The process of forming a private limited company in India is not difficult when you have the right consultants on your side. Currently, the act of incorporating is used to create company entities or corporations. An incorporated business is considered a separate legal entity on its own with its rights and obligations. They will have terms such as ‘Inc.’ Or ‘Limited.’ This allows them to break away from their homeowners and be a separate legal entity. Following are the steps included in company formation:
Promotion of company:
Businesses do not exist on their own. They are created by individuals, groups of people, or organizations. Therefore, they need to be promoted by someone. An idea for a business should be conceived and defined before it can be translated into action, i.e., the business enterprise should be established and its business should begin. Those who are involved with the promotion of business enterprise are known as promoters, who are the creators of wealth and economic experts.
Registration of the company:
Company formation occurs when a company registers under the Companies Act. Only then is a legitimate company formed. Registrar of Companies need the following documents to register a company:
- Memorandum of association: For a public company, at least 7 signatories need to sign it; for a private company, it must be signed by 2 signatories. It must be properly stamped.
- Article of association: Each person who signed the Memorandum of Association has signed this document
- List of directors: The company should prepare and file with the Registrar of Companies a list of directors, including their names, addresses, and occupations.
- Written consent of directors: In addition to the written consent from the directors, a written undertaking from them to take and pay for qualification shares is necessary to be filed with the Registrar.
- Notice for the address of registered office: As well, it is customary to notify the business address of the company within 30 days of incorporation. This notice must be filed with the Secretary of State at the time of incorporation.
- Statutory declaration: A company’s name is entered into the register when the required documents are filed with the Registrar along with the prescribed fees. The Registrar issues a certificate known as the Certificate of Registration once they are satisfied.
Certificate of incorporation:
The Registrar will issue a ‘Certificate of Incorporation upon the registration of the Memorandum of Association and Articles of Association. It is proof of the incorporation and compliance with the requirements of the Companies Act that the certificate has been issued
Certificate of commencement of business:
A private company can commence operations immediately after receiving the certificate of incorporation, whereas a public company can only enter into operation after receiving the ‘certificate of establishment of the business. A public company issues its prospectus after receiving its certificate of incorporation to invite the public to subscribe to its share capital. The prospectus specifies the minimum subscription. The company must then sell the minimum number of shares as stated in the prospectus. An equity certificate and a bank statement are sent to the Registrar after the shares are sold and all the money has been received
You can even go for startup company registration to start with your entrepreneurial journey.