Here are the basic points every promoter/entrepreneur should know when forming a private limited company in India:
- Go for a Private Limited company with Rs 1 Lakh Authorized Capital only. To know more about different types of company entities and their pros and cons, click here
- Minimum 2 director’s and/or shareholder’s name you should have, if you have a team then make one of them a director and if you are alone then choose a senior mentor/friend as director if still have a doubt then go for a family member
- Every director should have DIN (Director Identification No.) and at least one director should have DSC (Digital Signature Certificate) to start the process of company incorporation
- You should have 4-5 proposed company names, one of them will be approved on availability and priority basis
- MOA (Memorandum of Association) – it is a document that describes objectives of a company in detail, Authorized Capital and Subscribers to the capital
- AOA (Articles of Association) – it is a document that describes the rules and regulations by which company will be operating
- Company objects should be clear and as much wide to cover future proposed activities also otherwise change in MOA would be required in future
- Company’s registered address must be a permanent address – so promoter should carefully select this Ex: A promoter started company from college/incubation centre and chose this centre as registered address of the company. Soon he left college and went to metro city/home town etc that is generally in other state; now changing company registered address is very tedious and costly task because jurisdiction of company has changed, two states involved
- Keep all original documents (MOA, AOA, Certificate of Incorporation etc.) with you or a trusted person
- Reasonable cost to get register a company is Rs 15k-17k if capital is Rs 1 lakh
- Normally will take 2-4 weeks for incorporation depending on availability of documents and approval from ROC
- Hire a CA/CS for Company formation and hire only CA for Finance/ Tax/Audit matters
DISCLAIMER: Information and Opinion provided in this article are solely that of the author and are not endorsed by FounderMates.com
ABOUT THE AUTHOR
Kapil Sehgal – Kapil is a proprietor at Kapil Sehgal & Associates Chartered Accountants. He is a Director at GetMeCab.com, founder at Dotcom Ventures, and has been a Research Analyst at CRISIL.
He can be reached at +91 98960 38018 and +91 99107 58088. His email id: firstname.lastname@example.org
FOR A FREE CONSULT WITH KAPIL
Kapil can help startups and SMEs with:
- Company / LLP Incorporation,
- Accounting / Bookkeeping,
- Service Tax / VAT / Income Tax / TDS Statutory Audit / Income Tax Audit,
- ROC Filings, SME Funding Business / Share Valuation with Certificate.
Contact Kapil for FREE CONSULT by signing up on FounderMates here.