1. What is a Company?
In accordance with the Company Act 2013, a Company is an association of people, formed and registered under this Act or any previous company laws. A Company can also be defined as a seperate legal entity which is diffrent from its shareholders.
2. What are the different type of Companies in India?
Under the Indian Law there are seven types of entities recognized as companies:
- Private Limited Company
- Public Company
- One Person Company
- Limited Liability Partnership
- Non-Profit Organizations (Section 25 Company)
3. How can I register an Indian Company?
Incorporation of a Company has been made simple recently through Simplified Proforma for Incorporating Company electronically i.e. SPICe-INC 32 along with the eMOA in INC-33 and eAOA in INC-34.
4. What is MOA and AOA?
MOA stands for Memorandum of Association an it reveals the name, aims, objectives, registered office address, clause regarding limited liability, minimum paid up capital and share capital of a Company. AOA stands for Article of Association and it contains the regulations for management of the company.
Thus, the memorandum lays down the scope and powers of the company, and the articles govern the ways in which the objects of the company are to be carried out and can be framed and altered by the members.
5. What is Digital Signature Certificate (DSC)?
A DSC can be defined as a physical signature in electronic format, used for the purpose of authenticating one’s identity, signing documents digitally for electronic filing or transaction purposes, getting access to specif information or services online. The information contained in a digital signature certificate are the user’s name and identity, PIN code, Country, E-mail address, Date of issuance of the DSC and name of the licensed certifying agency.
6. What is a Director Identification Number and how do I acquire it?
DIN is a unique identification number alloted by the Ministry of Corporate Affairs to an individual appointed as a Director in a Company, which is mandatory in order to create a database of the incorporated companies.
In order to become the first Director in a new company the application id to be made through eForm SPICe along with prescribed documents.
To become the Director of an existing company an application is to be made in eForm DIR-3 along with the prescribed documents.
PAN is a 10 digit alphanumeric number issued in the name of the Company and mandatory in nature. TAN stand for Tax Deduction Account Number which is also a unique identification number quoted by the tax deductor in every correspondence related to Tax Deducted at Source.
It is mandatory to apply for PAN and TAN along with SPICe (INC-32).
8. What is a Private Limited Company?
To establish a Private Limited Company minimum 2 members and 2 Directors are necessary. Maximum members allowed are 50. The Capital of a Private Ltd. Company is formed with shares and every shareholder is a partner.
9. How to register a Private Limited Company?
The steps to register a Pvt. Ltd. Company involves:
10. What can I do in case I need to change any particulars of Directors?
Particulars submitted in form DIR-3/SPICe with respect to Directors can be changed by submitting e-Form DIR-6 by the applicant.
11. Can I start a business immediately after submission of all the documents with the Registrar of Companies?
No, the Certificate of Incorporation is necessary to start a business in case of Private Limited Company, and a Certificate of Commencement in case of a Public Limited Company.
12. Can I introduce a Foreign National as a Director?
Yes, provided that he or she has to apply for DIN from the Government of India.
13. What is a Public Limited Company?
A public limited company grants limited liability to its management and owners and it is allowed to sell shares to investors which is benificial in raising capital. A minimum of 3 Directors are responsible to establish a Public Limited Company and there is no limit of maximum number. The regulatory requirements are more stringent compared tp a Private Limited Company.
14. What is the capital requirement of a Public Limited Company?
There is no specified amount of Capital required to start a Public Limited Company. However, fee must be paid to the Government for issuing a minimum of shares worth Rs.5 lakhs [Authorized Capital Fee] during the incorporation of the Company.
15. What is Authorized Capital fee?
Authorized capital of a Company is the amount of shares a company can issue to it shareholders.
16. How long is the incorporation of Company valid for?
In case the annual compliances are met regularly, once the incorporation takes place. In case the annual compliances are not fulfiled, the company will be declared as a Dormat Company.
17. What is a One Person Company?
Unlike requirement for other type of comppanies, only 1 member is required to incorporate a One Person Company who will act in the capacity of a Director and Shareholder as well.
18. How to incorporate a One Person Company?
Stakeholders can avail of 5 different services (Name Reservation, Allotment of Director Identification number (DIN), Incorporation of New Company, Allotment of PAN and Allotment of TAN) in one form by applying for Incorporation of a new company through SPICe form (INC-32) – Simplified Proforma for Incorporating Company electronically (SPICe) – with eMoA (INC-33), eAOA (INC-34).
19. What is the minimum authorized capital to start a One Person Company?
Minimum authorized capital is 1 Lakh for a One Person Company.
20. A person can be a member in how many OPC?
A person can be a member of only one OPC.
21. What is a Limited Liability Partnership?
Limited Liability Partnership is a corporate structure that encapsulates flexibility of a partnership and benefits of a Limited Liability Company, where one partner is not liable for misconduct or negligence of another partner.
22. What are the steps to incorporate LLP?
Step 1- Name Reservation
eForm 1, for ascertaining availability and resrvation of the name of a LLP business.
Step 2- Incorporate LLP
eForm 2 for incorporation of LLP
Step 3- LLP Agreement
Execution of LLP Agreement is mandatory and required to be filed with the registrar in eForm 3 within 30 days of incorporation of LLP.
23. Can a existing Company be converted to LLP?
Yes, any existing private company or existing unlisted public company can be converted into LLP by complying with the Provisions of clause 58 and Schedule III and IV of the LLP Act. Form 18 needs to be filed with the registrar along with Form 2 for such conversion.
24. Can an existing partnership firm be converted to LLP?
Yes, an existing partnership firm can be converted into LLP by complying with the Provisions of clause 58 and Schedule II of the LLP Act. Form 17 needs to be filed along with Form 2 for such conversion and incorporation of LLP.
25. What is a Section 8 Company?
A non-profit organisation in India can be registered as a Trust or as Society under the Registrar of Societies as a private limited non-profit company under Section 8 of the Companies Act, 2013.
26. How to incorporate a Section 8 Company?
File Form INC-1 for name availability. After approval, requirement of obtaining a license for a Section 8 Company is to be done, for which Form RD-1 is to be filed in order to obtain a license for such company. After obtaining license number, applicant can proceed further to incorporate a company by filing e forms INC-7, INC-22 and DIR-12 or e-forms INC-7 and DIR-12 as the case may be.
27. Is a proposed Section 8 Company required to file eMOA, eAOA (INC-34) along with SPICe (INC-32)?
No. Section 8 companies are mandatorily required to file MOA and AOA as pdf attachments to SPICe (INC-32)