On the basis of queries from our clients, we have compiled a list of questions on company registration that are generally asked and had our experts give you answers.
Frequently Asked Questions on Company Registration
Q1. How can a company be incorporated under the Indian Law?
Ans. The following steps have to be followed for incorporation of a company –
- Application for obtaining Director Identification Number(DIN) from Ministry of Corporate Affairs.
- Selection of name – It requires for checking the availability of the name in the MCA website.
- Application of the proposed names with alternatives in the order of priority to be submitted to the Registrar of Certificate.
- Drafting of MOA and AOA – These are the few supreme documents that have to be accurately submitted to the Registrar.
- Filling of forms with Registrar is an essential step require the filing of Form – INC 7 AND Form INC -22 and Form DIR-12.
- Fees and Stamp Duty is to be paid to the State.
- Afterward, Documents submitted to ROC will be verified by the Registrar.
- Pursuant to the verification of the documents, certificate of incorporation is issued.
Q2. How can a Company name be registered in India?
Ans. For the purpose of the registration of the company, the company first have to register company name for which they have to submit the application to the Registrar for checking the availability and similarity to a previously registered name. With the company registration application, they have to submit the alternative names in order of priority in case of rejection of the proposed name. Once the Registrar is satisfied, the name is registered.
Q3. How can one avoid rejection of registration of the company name in India?
Ans. According to the MCA Guidelines on Company Name, these are the few things on the basis of which name falling in the categories mentioned below will not generally be made available if:
- It is not in a consonance with the principal objects of the company as set out in its Memorandum of Association. This does not necessarily mean that every name should be indicative of its objects. But when there is some indication of business in the name then it should be conformity with its objects.
- The company’s main business is finance unless the name is indicative of those particular financial activities like Investments, Loans etc.
- It includes any word which is offensive to any section of people.
- The proposed name is the exactly Hindi translation of the name of an existing company in English especially an existing company with a reputation.
- The proposed name has a close phonetic resemblance to the name of the company in existence.
- The name is only the general one like Cotton Textile Mills Ltd. or Silk Manufacturing Ltd. and not specific like Calcutta Cotton Textiles Mills Ltd.
- It includes words like “co-operative” or word equivalent to this word in the regional languages of the country.
Q4. What is Stamp Duty?
Ans. Stamp Duty is payable under Section 3 of the Indian Stamp Act 1899. Stamp Duty is a nominal amount paid for legal recognition of the contents of a document. It is required to be paid at the time of the private limited company registration.
Q5. How can Stamp Duty be calculated in any Indian State?
Ans. Generally, every state in India has its own Stamp Act on the basis of which Stamp Duty rates are calculated and for the states that do not have any Stamp Act, there is a centralized act known as the Indian Stamps Act 1899 governing them.
Q6. What is a certificate of incorporation and certificate of commencement and how they can be obtained?
Ans. Certificate of Incorporation is a certificate which sanctions the existence of the companies once the registrar has scrutinized all the documents and have made necessary changes in MOA and AOA. Certificate of Incorporation is given to both Public and Private Limited company. Certificate of Commencement is given after obtaining a Certificate of Incorporation and a public company having a share capital cannot commence its business without this certificate. Whereas this is not necessary for commencement for Private Companies which can commence its business after receiving the Certification of Incorporation.
Q7. What are the benefits of Incorporating a business in India?
Ans. Following are the advantages of incorporating a company –
- The company can buy, sell and hold property in its own name.
- The company can sue and get sued in the law of court without personal involvement of directors.
- Ownership of the company can be easily transferable.
- There is no liability of its member as it is a separate entity. The company has a common seal.
- It provides perpetual succession to the company which means it continues in the long run and death of the director doesn’t affect the running of the business.
- It provides benefits on the taxation front as individuals pay income tax and companies avail the benefit of corporate taxes.
Q8. What is Digital Signature and a Digital Signature Certificate (DSC)?
Ans. Digital Signature is a digital code created for the purpose of affixing them on digital documents and proving equal authority as of the handwritten signature. Digital Signature Certificate is a prima facie evidence of the signature which validates the authenticity of the signature.
If you have any other questions on company registration feel free to talk to our experts or contact us at Company Registration.