A company in India is required to be incorporated under The
Companies Act, 1956 and is also required to comply with various regulations/
procedures laid down under the Companies Act, 1956.
A Pvt Limited Company is:
A Company limited by shares in which there can be maximum 50
shareholders
The minimum number of shareholders is 2 (two).
No invitation can be made to the public for subscription of
shares or debentures
Cannot make or accept deposits from Public, and
There are restrictions on the transfer of shares.
The liability of each shareholder is limited to the extent
of the unpaid amount of the shares face value, and the premium thereon in
respect of the shares held by him.
Ex planatory table
Particulars
|
Requisites
|
Minimum Directors
|
2
|
Minimum Subscribers
|
2
|
Minimum Authorised Capital
|
Rs 1.00 lakh
|
Step 1:
i) Obtaining Director Identification Number (DIN-1) for all
the Directors of the proposed company.
Documents required – Passport of the applicant containing
address of the applicant and passport size photograph.
If all the particulars are given, DIN-1 provisional number
can be generated in half a day’s time.
ii) Obtaining Digital Signature for at least one Director of
the proposed company.
It requires ID Proof, Address Proof and the applicant’s
signature on the application form. It will take 2 to 3 days once the
application is received duly filled in all respects.
Step-2:
Making online
application to ROC for availability of Name in Form 1A.
The particulars required for making this application are:
-Name of the proposed company
-State in which the registered office of the proposed
company will be situated
-Main Objects, in brief
-Names of Subscribers to the Memorandum of Association (it
is nothing but, first shareholders of the company, who should sing MOA &
AOA)
-Proposed Authorized Share Capital of the Company
This process will take 3 to 5 days approx.
Step-3:
Once the name is approved by ROC, then preparation of MOA,
AOA, other forms & documents viz., Form 1, Form 18 & Form 32 along with
other documents have to be done and filed with ROC.
Approximately it will take a week’s time to complete incorporation
formalities
MoA and AoA ?
On receipt of the name approval letter from the ROC, the MOA
and the AOA are required to be drafted. The MOA states the main, ancillary /
subsidiary and other objects of the proposed company. The AOA contains the rules
and procedures for the routine conduct of the proposed company. It also states
the authorized share capital of the proposed company and the names of its first
/ permanent directors. After that the MOA and AOA are required to be stamped. A
stamp duty is required to be paid on the MOA and on the AOA. The stamp duty
depends on the authorized share capital.
DIN: Director Identification Number
Every individual proposed to be appointed as a Director need
to have a Director Identification Number (DIN). For filing name availability
provisional DIN is sufficient (which is applied online) For filing
incorporation documents with the ROC, the permanent DIN is must and same takes
4-5 days after sending documents to DIN Cell, Noida.
What are the
documents required to be executed for incorporation?The following documents are required to be executed (signed) before they are submitted to the ROC:
1. MOA and AOA - These are required to be executed by the
promoters in their own hand in the presence of a witness stating their full
name, father's name, residential address,
occupation, number of shares subscribed for, etc.
2. Form No. 1 - This is a declaration to be executed on a
non-judicial stamp paper of INR 20 by one of the directors of the proposed
company or other specified persons such as Attorneys or Advocates, etc. stating
that all the requirements of the incorporation have been complied with.
3. Form No. 18 - This is a form to be filed by one of the
directors of the company informing the ROC the registered office of the
proposed company.
4. Form No. 32 - This is a form stating the fact of
appointment of the proposed directors on the board of directors from the date
of incorporation of the proposed company and is signed by one of the proposed
directors.
5. Name approval letter in original.
6. Power of Attorney signed by all the subscribers of MOA
authorizing one of the subscribers or any other person to act on their behalf
for the purpose of incorporation and accepting the certificate of
incorporation.
Difference between
Public And pvt. company
1. Minimum Paid-up Capital : A company to be
Incorporated as a Private Company must have a minimum paid-up capital of Rs.
1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs.
5,00,000.
2. Minimum number of members : Minimum number of
members required to form a private company is 2, whereas a Public Company
requires atleast 7 members.
3. Maximum number of members : Maximum number of
members in a Private Company is restricted to 50, there is no restriction of
maximum number of members in a Public Company.
4. Transerferability of shares : There is complete
restriction on the transferability of the shares of a Private Company through
its Articles of Association , whereas there is no restriction on the transferability
of the shares of a Public company.
5 .Issue of Prospectus : A Private Company is
prohibited from inviting the public for subscription of its shares, i.e. a
Private Company cannot issue Prospectus, whereas a Public Company is free to
invite public for subscription i.e., a Public Company can issue a Prospectus.
6. Number of Directors : A Private Company may
have 2 directors to manage the affairs of the company, whereas a Public Company
must have atleast 3 directors.
7. Consent of the directors : There is no need to
give the consent by the directors of a Private Company, whereas the Directors
of a Public Company must have file with the Registrar a consent to act as
Director of the company.
8. Qualification shares : The Directors of a
Private Company need not sign an undertaking to acquire the qualification
shares, whereas the Directors of a Public Company are required to sign an
undertaking to acquire the qualification shares of the public Company .
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