In order to be incorporated as a private limited company, a business should have at least two directors and a minimum paid up capital of Rs. 1 lakh. Private limited companies are those companies that raise capital through private deposits and shares.As per the guidelines of the Ministry of Corporate Affairs, Government of India, incorporation of a private limited company is done as follows: The applicant has to list 1-6 names for the company. They should be indicative of the company’s objectives. The name availability can be checked online. An application has to be made to the Registrar of Companies (RoC) to get the name approved and registered. An application also has to be made for acquiring a Director Identification Number (DIN) for the business. A DIN is to be assigned to each director and an application has to be made for digital signatures for all directors. Forms such as the ‘Declaration of compliance’ (Form-1), ‘Notice of situation of registered office of the company’ (Form-18) and ‘Particulars of the Director’s, Manager or Secretary’ (Form-32) within 60 days have to be filled. Applicants will then have to arrange for Memorandum of Association and Articles of Association. These have to be stamped and signed. The forms along with stamped and signed memorandum and articles, agreements, company name availability letter along with registration fee are then to be submitted to the ROC. The Certificate of incorporation has to be collected.

1. Accuprosys.com 1

2. Getting Your Company Incorporated:
The 101 of Company Incorporation
A roundup of the basic things every
business owner should know if he is
considering incorporation or is
completely ignorant about it.
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3. You are running a successful
startup or online business
and an acquaintance walks
up and asks you if your
business is incorporated?
That isn’t exactly true.
You rattle on debating that
incorporation of a company requires
tons of paperwork and cash and that
these outweigh the benefits of
incorporation.
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4. Company Incorporation – The
Whats and the Whys
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5. • Why should I get my company
incorporated?
• What kinds of incorporations exist
in India?
• What are the different kinds of
companies?…
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6. Wait!
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7. What you need to know first is what exactly is
business incorporation?
• Incorporation of a company is the process of
creating a new structure for the business wherein it
becomes a legal entity recognized by law.
• What this means is that it can be treated as a
separate entity from the shareholders and founders,
because of which the liability of its shareholders is
reduced.
• Incorporation is beneficial for the long term growth
and expansion for a business.
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8. • Limited by shares
• By guarantee, or could be
• an unlimited company
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9. Benefiting from Incorporation
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10. • The incorporation of a company
removes personal liabilities from the
directors, founders and shareholders.
• Therefore, their personal assets are not
at risk and only the company assets are
used to clear debts at times of crises.
• Incorporated companies are taken more
seriously by customers, suppliers and
prospective workers.
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11. The ownership of the business becomes transferable
and the tax liability is also reduced.
• The company will
continue to remain
even when the
directors and members
change.
• It is also advantageous
for those seeking
financial assistance
from banks and other
such financial
institutions.
While sole traders have to
pay income tax, incorporated
companies have to pay
corporation tax and enjoy a
range of tax deductible costs
and allowances.
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12. As companies can make valid contracts with its
directors and shareholders, an individual owning a
company can also be an
employee director shareholder
lessor supplier creditor
At the same time!
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13. Different company categories (public limited, private limited, part IX,
section 25 company and producer company) have different procedures
for incorporation.
THE BENEFITS OF INCORPORATION ARE
DIFFERENT FOR PRIVATE AND PUBLIC
LIMITED COMPANIES.
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14. Minimum Requirements for
Incorporation
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15. In the case of private
limited company,
• There should be a
minimum of two
directors and a
minimum paid up
capital of Rs. 1 lakh.
• Private limited
companies raise capital
through private
deposits and
placement of shares.
For public limited
companies,
• There should at least
be seven subscribers,
three directors and a
minimum paid up
capital of Rs. 5 lakhs.
• Public limited
companies raise capital
from the public
through public deposits
and issuing of shares.
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16. Steps for Incorporating a
Company
Guidelines of the Ministry of Corporate Affairs,
Government of India
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17. Step 1
• Before subscribing for incorporation, a minimum of one and a
maximum of six names should be listed in order of preference for the
company.
• The names should be indicative of the company’s objectives.
• The names should not resemble that of another registered company
and should also not violate the provisions of names and emblems as
described in the Prevention of Improper Use Act, 1950.
• The name availability can be checked on the portal at the link
http://www.mca.gov.in/DCAPortalWeb/dca/MyMCALogin.do?method=
setDefaultProperty&mode=16.
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18. Step 2
• To ascertain the name availability, applicants should
apply to the concerned Registrar of Companies (RoC) by
filling the electronic form eForm1.
• This is done by logging into the portal. A digital
signature and fee of Rs. 500/- has to be paid along with
the form.
• If a name is not approved, the applicant has to apply for
another name using the same application.
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19. Step 3
• The applicant has to apply for the registration of the company after
the name has been approved.
• This is to be done by filling forms ‘Declaration of compliance’
(Form-1), ‘Notice of situation of registered office of the company’
(Form-18) and ‘Particulars of the Director's, Manager or Secretary’
(Form-32) within 60 days on the portal.
• Mandatory documents have to be uploaded along with these
forms.
• Digital signature and registration fee is required to be paid along
with the applications.
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20. Step 4
• After the forms have been submitted, the
applicant has to arrange for drafting of articles
of association by the solicitors and the
memorandum, and get them vetted by the
RoC.
• These have to be printed and stamped with
appropriate stamp duty.
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21. Step 5
• At least two subscribers need to sign the
memorandum and articles in their own hand,
providing their fathers’ name, occupation,
address and the number of shares subscribed
for, and witnessed by at least one person.
• The memorandum and article should be dated
after the stamping date.
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22. Step 6
• A hard copy of the memorandum
and articles is to be sent to the RoC.
Step 7
O After the application has been processed,
applicants have to collect their Certificate of
Incorporation from RoC and their Corporate
Identity is generated.
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23. Step 7
• After the application has been processed,
applicants have to collect their Certificate of
Incorporation from RoC and their Corporate
Identity is generated.
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24. Public limited companies have to
follow additional steps.
They need to obtain
the Commencement
of Business Certificate
after incorporation of
the company.
• For this, they have to file
a declaration in eForm 20
with the statement in lieu
of the prospectus
(schedule III) or file a
declaration in eForm 19
with the prospectus
(schedule II).
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25. Part IX companies need to fill
eForm 1 and then eForm 18,
eForm 32, eForm 37 and
eForm 39 separately or
simultaneously.
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26. Centre for Innovation and Entrepreneurship
C-4, IIT-H Foundation, Gachibowli, Hyderabad
9618402751, 9000600247
Reach us at:
prabha@accuprosys.com simplify@accuprosys.com
anuradha@accuprosys.com
For more details, please visit: www.accuprosys.com
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