Procedure to Start a Private Limited Company in India

This information will be useful for those who are looking in a nutshell the steps involved to start a Private Limited company in India 

Below are the Mandatory Requirements to Start a Private Limited Company

·         There should be Minimum 2 Directors

·         There should be Minimum  2 Shareholders

·         The directors and shareholders can be the same person

·         Minimum Share Capital to start a company shall be INR. 100,000

·         DIN (Director Identification Number) for all the Directors

·         DSC (Digital Signature Certificate) for one of the Directors

In order to Start A Company refer Below Steps:

Step 1. First of All Get the Director Identification Number & Digital Signature Certificate.

Before Applying the DIN we should know What is a Director Identification Number (DIN)?

eForm DIR-3 is required to be filed pursuant to Section 153 of the Companies Act, 2014 & Rule 9(1) of the Companies (Appointment and Qualification Of Directors) Rules, 2014 which are reproduced for your reference. - See more at

Step by step Process to Apply DIN

Step by step process to be followed by the applicant is as under:

1. What is the procedure of obtaining DIN? 

As per the revised procedure for DIN Allotment, any person intending to apply for DIN shall have to make an application in eForm DIR-3 and should follow the following  procedure:

1. eForm DIR-3 has to follow the offline eFiling process. For more details regarding the same visit eFiling FAQ's.

2. Attach the photograph and scanned copy of supporting documents i.e. proof of identity, and proof of residence as per the guidelines. Physical documents are not required to submit at DIN cell.

3. Along with the supporting documents, verification by the applicant for applying for allotment of Director Identification Number (DIN) shall also be attached. This shall contain the Name, Father’s name, date of birth and text of declaration and physical signature of the applicant.

4. The eForm shall have to be digitally signed and shall be uploaded on MCA21 portal.

5. Upon upload, Pay the fees for DIR-3 eForm. Only electronic payment of the fees shall be allowed (I.e. Netbanking / Credit Card). No challan payment will be accepted under revised procedure of DIN allotment.The user is required to get himself/ herself registered on the MCA21 Portal to obtain login id, which is necessary for payment of the fees. After obtaining the login‐id, Login to the MCA21 portal and click on 'eForm upload' link available under the 'eForms' tab for uploading the eForm DIR-3. eForm DIN-3 will be processed only after the DIN application fee is paid.

6. Upon upload and successful payment,

In case Form DIR-3 details have not been identified as potential duplicate, Approved DIN shall be generated and if the details have been identified as potential duplicate, Provisional DIN shall be generated.

7. Processing of e Form DIR-3

In case, DIR-3 is a potential duplicate, the MCA DIN cell will examine the e Form DIR-3 and same shall be disposed of within one or two days.

8. Post‐approval changes in particulars of DIR-3

If there is any change in the particulars submitted in form DIN‐3, applicant can submit e‐form DIN‐6 online. For instance in the event of change of address of a director, he/ she is required to intimate this change by submitting eform DIR‐6 along with the required attested documents.

2. What things should be taken care of while filling form DIR-3?

Please note that Income Tax PAN is mandatory in case of Indian applicants so the applicant details (name, father's name, date of birth) should be as per the PAN details. The particulars filled in form DIN-3 should match with the details given in the supporting documents to be submitted along with DIN application. Any mis-match will lead to rejection of DIN application. Particulars filled in form DIR-3 should match with the details given in the supporting documents to be submitted along with DIN application. Any mis‐match will lead to rejection of DIN application.

3. Whether any fee is payable along with application for allotment of DIN?

Yes, DIN application fee of Rs. 500/‐ is payable w.e.f. 1st April 2014.

4. How to enquire about the status of the payment made for Form DIR-3?

Status of the payment made for Form DIR-3 can be enquired from 'Track Payment Status' link on the homepage of www.mca.gov.in.

5. What are the scanned documents required to be attached with DIR-3?

- High resolution photograph of the applicant

- PAN is mandatory now. So copy of pan is mandatory for identity, name, father's name and date of

birth.

