In India, a private limited company is a separate legal entity. It is treated as an independent person under the law. This separates the company from its owners (shareholders) and managers (directors).
By setting up a company you also enjoy limited liability and are not personally held responsible for company losses. Also, it offers better growth opportunities as companies can easily raise funds from banks and
NBFCs at favourable terms.
Do you also want to enjoy these benefits? In this article, let’s learn how you can easily register a company online.
Pre-requisites for setting up a company
Before proceeding with the registration, you must meet the following requirements:
- A private limited company must have at least two directors and two shareholders. One person can take on both roles as a director and a shareholder.
- At least one director must be a resident of India. They must live in India for a minimum of 182 days in a year to meet the residency requirement
- The company name must be unique. It should not resemble the name of an existing company or violate any trademarks.
- A valid registered office address in India is required. This address will be used for all official communication and correspondence related to the company.
Documents required for incorporation
When registering a company online in India, you need to submit several important documents:
- Article of Association (AOA) and Memorandum of Association (MOA)
These legal documents outline the rules (AOA) and purpose (MOA) of the company. For example, say you want to sell goods on online marketplaces, then you must mention this purpose in the MOA.
- Incorporation certificate of a foreign body
If your company involves a foreign entity, you must submit this certificate.
- Director’s interests
Information on any interests that directors have in other companies.
- Nominee's assent
Written consent from the nominee to act as a director.
- Identity and residential proof
Proof of identity and address of the directors and shareholders.
- Declaration of unregistered companies
A statement declaring the company is not registered yet.
- Digital Signature Certificate (DSC)
You will need a Class-3 DSC for singing the SPICe+ INC-32 form, e-AOA, and e-MOA.
- INC-9 declaration
A declaration form by the subscribers and directors.
- Professional recommendation
A recommendation from a qualified professional like a company secretary, chartered accountant, or cost accountant.
- Documents for address proof
To prove your company’s address, you can submit documents such as:
a) Voter Identity Card or Election Card
b) Ration Card
c) Aadhaar Card
d) Passport
e) Driving license
f) Telephone and electricity bill
- Documents for residential proof
To verify a director’s or shareholder’s residential address, the following documents can be used:
a) Bank statement
b) Electricity bill
c) Mobile bill
Using Form SPICe+ INC-32
To incorporate a new company in India, you must fill out a special online form SPICe+ INC-32. It stands for Simplified Proforma for Incorporation of Company Electronically. This form was launched by the Ministry of Corporate Affairs (MCA) on February 23, 2020.
This form is linked with two other important documents:
All three forms (SPICe INC-32, e-MOA, and e-AOA), must be filed together for the company registration process to be complete.
Register a company online in 8 steps
To register a company legally as per the rules set by the Companies Act, 2013, you must follow these steps:
Step 1: Obtain DSC
Before you can submit any documents for company registration, all the proposed directors and shareholders (subscribers) need to get a DSC. This certificate is required to sign the incorporation documents electronically. It must be obtained from government-approved certifying authorities.
Step 2: Apply for Director Identification Number (DIN)
Every director of the company needs a Director Identification Number (DIN). To get this number, directors must file Form DIR-3 on the Ministry of Corporate Affairs (MCA) portal.
Step 3: Get name approval via RUN or SPICe+
You can apply for name approval through any of the two methods:
- Use the Reserve Unique Name (RUN) service
or - Fill out the SPICe+ INC-32 form (Part A)
Step 4: Draft MOA and AOA
Draft the MOA and AOA of your company. These documents must be in line with the Companies Act, 2013. You are required to submit these documents digitally along with SPICe+ INC-32.
Step 5: File Part B of SPICe+ INC-32 form
Fill the Part B of the SPICe+ INC-32 form for the company incorporation. Using it, you can also apply for multiple registrations, such as:
- Goods and Services Tax Identification Number (GSTIN)
- Director Identification Number (DIN)
- Tax Deduction and Collection Account Number (TAN)
- Employees' State Insurance Corporation (ESIC)
- Permanent Account Number (PAN)
- Employees' Provident Fund Organisation (EPFO)
Step 6: Pay fees and stamp duty
When you register a company, you need to pay fees based on the company’s authorised share capital. These fees can differ depending on the state in which the company is being incorporated.
Along with these fees, you will also need to pay stamp duty. Both the fees and stamp duty must be paid when submitting the SPICe+ form.
Step 7: Receive a Certificate of Incorporation (COI)
After the Registrar of Companies (ROC) verifies the documents you submitted, they will issue a:
The COI certificate confirms that your company is legally recognised and exists as a separate entity. It will also include your company’s Corporate Identity Number (CIN), which serves as your company's unique identifier.
Step 8: Open a bank account
Once you have the COI and other required documents, you can open a current bank account in the company’s name.
Conclusion
By incorporating a private limited company in India you enjoy benefits like limited liability and easier access to funds. To register, you need to follow a series of steps:
- Obtain a DSC
- Apply for a DIN
- Choose a unique name
- Fill out the SPICe+ INC-32 form along with e-MOA and e-AOA
After completing the process, you will receive a Certificate of Incorporation, which makes your company legally recognised. Finally, you can open a current account for business transactions.
