If you want to do business in India, you need to ensure the registration of the same. This is a mandatory requirement for every business start-up made in India. This whole procedure is governed by the 1956, Companies Act. This Act essentially states all the procedure involved in the:
- Formulation of a new company,
- The functional regulations it needs to follow and
- The winding up of a registered company.
A business registration gives the company a legal validity. Thus it is able to enjoy certain benefits that are defined in the Act.
Procedure for registering a Private Ltd. Co.
Essentially a Private Limited Company needs to register with the Registrar of Companies present at its location of operation. Procedures involved are:
- Checking the availability of the proposed name using e-form IA and the name should be suffixed by “Pvt Ltd.” In case the same is not available, fresh applications need to be made.
- Requirement for minimum paid up capital is INR 1lakh,
- A minimum of 2 members and a maximum of 50members is permitted,
- Signing of the Memorandum of Association or MoA by the directors or promoters of the company forms a mandatory part of the how to register a company procedure,
- An Articles of Association or AoA enumerating the procedures to carry out the daily business activities, internal management and powers and restrictions of the members and directors of the company also needs to be signed,
- Signing of an agreement about the procedures involved in appointment of company directors etc.,
- Required stamp duty as mentioned in the Stamp Act needs to be borne when making the MoA and AoA,
- Registration fees need to be paid wherever required.
On satisfaction of all the criteria mentioned in the Companies Act of 1956, the Registrar issues the business registration certificate. A Private Limited company can commence operations on the basis of the same.
Procedure for registering a Public Ltd. Co.
Mandatory procedures for the business registrationof a Public Limited Company are:
- Company name has to be suffixed by “Ltd.”,
- Minimum paid-up capital required is INR 5lakhs,
- Minimum of 7 members required for its formation,
- Promoters need to inform the ROC or Registrar of Companies about the invitation of company capital from the general public by subscription to shares and the prospectus containing the invitation to the general public regarding the same needs to be filed with the ROC,
- An MoA and AoA need to be signed on the same lines as that required for a Private Limited Company and forms an important part of how to register a companyas Public Limited,
- Form 29 or the consent form needs to be signed by all the directors and submitted,
- A certificate stating the commencement of business needs to be obtained from the ROC and directors or company promoters need to file a:
- Declaration of compliance as stated in section 149 of the Companies Act of 1956 and
- Issue a statement in form 20,
- All required registration fees and stamp duty needs to be paid.
As stated earlier the certificate for the commencement of operations by the registered Public Limited Company has to be issued by the ROC along with an Incorporation certificate so that it can start the business.