- Proof of father's name is not required in the case of foreign nationals

- Copy of passport is mandatory as an id proof in the case of foreign nationals.

- Present Address proof which should not be older than 2 months

- Verification in Form No. DIR-4 is as per the format given on the website

Documents required for DIN Application in case of Indian Applicant 

a) Address Proof: Copy of passport / driving license having pin code / electricity bill / telephone bill / Election card / Bank statement certified by Bank Manager (should not be older than 30 days), also PIN code must be mentioned on the address proof.

b) Identity Proof: Copy of PAN Card  (Income Tax Permanent Account Name is mandatory in case of Indian National and in such cases applicant details should be as per Income tax PAN)

c) One Passport Size color photograph

d) Email Address of the Applicant *

e) Mobile/Cell Number *

f) Current Occupation *

g) Educational qualification *

h) Affidavit to be signed by an applicant * (It shall be notarized on Rs. 10 stamp paper) vide Ministry of Company Affairs Notification dated 25.12.2012.

Notes:

1. All the documents require “Self attestation”.

2. In case of Foreign national or NRI, passport copy is must and identity proof and address proof should be notarized by an Indian Consulate of home country. The Address proof  should not be older than 1 year from the date of filing of form.

3. While making DIN Application following details are mandatory :

First Name, Middle Name, Last Name, Details of father of an applicant (even in case of a married woman)

4. In case of a Married woman, copy of the Marriage Certificate is required (If DIN needs to be in the “Changed Name”)

 * items are mandatory field for DIN 1 application 

What is a Digital Signature Certificate (DSC)?

Digital Signature Certificate (DSC) is the digital equivalent (i.e. electronic format) of physical or paper certificates. Examples of physical certificates are drivers’ license, passport. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver’s license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove your identity, to access information or services on the Internet or to sign certain documents digitally.

Why is Digital Signature Certificate (DSC) required?

Like physical documents are signed manually, electronic documents, for example e-forms are required to be signed digitally using a Digital Signature Certificate. 

Documents required for obtaining DSC

a) Digital Signature Certificate application Form (duly signed by an applicant). An applicant is required to sign across the photo.

Download the DSC Application Form

b) All other documents are same as required for the DIN Application

Note : All the documents require “Self attestation”

Step 2. Search for the Company Name availability

The Promoters have to provide at least 6 names in the order of their preference/priority. The Promoters can themselves search for the available names by visiting the MCA Website: Check Name Availability 

Step 3. Application for the Name availability

Apply for the name of the company to be registered by filing Form INC-1 for the same. After that depending upon the proposed company type file required incorporation forms listed below.

Form INC-7 or Form INC-2 : Form INC-7 for Application for incorporation of a company (Other than OPC) or Form INC-2 for Application for Incorporation of OPC.

Note: The name availability guidelines issued by MCA should be followed.

Step 4. Drafting of Memorandum of Association (MOA) & Articles of Association (AOA)

What is a Memorandum of Association?

Memorandum of Association covers fundamental provisions of the company’s constitution. It covers main object and other objects of the company.

What is Articles of Association?

a company's articles of association (called articles of incorporation in some jurisdictions) is a document which, along with the memorandum of association (in cases where the memorandum exists) form the company's constitution, defines the responsibilities of the directors, the kind of business to be undertaken, and the means by which the shareholders exert control over the board of directors.

Articles of Association contain rules and regulations governing the internal management of the company. It is a binding contract between company and its members and members among themselves defining their rights and duties.

After name approval from ROC, the next step is to draft MOA & AOA. The subscribers need to specify Name, Address, and Occupation in their own handwriting & sign the subscription pages of MOA & AOA.

If one of the subscribers is a Foreign National or NRI, the subscription page where he/she is supposed to sign on the Memorandum and Articles of Association, should be notarized by an Indian Consulate of Home Country.

