In this blogpost Anushka Singh, Student, Delhi Metropolitan Education, IP University, writes about the important steps which needs to be taken for incorporating a company as per Companies Act, 2013.
“A company is an association of many persons who contribute money or money’s worth to a common stock and employs it in some trade or business and who share the profit and loss arising therefrom. The common stock so contributed is denoted in money and is the capital of the company. The persons who contributed to it or created it, or to whom it belongs, are members. The proportion of capital to which each member is entitled is his “share”. The shares are always transferable although the right to transfer them may be restricted”. (Lord Justice Lindley)
The INC 29: Section 4, 7, 12, 152 and 153 of Companies Act 2013 deals with how to incorporate a company. The new Companies (Amendment) Act, 2015 bring some new provisions relating to the incorporation of a company.
Digital signature certificate
The first step towards the incorporation of the company is getting authorized signatories as mentioned under the Information Technology Act, 2000. A digital signature is basically an electronic signature which is duly issued by a certifying authority that shows the authority of a person signing the same. Under MCA-21 there are four types of identified users of digital signatures:
Professionals (CA, CS, cost accountants and lawyers);
Authorized signatories of the company including Managing Director or Manager or Directors or Secretary;
Representatives of banks and financial institutions
Section 153 obtaining directors’ identification number
The next step is to obtain directors identification number, every individual who is appointed as a director of a company will make an application for director identification number in form of Dir 3. It is mandatory for the directors to apply for the DIN. DIN is required before commencing the incorporation of the company.
Name for proposed company
According to the Section 4(4) with rule 9 of Companies (Incorporation) rules, 2014 the name of the company shall be in Form no. INC 1 with a payable fee of one thousand rupees and the name should be in accordance with name guidelines given in Rule 8. After the company’s approval name ROC will send a letter with respect to approval for the availability of name for a company. The name will be valid for sixty days from the date on which application was made.
Preparation of important documents
After the company’s name is approved by ROC, then the next step is to prepare documents like a memorandum of association and articles of association. It should be noted that main object of both the documents should match the objects mentioned in e-Form INC. 1 these two documents contain the rules and regulations of the company and, therefore, should be prepared with utmost care drafted in a broader sense. Memorandum of Association shall be in the respective form as prescribed in Tables A, B, C, D and E in schedule 1 and Article of Association in F, G, H, I and J in schedule 1.
Documents required for the incorporation of a private company
A private company requires certain documents
Memorandum of Association, Articles of Association, Declaration in Form no INC 8 by professionals, an affidavit from each subscriber, proof of residential address, verification signature of the subscriber, NOC, proof of identity.
After all the documents are submitted the company is finally registered, the company can start the commencement from the date mentioned.