INCORPORATION OF A PRIVATE LIMITED COMPANY (Pvt. Ltd. Company)

INCORPORATION OF A PRIVATE LIMITED COMPANY

As we all know, recently our government taken crucial measures to  conquer the existing recession and promote growth. Keeping in mind the above objectives and adding on to employment opportunities etc. the corporate tax is reduced to 15%. Earlier it was 22%.  

This will attract many entrepreneurs to start their business in the form of a private limited company. Moreover the recent Companies Amendment Act of 2015 and 2017 has given a lot of benefits in the form of exemptions for the ease of doing business.

In view of the above it is important for all of us to know as “How to incorporate a Private Limited Company in India?” It is not only the professionals who have to have the knowledge, but also the entrepreneurs, so that they are aware of the procedure, documents required, compliances to be done and consequences of non-compliance.

Let us see in detail the steps to incorporate a private limited company.

STEP 1 : NAME APPROVAL

• Go to MCA (Ministry Of Corporate Affairs) website (www.mca.gov.in).
• Existing users may login with their user name and password.
• New users have to create a new user name and password to proceed.
• After we login, we will be able to see an icon named “RUN” (Reserve Unique Name).
• Upon clicking the same, a form will open.
• We have to fill this form online.
• Please note that this form cannot be downloaded and the application is only available in online mode.
• This came into effect on 26^th January, 2018. Before that we used INC – 1. Now it is omitted.
• While entering the company name, we have to check the suffix that is allowed with name. It is mentioned on MCA.  (http://www.mca.gov.in/MinistryV2/runServicerFAQ.html)
• Auto check facility is available for proposed name. Only one name can be proposed. When using INC – 1, we could propose 6 names.
• CIN (Corporate Identification Number) has to be mentioned only if an existing company wishes to change its name.
• In the comment option we have to mention the objects of the company.
• We need not have DSC (Digital Signature) or DIN (Director Identification Number) for this process.
• The only perquisite is a MCA login.
• There is a provision to upload PDF document, if any. It is not compulsory to upload any document.
• The fee for the same has to be immediately after filling the form.  The fees is INR 1,000.00.
• After payment, challan will be generated.
• We can resubmit RUN only once.
• The reserved name shall be valid for 20 days if it is a new company and if it is change of name, it shall be valid for 60  days from the date of allotment.
• Other than through RUN, name approval can be obtained through SPICe form. We will see about it in the steps below.

STEP 2: COLLECT THE REQUIRED DOCUMENTS

• The applicant has to keep the below documents ready.

• There is no requirement of stamp paper.

• Declaration by the first subscriber. It is obtained on plain paper. Photo identity and residence proof is to be attached. (INC – 9).
• Declaration by the first directors. It is obtained on plain paper. Photo identities and residence proof of the first directors are attached. (DIR -2).
• If the subscriber or director has DIN then the attachment of photo identity and residence proof could be done away with.
• We should get a NOC ( No Objection Certificate) from the owner of the property where the company intends to have its registered office. It is not compulsory to have a own property. In case of rented property, lease deed or rent agreement will suffice the requirement.

STEP 3: FILL UP SIMPLIFIED PROFORMA FOR INCORPORATING COMPANY ELECTRONICALLY (SPICe)

• SPICe is also called INC – 32.
• It is a single window form and is a major game changer compared to the old method.
• After the first two steps, the applicant has to fill this.
• The maximum number of subscribers that can sign INC-32 is 7. If the number of subscribers exceed 7, all the subscribers have to sign on the hard copy of MOA (Memorandum of Association) and AOA (Articles of Association) in the format specified (Table A to J in Schedule 1) and the same is to be scanned and attached. In such case INC-33 and INC-34 need not be filed. This method is to be followed if one of the subscribers is at a place outside India and is signing from there.
• The maximum number of directors is 20.
• Applicant can also apply for name through SPICe.
• Maximum 3 DINs can be applied through INC – 32.
• If we are incorporating a new company, it is compulsory to apply for TAN, PAN through SPICe. All existing companies mandatorily have to mention their PAN and TAN.
• MCA does not have the control over the stamp duty. It is the state matter. The state decides the amount of stamp duty depending upon the authorized capital.

STEP 4:  FILL UP INC-33, INC-34 & INC-35

• INC – 33 is for e-MOA and INC – 34 is for e-AOA. It can be downloaded from MCA.
• It should be as per Table A to J o Schedule I.
• The form has to be digitally signed by the subscriber and company secretary on the same date.
• AGILE is the Application for Registration of the Goods and Services Tax Identification Number (GSTIN), Employees’ State Insurance Corporation (ESIC), registration and Employees Provident Fund Organization (EPFO) registration.
• AGILE is also called INC – 35.
• The details pertaining to GST, ESIC, EPFO as required is to be filled in matching the details of INC – 32.

STEP 5: CERTIFICATE OF INCORPORATION

• Once the INC-32, INC-33, INC-34 and INC-35 are ready, the same has to be uploaded on the MCA and make the payment accordingly.
• We will get the incorporation certificate with CIN, PAN & TAN.
• In case of any shortage or insufficiency of data/information, MCA will intimate the applicant, and the documents have to be resubmitted.
• The new changes and digital platform enables the company to get registered within a day.

• It is worthwhile to note that, a company having share capital cannot commence business or put into effect its borrowing power once it receives the certificate of incorporation.
• As per Section 10A of the Companies Act, 2013 the directors have to file a declaration within 180 days of date of incorporation.

With this article, the author has tried to put in plain words as how a private company is incorporated.