Step 5. Filing of e-forms with ROC (Registrar Of Companies)

Following Forms to be filed/uploaded on the MCA Website

a) Form INC-7 (Incorporation document), along with MOA & AOA

b) Form INC-22 (For Notice of situation of the Registered office). Form INC-22 is to be filed within 30 days from the date of Incorporation of OPC (If the registered address is different from the address given in Form INC-22) or other than OPC (if not filed earlier)

c) Form DIR-12: Particulars of appointment of directors and the key managerial personnel and the changes among them. This form is to be filed by OPC in case promoter is not the sole director or there are more than one director in an OPC.

d) Power of RoC (Registrar of Companies) to obtain Declaration/Affidavit from  Subscribers/first directors  at the time of Incorporation. Refer General Circular No. 11/2013 dated 29.05.2013

Need for such declaration :  The Central Government, as per it’s experience realized that there were some companies who accepted fraudulent investments / deposits without complying the provisions of SEBI, RBI and other authorities. In order to avoid such fraudulent acceptance of deposit and non registration under the Government schemes, it is felt necessary to obtain declaration from promoters and directors of new company while incorporation process. Hence Ministry of Corporate Affairs passed General circular No. 11/2013 dated 29th May, 2013 and made it mandatory for new companies to give declarations that no funds would be collected without meeting the applicable norms of SEBI, RBI and other authorities. In the case of already registered companies, these declarations would be required whenever the company changes its objects of business. Thus, to protect the interest of investors as well as of depositors such step has been taken seriously by the Ministry.

Format of declaration cum affidavit Subscribers/first directors at the time of Incorporation : There is no prescribed format provided by the Ministry of Corporate Affairs.

Step 6. Payment of ROC Fees & Stamp Duty

After filing of documents online, we need to make payment of ROC fees and Stamp Duty electronically which is based upon the Authorised Capital of the Company.

TABLE OF FEES TO BE PAID TO THE REGISTRAR

To Check the Fees refer the link given on the MCA Website for the ROC Fees “Fee Calculator” .

To know more about each Form, you may checkout the options “Company Forms Download” on the Left Panel on MCA website or just checkout following URL. This URL also display the links to Instructions Kit (describing how to fill up the specific forms).

http://www.mca.gov.in/DCAPortalWeb/dca/jsp/mydca/home/StaticFramePage.jsp?para1=/MCA21/dca_html/downloadeforms/Download_eForm_choose.html

In order to know the Total statutory fees, note down the fee for the following forms from the dropdown :

Form INC-1, INC-7 (select option “Incorporation of other companies”), 

Click on the “Calculate Fee” to get the individual form fees & add up all the individual form fees and the “Stamp Duty”. Please refer to the “Stamp Duty” link on the MCA Website. Note : Stamp Duty varies as per the “State” in which the Company is to be registered.

Step 7. Verification of documents / forms by ROC

After payment of all stamp duties and ROC fees, ROC scrutinizes all the documents and forms. In case of any objections/queries raised by ROC, resubmission of forms may also require.

Step 8. Issue of Certificate of Incorporation by ROC

Once all the Forms are duly approved by ROC, the digitally signed “Certificate of Incorporation” is emailed to the Directors.

As part of the Green Initiative by the MCA (Ministry of Corporate Affairs), few Certificates including “Certificate of Incorporation” are now issued only in the electronic format i.e. softcopy (having digital signature of ROC Registrar).  Once the Incorporation Certificate is received, Company can start it’s operations.

Few New changes are mentioned below

·  Power of RoC (Registrar of Companies) to obtain Declaration/Affidavit from  Subscribers/first directors  at the time of Incorporation. Refer General Circular No. 11/2013 dated 29.05.2013

Tags: Procedure to Start a Private Limited Company in India, Procedure Involved  to Start a Private Limited Company, Procedure to Form a Private Limited Company, Procedure to register a Private Limited Company,

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