Setting up a business is always an exhilarating journey, and incorporation of a private limited company forms a part of the process of establishing a more legitimate and practical entity. Knowing what it takes to register a private limited company might make the process smoother and leave you well-prepared in every respect. It means taking you through each procedure, giving you clearer expectations at each step. Company registration in India shall also be touched upon so you can know about the overall process.
Why Form a Private Company?
Before jumping into the process of registration, it is important to know why most entrepreneurs prefer having a private limited company. Such a structure has multiple benefits:
Shareholders face liability only in case debt up to a certain amount that they have invested in the company, which protects personal savings.
- Legal Separate Entity – The company has its life independent of its owners and can sue and be sued.
- Greater credibility – A registered company is usually trusted, and many clients and potential partners can easily be easily attracted.
- Access to loans/investments – Almost all institutes providing loans and investors. Allow quick access to private limited companies in comparison to any other businesses registered with them.
Step 1: Obtain Digital Signature Certificate (DSC)
The first process to register a private limited company. Involves obtaining a DSC for all proposed directors. It is very important because after receiving it, they will be in a position to sign various documents and forms through the internet.
To obtain a DSC, you must visit a certifying authority. The application process always requires proof of identity and address as well as a passport-sized photograph. DSC usually takes 1-3 working days, so this is the first step of your registration procedure.
Step 2: Obtain Director Identification Number (DIN)
After getting the DSC, the director needs to register himself with a DIN. A DIN is also a number issued by the Ministry of Corporate Affairs, but it is also mandatory for a company’s directors. All the directors are to be enrolled into a directory of directors.
You can apply for the DIN through the MCA portal. The procedure is an online form where you submit the requisite documents, such as a scanned version of your DSC. Approvals are received in 1-2 working days, and obtaining the DIN is not much hassle if all your documents are complete.
Step 3: Choice of Appropriate Company Name
One essential decision for your private limited company is its specific name. The name selected must not only be unique but must also comply with the regulations as specified by the MCA. It should not resemble similar company names or trademarks since if a case of resemblance arises, there are probably legal issues.
You can also check the name availability by yourself on the MCA portal. Once you have a name, you submit it for approval. This will take 2-3 working days. It is always good to have a few alternative names ready. In case the first choice might not get approved.
Step 4: Draft Memorandum and Articles of Association
Both Memorandum of Association (MOA), and Articles of Association (AOA) are basically constitute the founding documents. In formulating the objectives, rules, and regulations of your company. The MOA describes the particulars of the name, registered office, and business activity. Whereas AOA contains the detail of the internal management of the company.
Preparing the documents requires time and accuracy since they should be within the legal boundaries. You might consider sharing the burden with a lawyer or company secretary to ensure accuracy. In terms of complexity, it takes 3-5 days to prepare the application for incorporation.
Step 5: File the incorporation application
Once the MOA and AOA are prepared, it is the incorporation application filing with the Registrar of Companies, ROC. It consists of
- MOA and AOA
- Directors and shareholders details
- Form DIR-12: for appointment of directors
- Form INC-22: for the registered office
- Any other such documents, which the ROC would require.
You can fill up the filing form on the website of MCA and it normally takes 1-2 days in processing. However then it requires that all the documents be duly filled to avoid delay.
Step 6: Obtain the Certificate of Incorporation
The ROC checks your application. After it has successfully verified your application, the ROC shall issue the Certificate of Incorporation. The certificate is proof, in law, that your company has been registered and has acquired a separate existence.
Generally take 7 to 10 working days. To receive the certificate of incorporation after the filing of the application. Once you get this certificate. Then your private limited company registration process will be complete.
Step 7: Get Licenses and Permits
Additional Licenses and Permits: On the nature of business you would be conducting, you would be required to apply for some additional licenses. Of course, other common licenses include GST registration, trade license, industry-specific permit, among others. It varies according to the region and location. Therefore take your time, research, and find out what you need for your business.
It may take from a week to several weeks to apply. For such licenses depending on the type of license and relevant licensing authority.
Step 8: Open a Bank Account in the Company’s Name
After receiving the Certificate of Incorporation and any required licenses. It is then a good time to open a company bank account. All the transactions pertaining to the business will be made through this account.
When you open a company bank account, that would mean presenting the Certificate of Incorporation, MOA, AOA, and identity proofs of authorized signatories, which is generally quite rapid and can take a day or two to get done.
Final Words on Company Registration in India
The process of private limited company registration is pretty complicated and entrepreneurs have to understand this before they can begin to set up a formal business entity. This entire process involves the formation of DSC, PAN, TAN, opening a bank account among other such activities, which is an important preparatory step while setting up your private limited company.
Go through this guide, and you will come across the process of registration very easily. Before any document that you might require while processing your registration, it is worth the time taken to ensure you do not fall into the pitfalls or holdups that people face and fall for.
Now that you have your private limited company registered. You can focus on the required things mostly building your business and realizing your entrepreneurial dreams. Know that though the process is long, every step does count, to make a sure foundation for your future success.
clavaxtechnology
tagxa