laws (ESIC, EPFO, Shop and Establishment Registration and Professional Tax Registration) and even opening a bank account.
What are the basics for incorporating a Company (Private or Public Limited) in India?
Proposed Name & Reservation of Name:
This shall be the foundation stone of the prospective company, the first would be to decide a name of the company and check with the name availability and if the name is available then immediate next move is to reserve that name.
Minimum 2 Directors, (in case of Private Company) and 3 (in case of Public Company), maximum upto 15 Directors.
Minimum 2 Shareholders, (in case of Private Limited) and 7 (in case of Public Company) whether Body Corporate or Individuals or combination of both;
The place of Registered Office (R.O.) of the Company should be decided considering various factors such as specific state taxes, ease of business, availability of resources, etc. In case of legal disputes, the jurisdiction of the court is determined by the location of the registered office of the company. This, therefore becomes an important factor to be considered before incorporation. Shifting of registered office from one state to another is allowed however it may take some time. Irrespective of the location of the registered office, a company can do business throughout India;
There is no minimum capital requirement prescribed for incorporating a private or Public company. However, the amount equivalent to paid-up capital of the proposed Company should be paid by the subscribers to the company within 180 days of incorporation.
Post Incorporation Compliances
Congratulations! Now that you got the company registered, you need to ensure hygiene and care to be on the right side of the law. It makes a lot of economic sense to stay compliant. It helps in efficient and uninterrupted functioning of the Company. As someone rightly said, it takes less time to do things right than to explain why you did it wrong. Besides, there are consequences.
There are some crucial time bound actions and associated reporting, like appointment of Auditors, finalize registered office, receipt of FDI towards share subscription money, issue share certificates, file FC-GPR for issue of shares, file for Commencement of business (INC 20A) and IEC (Import Export Number) registrations, wherever required.
Company incorporation is now an integrated process which means it contains in itself many connected registrations. With incorporation, one must have already inherited a Bank Account, Permanent Account Number (PAN), Tax Deduction Account Number (TAN), Employee Provident Fund (EPFO) Registration, Employee State Insurance (ESIC) Registration, Professional Tax Registration (for the state of Maharashtra), and Goods and Service Tax (GST) Registration (if applied at the time of incorporation).