Must-Know Tips To Incorporate Your Company In India
Incorporating your company one of the first few steps to make your business a recognised legal entity. Not only are the owners protected from personal liability for company debts or obligations, but this also improves the credibility of your company. Earlier, the entire process of incorporation took anywhere between a few weeks to over a month and this has now been reduced to under a day owing to the efforts of the Government of India. The advantages are many and it’s probably high time you as a business owner incorporate your company to avail the benefits.
The Ministry of Corporate Affairs has recently introduced a number of initiatives that has reduced reserving a company’s name to half a day and a third of a day for incorporating it. The MCA has been focussed on improving the “ease of doing business” in India and this has been showing tangible results with the incorporation time having been brought down to under a day now from two days in February when it was first introduced.
First of all, you need to understand that there are two heads you can incorporate your company under; Private and Public, and here are the primary differences between these two:
|Commencement of Business||After receiving Certificate of Incorporation||After receiving Certificate of Incorporation & Certificate of Commencement of Business|
|Number of Directors||Maximum 2||Minimum 3|
|Shares & Stocks||Privately held||Open to the public|
Now that the government has expedited the process to incorporate your company, all you need to do is follow the steps mentioned below.
Steps to incorporate your company
Apply for the Director Identification Number (DIN)
Each proposed director of the new company must obtain their identification number as mandated by the Amendment Act of 2006. Now go here to access the necessary forms as per the steps mentioned below:
- Fill out the eForm DIR-3
- Ensure that the applicant and a “Practicing professional or Secretary (who is a member of ICSI) in whole time employment or the Director of the existing company in which the applicant is proposed to be the director” signs on it.
- Attach a photograph and attested scanned copies of all supporting documents: Proof of Identity & a Proof of Residence.
- Digitally sign the form (if you do not already have a digital signature, obtain a digital signature from a Controller of Certification Agencies (CCA) approved agency) and upload it on the MCA21 portal by clicking on the eForm upload link under the eForms tab(watch tutorial here). A Service Request Number (SRN) will be generated. Make sure to note this down for future reference.
- You will be asked to make an electronic payment towards the filing fee of eForm DIR-3 – Net banking, Credit Card, Debit Card, Pay later or NEFT). This is a mandatory step as your uploaded form will only be processed after the DIN application fee has been paid.
- Once the payment is successful and no duplication is detected, you will be given an option to keep a receipt of this eForm upload.
- However, if upon verification of the submitted eForm DIR-3, it was found to be a potential duplicate, the application is sent to a DIN cell for “back office processing”. If found satisfactory, a provisional DIN would be generated and be available for further use.
In case of any changes to the details or particulars pertaining to one of the directors, submitted in the Form DIR-3, the applicant can use the e-form DIR-6 which can be submitted online.
Register on the Ministry of Corporate Affairs
Go to the official website of the Ministry of Corporate Affairs (MCA) and register yourself with all the correct information of yourself and your company.
Apply for company name
Check for availability of your desired company name here. Once you have ascertained that the company name is available, download the necessary form (Form-INC 1 in this case) by logging into the portal, fill it out, attach the digital signature of the applicant, pay Rs. 1000 as fees and submit.
Note that the company name will be available for a period of 60 days after approval unless the applicant completes the incorporation process. You can visit the FAQ’s page in case of any issues.
Incorporate your company
You’re almost there! You can incorporate your company through the “Simplified Proforma for Incorporating Company electronically (SPICe -INC-32), with eMoA (INC-33), eAOA (INC-34)”. Once your company name has been approved, file the following incorporation forms:
A single form of INC-32 through SPICe can be used for Name Reservation, Allotment of Director Identification number (DIN), Incorporation of New Company, Allotment of PAN and Allotment of TAN along with with electronic version of Memorandum of Association, eMoA (INC-33), and electronic version of Articles of Association, eAOA (INC-34) or a PDF attachments of the same.
You can track your application status here by clicking on the corresponding links on the right-hand side of this page. Once your application has been approved by the Ministry of Corporate Affairs, you will receive an email confirmation regarding the incorporation of your company and your updated status will reflect on the MCA website.
Now, that you know what you need to be doing, you can be on your way to setting up a successful business. Good luck!