Thursday, January 16, 2014

How to register / form a Company in India - A procedure

There are following options available for Company Registration in India & major steps involved in Registration:

1.       Private Limited Company:  As per section 2(68) the Companies Act, 2013, A “Private Company" means a company which has a minimum paid up capital of one lac rupees or such higher paid up capital as may be prescribed, and by its articles,-
(a) restricts the right to transfer its shares, if any;
(b) except in case of One Person Company, limits the number of its members                      to two hundred but not including-
(i) persons who are in the employment of the company, and
(ii) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased; and
          (c)  prohibits any invitation to the public to subscribe for any securities of the                        company:

Provided that where two or more persons hold one or more shares, in a company jointly, they shall, for the purposes of this definition, be treated as a single member;

Steps for formation of Company in India:
·                     DIN Application
·                     Acquire & Register DSC
·                     Name Availability
·                     Registration of Company

2.        Public Limited Company: "Public company" is defined in Section 2(71) of the Act (2013) and it means a company which —
a.     is not a private company;
b.     has a minimum paid-up capital of five lakh rupees or such higher paid-up capital, as may be prescribed;
c.     is a private company which is a subsidiary of a company which is not a private company.

Apart from process of incorporation of Private Company mentioned above, after registering the Company, one have to apply for the “Certificate of commencement of business” to the Registrar of Companies.

3.        Part IX Company: Part IX of the Companies Act, 1956 provides an opportunity to an association of seven or more persons formed in pursuance of any other law enforce in India to get itself registered under the Act as a company limited by shares, or as a company limited by guarantee or as an unlimited company. Even a partnership firm having seven or more partners with a permanent share capital divided into shares of a fixed amount and duly constituted according to the provisions of the Indian Partnership Act, 1932 can be registered as a company under this part.

4.   Section 25 Company: A Section 25 Company under the Companies Act 1956 is a voluntary association of people for promoting commerce, arts, science, religion, charity; wherein no profits or other income is distributed to its members by way of dividend and such company is not required to suffix the term “limited” or “Private limited” to its name.

5.    Foreign Company setting up Place of business in India: "Foreign company" is defined in section 591 of the Act (1956) and it means a company which
a.     is incorporated outside India and
b.     has established a place of business within India.


A Foreign Company can set up place of business in India. There is no need to take the DIN of Director/s and of Authorized Person from the Foreign Company. The applicant can be any person, either director or any other person, authorized by Foreign Company. 

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