Requisition for Company Formation

The most suitable form of entity for carrying out business in India with a long term objective would be to form a Private Limited Company, by making investment through the equity shares in the Company. The basic Requirement for a private Limited Company in India is as follows:-

Minimum Two Directors (One should be resident in India)
Minimum Two Shareholders

Under the current rules and regulations the registration of the company in India is easy and hassle free. The steps for incorporation of Company in India are as under:

1. Acquire Digital Signature (DSC) and Director Identification Number (DIN) for the proposed Promoter director of the Company

2. Name Approval:

An application in Form No. SPICE+ (PART A) needs to be filed with the Registrar of Companies (ROC) of the state in which the Registered Office of the proposed Company is to be situated. Following details are required to be stated in the application:-

1. Two alternative names for the proposed company. The names of the proposed company should not be identical / similar to the name of the other company already registered in India. The name can be coined names from the objects of the proposed company, or the names of the promoters, etc. but should definitely be indicative of the main object of the company. The foreign nationals can have identical name of its parent company, subject to terms & conditions as may be imposed by the ROC.

2. Main objects of the proposed company.

On submitting the application, the ROC scrutinizes the same and sends the approval / objections in about 48 hours to the applicant. On fulfilling the objections, if any, raised by the ROC, a formal letter of name approval is issued. Name will be reserved for 20 days only from the date of approval of name application by the ROC.

3. Drafting of Incorporation documents

On receipt of the name approval letter from the ROC, the incorporation documents like Memorandum of Association (MOA) & Articles of Association ( AOA), Form INC 9 and various declarations etc are required to be drafted. The MOA and AOA are charter documents of the company. Therefore, these documents should be drafted with due diligence and by a professional having in depth knowledge of the business and Applicable Indian Rules & Regulations. The MOA states the main and incidental or ancillary objects of the proposed company. It also states the authorized share capital of the proposed company and the names of its promoters. The AOA contain the rules and procedures for the routine conduct of the proposed company. It also states the names of its first / permanent directors of the proposed Company.

Documents required for incorporation of the company

The following documents are required to be executed (signed) before they are submitted to the ROC.

MOA and AOA - These are required to be executed electronically by the promoters by affixing their Digital Signature in the presence of a professional engaged for incorporation of company, stating their full name, father's name, residential address, occupation, number of shares subscribed for, etc.
Other Incorporation Documents such as Form INC 8, Form INC 9, various Declaration and consent to act as director, Power of Attorney etc

Execution of these documents before filing for Registration

Once the documents as stated above, are properly drafted, these will be signed by the promoter, directors and the consultant responsible for incorporation of the company. Further these documents need to be notarized & legalized in case the documents have been signed outside India. Thereafter these documents will be submitted to the ROC through E-form SPICE+ for incorporation of the company along with requisite fee as prescribed under the Act

Issuance of certificate of incorporation by the ROC

The Registrar of Companies on being satisfied about the documents filed and contents thereof, will issue certificate of incorporation. The certificate so issued by the ROC is conclusive proof of incorporation of the company in India under the Companies Act, 2013.

Effect of Registration of a Company

According to Section 9 of the Companies Act, 2013, these are the effects of registration of a company:

From the date of incorporation mentioned in the Certificate of Incorporation, the Company become the body corporate.
A registered company can exercise all functions of a company incorporated under the Act. Also, the company has perpetual succession with power to acquire, hold, and dispose of property of all forms. Also, it can contract, sue and be sued by the said name.
Further, the company becomes a legal person separate from the incorporators from the date of incorporation. Also, a binding contract comes into existence between the company and its members as mentioned in the Memorandum and Articles of Association. Until the company dissolves or the Registrar removes it from the register, it has perpetual existence.