Do you want to start your business venture? One of the first steps you will need to do is to register your company. Thankfully, the Ministry of Corporate Affairs (MCA) portal lets you do this with ease online. You can also acquire several documents required to register on the MCA portal itself. This comprehensive guide explains how to form a company in India.
How to incorporate a company in India
Follow the steps below to understand how you can form your own company.
Step 1: Check the company name
Per the Companies Act 2013 and Companies (Incorporation) Rules, 2014, your company name must comply with the following guidelines.
Your company name must not resemble existing company names.
You cannot have plural versions of existing names.
You cannot change the type and case of letters, spacing, or punctuation marks of existing names.
Joining two or more words of an existing name will not be accepted.
Translations of existing company names are not allowed.
Names which includes words Bank, Insurance, Stock Exchange, Mutual Fund, etc., must be approved by the respective organisations like the RBI, IRDA and SEBI.
Click here to check whether your planned company name is already taken, and if you need to come up with another option.
Step 2: Obtain the pre-registration documents
The next step is to ensure you have the following documents ready before starting the process for online company registration in India.
DSC: Per the Information Technology Act, 2000, the MCA has made provisions for business owners to use Digital Signature Certificates (DSC) to authenticate documents filed electronically.
DIN: The Director Identification Number (DIN) is a unique number assigned to persons intending to be directors of the company. They need to fill out a form called Simplified Proforma for Incorporating a Company Electronically (SPICe).
MoA: A Memorandum of Association (MoA) is a legal document required to incorporate a company. It contains details of the company's shareholders and the company's objective. As a business owner, you cannot undertake activities beyond those stated in the MoA.
AoA: Articles of Association (AoA) is another legal document stating the company's rules, per section 5 of the Companies Act, 2013.
Step 3: Select your preferred business type
Choose whether you want your company to be PVT LTD, LLP, OPC, etc.
Private Limited: A Private Limited company (PVT LTD) is one where private investors hold shares. All profits and liabilities belong to the company.
Partnership Firms: A Partnership Firm is formed when more than two individuals start a business and divide the profits and losses. These individuals are called Partners.
Limited Liability Partnerships: LLPs are companies with a partnership structure where partners have limited liabilities. One partner is not responsible for the other's misconduct.
Sole Proprietorship: Sole proprietorship companies are owned by single individuals. There are no partners.
One Person Company: An OPC is a company incorporated by only one individual. Before the Companies Act 2013, an individual was not permitted to establish a company singlehandedly.
Read more about the difference between PVT LTD and LLP here.
Step 4: Register the company online
Once the documents are ready, you can create your MCA Portal User ID.
Fill out the SPICe+ form by registering on the MCA Portal. Remember, only directors who have acquired DIN can apply. After creating your User ID, you, as a director, can access the MCA Portal.
Under MCA services, select SPICe+ and submit the relevant documents.
Step 5: Receive the Certificate of Incorporation
The Registrar of Companies (RoC) issues the Certificate of Incorporation after successfully authenticating the company documents.
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*Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. HDFC Bank recognises the challenges entrepreneurs face while acquiring capital. Thus, HDFC Bank has created MyBusiness, a one-stop solution that gives you easy access to loans, digital solutions and provides you with the essential knowledge you need to run your business. With HDFC Bank MyBusiness, you can scale up, expand your operations, and nurture your business.