Company registration can become easy if you plan certain things right. To let you know what are the things you should plan before incorporation, we have written below article. Go through it and let us know how it helps you.
Before you start the process of company registration, we suggest you to arrange following things to speed up the process.
Select the type of company to register
First and foremost thing you should do is to choose the form of business based on your requirements and capital available with you.
If you have budget constraints and wants to do a local business such as a retail shop, consultancy office or any other thing which does not require much customer focus then you can start with proprietorship or partnership form of business instead of forming a company.
Proprietorship and Partnership firm has its own limitations. If you are planning to expand your business instead of limiting it to a particular locality or customer, then we suggest you to go for a company form of business.
You have following options:
- One person company
- Private limited
- Public limited
Each type of companies have their own advantages and disadvantages. If you are not finding anyone to join in, then one person company can be a better choice. If you have two or more persons to start, better to go for private limited.
7 or more persons can form a public limited.
Things you must do before applying for name approval
Before you start using the name or applying for approval, you should make sure no one else is using it. You can find it by checking MCA and trademark database. The easiest way to start your research is through internet search.
Whatever way you adopt to choose your company name, you should make sure that it’s unique.
While applying for approval, you have to write why you have named your company in that way. It’s better to write down now instead of thinking about it at the time of submitting application.
If it’s a unique name, apply for trademark registration first. While applying for company name approval, attach the TM application with it.
Before applying for approval, if you take above things into account, then you can get your name approved quickly. Or else, it will take long time to get approved. It may also get rejected for issues like name is too general, name is similar to an existing company or due to non compliance to companies act 2013.
Elaborate your nature of business in simple words
As you have decided to register a company, we know that you are quite sure about the business your company will be doing post registration.
Your organization either be selling products, or expertise to its customers.
If you can be specific about the line of business with product details, category of services within the main line of business, then it will be easier for the professional to write main object clause of your company MOA.
Or else, after registration you will come to know that certain business activities are missing in MOA object clause.
Main object of the company
Before drafting your main object clause, you should ask yourself what type of services to offer and what are the things you will be selling to your customer.
Answer to these type of questions will let you know the area of business that should be placed in your company’s memorandum of association or MOA. Please note, if a particular business activity is not mentioned in MOA, then your company can’t do that business.
You can handover the drafting part to a professional after finding your area of business or operation.
Please remember, maximum time will be taken for drafting of MOA, AOA and other legal documents based your input.
If you can draft these documents at the time of applying company name or before that, then time can be saved and you can register your company quickly.
Please note, you have to given correct details of the objects to be pursued by the company.
Other objects – Ancillary or incidental to the main object
Other object clause lists all other matters that are necessary for furtherance of the main object.
You can draft these objects based on a approved MOA of a similar business in your area of expertise, but, we suggest you to show it to a professional before finalizing.
Get digital signature certificate or DSC before name approval
Digital signature certificate is a must for company registration. If you are using SPICe form for registration, then all the subscribers and one director is required to have DSC. In case of INC-7, subscribers are not required to use DSC.
Based on requirements, we suggest you to arrange DSC before starting the registration process as it will take at least one day to get it issued.
Many promoters wait for the company name approval and after getting it approved, they process documents for DSC and start the process of drafting other documents. If you have not arranged everything in order then, the process will get delayed. Therefore, we suggest you to process everything that can be processed before getting name approval to reduce the delay in filing forms for registration.
Based on your documents submitted by you, the professional has to draft MOA, AOA and other legal documents and send it for your review. It takes time.
Please note, name approved by government is valid only for 20 days. If company registration application not processed by you within that period allowed, then you have to re-apply again for approval.
If you can draft all the documents simultaneously at the time of getting name approval or before that, then the process will become simple and easy to execute.
Registered office address
Once you have identified what your company will be selling, next thing you should do is to find where the company’s registered office will be located.
Registered office is a address from which the company is legally doing business. All legal communications and letters will be addressed to this address. Please note, it doesn’t mean that your company can’t operate from some other place.
A company can operate from multiple places based on the decision of board of directors and certain legal compliances.
However, at the time of registration, you need to provide your registered office address in SPICe form along with lease agreement, NOC from the owner and a recent utility bill. This address will get printed at the bottom of the certificate of incorporation issued to you after getting registration.
Instead of selecting given address as registered office, you also have option to provide a correspondence address in SPICe form. You select this option only when you haven’t decided the registered office location.
In case of selecting the address as correspondence, you need not submit any documents such as lease agreement, NOC from landlord and utility bill with SPICe form while uploading it for registration.
Please note, in such case the correspondence address will get printed in certificate of incorporation and you need to file INC-22 within 30 days from the date of incorporation along with lease agreement, NoC from House owner and utility bill with government.
If you failed to file INC-22 within the time allotted, then in addition to normal fee, you are required to pay additional fee based on the number of days delay.
Directors details
Director details in AOA and SPICe form or INC-7.
The appointed professional or you can fill up registration form. To fill up the form you require cert detail of the directors. These details can be filled up from documents such as PAN, address proof.
If any or all directors are having DIN, then you need to provide the director identification number and name of the companies in which they are already appointed as a director.
In addition to these, directors are required to submit consent to become a director and their particulars in a specified format.
Before processing registration form, make sure that none of the directors are disqualified.
Paid up share capital
Paid-up share capital for a new company is like putting life into a baby. Subscribers or shareholders are required to invest in the same proportions as mentioned in the subscription page of the Memorandum of association.
We advise you to transfer the exact in proportions to the shareholding percentage in MOA from each subscribers bank account. Based on the number of shares, you need to issue shareholding certificate.
Therefore, you need to check share capital clause of memorandum of association before uploading the form for registration. Subscribers should mention the exact amount that they like to invest post incorporation.
Arrange documents to be filed along with SPICe form for registration
While applying for company name or after that, we suggest you to arrange following documents to shorten the process of company registration time.
- Income tax Permanent account number or PAN card
- Address Proof of directors and subscribers
- Identity Proof of directors and subscribers
- Memorandum of Association and Article of association – You need to attach it only when you are registering a company under section 8 (charitable object) or with more than seven subscribers or if any of the non-individual first subscriber in based outside India. In any other case, you need to use SPICe_MOA (INC-33).
- Declaration by first subscribers and directors
- Proof of office address
- Copies of utility bills not older than 2 months
- Particulars showing interest of first directors in other entities.
These documents should be scanned in such a way that it will be easy to read. We suggest you to set the scanner resolution to 300 with grey style to get a perfect scanned copy for registration.
You need to make sure that the details of subscribers and directors as per attached documents are matching with the SPICe form filed for company registration.
Apart from PAN, ID proof, residential address proof, lease agreement, NOC from house owner, utility bill and other documents, you are also required to draft certain legal documents.
