Private Limited Company Formation Procedure

PRIVATE LIMITED COMPANY

SHAREHOLDERS: MAXIMUM – 50; MINIMUM – 2

Requirement to register the company with the Registrar of Companies (ROC).

Minimum Paid-up capital at the time of incorporation of a private limited company: Rs. 1,00,000/-, which can be increased any time, by payment of additional stamp duty and registration fee.

Form No. 1A (It is a declaration to be executed on a non-judicial stamp paper of Rs. 100 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.): needs to be filed with the ROC in which the Registered Office of the proposed Company is to be situated. The form is required to be signed by one of the promoters. The details to be state in the said application are as follows:

1. Four alternative names for the proposed company. (The name can be coined names from the objects of the proposed company or the names of the directors, etc. but should definitely be indicative of the main object of the company. Justification for the name needs to be specified along with the application)

2. Names and addresses of the promoters (Minimum 2).

3. Authorized Capital of the proposed company.

4. Main objects of the proposed company.

5. Names of other group companies (if any).

Some more documentation are also to be produced as a part of Form No. 1A:

· Form No. 18 - to be filed by one of the directors of the company informing the ROC the registered office of the proposed company.

· Form No. 32 - 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.

· 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.

· Power of Attorney in case of a subscriber who has appointed another person to sign the MOA on his behalf.

On submitting the application in Form 1A along with the enclosures, the ROC scrutinizes it and returns with their approval / objections in about 10 days to the applicant.

On fulfilling of the objections a formal letter of name approval is issued to attorney.

On receipt of the name approval letter from the ROC, the Memorandum and Articles of Association of a Company is required to be draft. 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.

A stamp duty is required to be paid the Memorandum and Articles of Association of a Company. The stamp duty depends on the authorized share capital.

ROC calls attorney with a name approval letter along with Memorandum and Articles of Association of a Company both in original. On complying with the same the CERTIFICATE OF INCORPORATION is granted to the attorney.

The Company can start its business immediately on incorporation.

THINGS TO DO TO START WORK

· Obtaining Permanent Account Number (PAN) from Income Tax Department

· Obeying Shop and Establishments Act

· The directors of an Indian company, both Indian and foreigner directors, are required to obtain Director Identification Number - DIN and Digital Signature Certificate - DSC

Auditors: The Company must appoint a qualified auditor. Auditors are appointed or re-appointed at general meetings at which annual accounts are presented, and they hold office from the conclusion of the meeting until the next general meeting.

Company Seal: All companies must have an engraved seal. This must be impressed on share certificates and must be used whenever the company has to execute a deed.