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Registration of Companies in India


For someone who wants to launch a business, navigating the procedural aspects can often be tedious and challenging. If you have chosen a company as your preferred business structure, more questions arise in terms of documentation, registration, and allied procedural requirements. The good news is, the Ministry of Corporate Affairs (MCA) has introduced (in 2018) SPICe Form INC-32 which is a Simplified Proforma for Incorporating Company Electronically. Form INC-32 can help incorporate a company quickly in India by integrating many of the steps into a single process.

This piece aims to walk you through the process of company registration in India, and provides a few important links that should help you along the way. 

How does one get a company registered in India? 

Registering a company in India is now a simple 4-step process. Here is what you’ll need to acquire:

  1. A Digital Signature Certificate(DSC) 
  2. Registration on the MCA Portal or New User Registration 
  3. Director Identification Number (DIN) and SPICe Forms 
  4. A Certificate of Incorporation 

At the outset, you will have to determine the type of company to be registered- private, public or One Person Company. The company can also be of different categories like company limited by shares, company limited by guarantee or unlimited company.


Step 1- Acquire a Digital Signature Certificate (DSC) 

Digital Signature Certificates (DSC) are the digital equivalent (that is electronic format) of physical or paper certificates. Few Examples of physical certificates are drivers' licenses, passports or membership cards. Certificates serve as proof of identity of an individual for a certain purpose; for example, a driver's license identifies someone who can legally drive in a particular country. Likewise, a digital certificate can be presented electronically to prove one’s identity, to access information or services on the Internet or to sign certain documents digitally. Just as physical documents are signed manually, electronic documents, for example e-forms are required to be signed digitally using a Digital Signature Certificate.

Now, the question is who issues the DSC?

A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian Information Technology Act 2000. Certification Agencies are appointed by the office of the Controller of Certification Agencies (CCA) under the provisions of IT Act. The list of Certification Agencies is linked below:

http://www.cca.gov.in/cca/?q=licensed_ca.html

There are three types of DSCs; Class 1, 2 and 3. Class 2 Digital Certificates are used to verify the identity of a person against a pre-verified database. This type of Digital Signature is used for e-filing of documents with the Ministry of Corporate Affairs (MCA) and the Income Tax Department. Class 2 Digital Signatures are issued to a person as a USB token after verifying self-attested copies of identity and address proof. It is Class 2 DSC tokens that are used for company registration, LLP registration, etc. The procedure for obtaining a DSC is as under: 

  • DSC Applicants can directly approach Certifying Authorities (CAs) with original supporting documents, and self-attested copies will be sufficient in this case. 
  • DSCs can also be obtained, wherever offered by CA, using Aadhar eKYC based authentication, and supporting documents are not required in this case. 
  • A letter/certificate issued by a Bank containing the DSC applicant’s information as retained in the Bank database can be accepted. Such letter/certificate should be certified by the Bank Manager.

After you submit the application form accompanied by identity and address proof, the time generally taken by CAs to issue a DSC may vary from three to seven working days. Also on fulfilment of terms and conditions, DSC is issued by some CA’s on same day based on eKYC for Aadhaar Holders. The Certifying Authorities are authorized to issue a DSC with a validity of one or two years. The cost for obtaining the same would vary depending on the entity issuing it as their charges will defer. Digital Signatures are legally admissible in a Court of Law, as provided under the provisions of IT Act, 2000. 


Step 2- Registration on the MCA Portal or New user registration

You have to self-register in the MCA21 application available at 

www.mca.gov.in

to avail the MCA services like filing e-Form and viewing public documents. During successful registration you are assigned a USERID and password or given an attempt to register your Digital Signature Certificate (DSC). In case you are a Company Director, or a Professional User you have to provide your DSC instead of password during registration. You can then login to the MCA21 application with your user ID and password/DSC. 

To self-register, follow the steps given below:

  1. Access the link given above.
  2. In the top-bar of the website, click the Register link given. The New User Registration page is displayed. 
  3. In the User Details section, enter your role-related details. Based on the information provided in this section, your access level is provided.

Once you have successfully registered yourself, click the link below the next time you choose to log in to the MCA portal:

http://www.mca.gov.in/mcafoportal/login.do

at this point, you have to check if the name selected for your company is identical to those existing in the MCA data base. This can be done by logging on to the portal. Entrepreneurs who wish to incorporate a company with a unique name can directly file for incorporation using the SPICE form (detailed below), saving time and money. On the other hand, if an Entrepreneur wants to incorporate a company with a name that could be similar to an existing company or LLP or trademark, prior approval can be obtained from the MCA for use of name by submitting the Reserve Unique name (RUN) form along with a fee of Rest. 1000/-. 

Step 3- Acquiring a Director Identification Number (DIN) and SPICe

The newly introduced SPICe Form INC-32 has largely consolidated the process of company registration by clubbing reservation of name, DIN application and incorporation into one giant step. 

DIN is an 8 digit, unique Director Identification number allotted by the Central Government to any person intending to be a Director or an existing director of a company. It is specific to a person i.e. you will have the same DIN even if you are a director of two or more companies as it has a lifetime validity. Whenever a return, an application or any information related to a company is submitted under any law, the director signing such return, application or information will mention his DIN underneath his signature.

To apply for DIN, the below mentioned forms are to be filed electronically. It has to be digitally signed and then uploaded to the MCA21 portal. The three forms are:

1. SPICe Form: Application for allotment of DINs to the proposed first Directors in respect of new companies shall be made in SPICe form only. Attach Proof of Identity and Address Proof. DIN would be allocated to an applicant only after approval of the form.

2. DIR-3 Form: Any person intending to become a director in an already existing company shall have to make an application in e-Form DIR-3 for allotment of DIN.

3. DIR-6 Form: For changing any details mentioned in the DIR-3 form/ SPICe with respect to Directors, Form DIR-6 has to be submitted online. With the form, the attestedsupporting document is also required to be submitted. 

The simplifiedand integrated process for incorporation of a company (along with reservation of name and DIN allotment application) is done through Form No. INC-32, e- Memorandum of Association in Form No. INC-33 and e-Articles of Association in Form No. INC-34. The eForm-32 has other added benefits wherein the DINs get allotted to those Directors who do not hold a valid DIN, and the Company’s PAN, TAN and ESIC registration can also be obtained easily in a single step. The digital signature of a professional (Chartered Accountant/ Company Secretary/ Cost Accountant/ Advocate) is required to file Form INC-32. The professional must declare that all information presented in the form is correct and enter his/her membership number and certificate number.

The documents required for SPICe Form INC-32 are: 

  • Memorandum of Association  
  • Articles of Association 
  • Affidavit and declaration by first subscriber(s) and director(s) 
  • Proof of office address
  • Copies of utility bills that are not older than two months
  • Copy of approval in case the proposed name contains any word(s) or expression(s) which requires approval from central government
  • If the proposed name is based on a registered trademark or is subject matter of an application pending for registration under the Trade Marks Act, then it is mandatory to attach the trademark registration certificate or trademark application copy
  • NOC from the sole proprietor/ partners/other associates/ existing company
  • Proof of identity and residential address of the subscribers
  • Proof of identity and residential address of directors

To access the forms mentioned in this section, click this link: 

http://www.mca.gov.in/MinistryV2/companyformsdownload.html


Step 4- Certificate of incorporation

Once you are done filling the three SPICe forms, you have to log in to the portal, and upload them by using the linked in tab. You will have to pay the requisite fee at this stage. Once your registration is approved by the Registrar of Companies (MCA), you will receive the Certificate of Incorporation and you can then begin to conduct your business.