There is always a procedure called "Incorporation of a Company" that must be completed before a business may begin operations. The legal processes necessary to complete this incorporation represent the maximum required stages for various businesses. Here, we'll take a close look at the company registration process from start to finish.
What Are the Various Types of Indian Business Organizations?
Before registering a company, it is essential for the owner to have a firm grasp of the specific industry into which their enterprise fits.
1. Limited Liability Partnership (LLP)
A Limited Liability Partnership (LLP) is a kind of business structure in which the company itself is treated as a legal person. However, each partner's liability is capped at their individual investment.
2. Private Limited Company
For legal purposes, a Private Limited Company (PLC) operates independently from its owners. That the corporation and its founders, directors, and stakeholders (in the form of shareholders) are distinct legal entities. Everyone associated with the organization is thus considered an employee. If your firm fits this description, you may be interested in the information provided on the linked page on company registration.
3. One Person Company (OPC)
In 2013, the government implemented this to lower the bar to entry for a sole proprietor. If your firm has a single promoter or owner, that individual may keep operating as a sole proprietor while still benefiting from the protections afforded by corporation law.
4. Public Limited Company (PLC)
A firm that has issued stock to the public and established a system wherein shareholders' liability is capped at the value of their holdings is known as a "Public Limited Company" (PLC). Therefore, shareholders are not liable for any sum more than the value of their shares should the company incur losses.
Steps in Incorporation of a Company
To establish a public business, seven persons are required, but just two are needed for private company incorporation. The process of forming a corporation includes the following activities.
1. Ascertaining Availability of Name
Choosing a suitable name for a corporation is the first step in the formation process. A corporation may be traced back to its registered name. The memorandum of association specifies the company's name. The name of a public corporation must end in "Limited," whereas the name of a private firm must end in "Private Limited."
The promoters must submit a written application to the State's Registrar of Companies to determine whether the proposed name is available for adoption. The application fee is 500 Indian Rupees. If the orporation completes all the paperwork within three months, the Registrar will approve the name change.
You may learn more about the meaning and characteristics of a company, as well as the benefits and drawbacks of the incorporation of a company in India, the lifting of the corporate veil, and the many types of companies, by exploring the other topics listed under "Elements of Company Law."
2. Preparation of MOA and AOA
A company's constitution or set of rules is called its memorandum of association. The memorandum describes the company's intended market, its stated goals, and the kind of business it intends to do. It's broken up into five distinct clauses.
Articles of Association is a document that lays forth the guidelines by which a company's internal management will operate. Agreement between the firm and its members is established by this Article. Members' rights, responsibilities, and obligations are all laid forth in this article. It binds all shareholders to the same extent.
3. Printing, Signing, Stamping, Reviewing
The memorandum and articles of organization are drafted and created with the aid of the Registrar of Companies. Particularly with promoters who have no background in writing the articles of incorporation.
The company's articles of incorporation and memorandum of incorporation cannot go to press unless the Registrar of Companies has approved them. The articles and memoranda follow the same paragraph structure and are presented in reverse chronological order.
Each subscriber or their agent must sign the articles in the presence of a witness in order for them to be legally binding.
4. Power of Attorney
The promoter may next hire an attorney who is authorized to operate on behalf of the business and the promoters in order to complete the legal and difficult paperwork procedures necessary for the company's establishment. In addition to the memorandum and articles, the attorney will be able to amend any additional papers that have been submitted to the registrar.
5. Additional Company Registration Documents
The First – e-Form No.32 – Consent of directors
The Second – e-Form No.18 – Notice of Registered Address
The Third – e-Form No.32. – Particulars of Directors
6. Statutory Declaration in e-Form No.1
All the requirements of the Companies Act and the regulations thereunder have been complied with regard to all things previous and incidental thereto, as further set out in this statement.
7. Registration Fees
When forming a company, it is necessary to pay the Registrar of Companies the required charge. Whether or not a company has share capital is tied to its nominal capital.
8. Certificate of Incorporation
The Registrar will register the business and issue a certificate of incorporation if he is certain that the firm has met all of the conditions for registration. Therefore, the Registrar's ncorporation certificate is irrefutable evidence that the Act's prerequisites have been fulfilled.
Benefits of Establishing a Company in India
Company formation in India offers several benefits for all parties involved in running a business there. The future success of the business owner and the company is contingent on these advantages.
- • According to the Companies Act of 2013, a registered company is a distinct legal entity, existing independently of its directors and shareholders. The obligations of the members of a corporation are restricted to the debtors and creditors of the corporation since the corporation has its own assets, debuts, and legal processes.
- • Once a corporation is registered, its existence is "perpetual," meaning it will continue to exist even if its directors, members, or shareholders change. The incorporation will be valid as long as the company satisfies the requirements of the Companies Act.
- • Shares are freely transferable between promoters, business stakeholders, and the general public in the event of a publicly listed firm once they have been registered. While there may be certain limitations on the transfer of shares in a private limited business, this cannot be done completely.