Company Formation Process

The most useful type of business entity in India is a Private Limited Company. Private Limited Company can be incorporated with a minimum share capital of INR 1, 00,000. It requires minimum Two Directors and Two Shareholders. Shareholders can be from any country or nationality and can be any Company or Individual. Director should be an Individual and at least 1 Director should be an Indian nationalist.

The following are the steps involved in the incorporation of an Indian Private Limited Company for Foreign nationals:

Obtaining Digital Signature

For the Security or authenticity of documents filed electronically demands a valid Digital Signature. Digital signature is required for filling the incorporation documents and for complies of day to day compliance for a company. Digital signature must be obtained for all the proposed directors of the company.

Following are the documents required for obtaining Digital Signature for a Foreign National:

  1. Foreign nationals are residing in native country
    • If native country is a signatory of Hague Convention:For attestation, proof of identity, address proof and photo on DSC application should be notarized by the Public Notary of that foreign country and apostilled by the competent authority of that foreign country.
    • If native country is not a signatory of Hague Convention:For attestation, proof of identity, address proof and photo on DSC application should be notarized by the Public Notary of that foreign country and consularized by the competent authority of that foreign country . Documents required: Passport, Application form with Photo (all attested).
  2. Foreign nationals residing in India
    • The following documents should be certified by Individual’s Embassy
      • Resident Permit certificate issued by Assistant Foreigner Regional Registration. Officer, an officer of Bureau of Immigration India.
      • Passport
      • Visa
      • Application form with Photo(attested)
  1. Foreign nationals neither in India nor in the native country
    • The following documents should be certified by the local embassy of the country to which the person belongs:
      • Passport
      • Visa
      • Application form with Photo(attested)

Obtaining Director Identification Number (DIN)

As per companies Act 2013, Director Identification Number is required for every person who intends to become a Director in Indian Company. DIN must be obtained for all the proposed Directors.

Obtaining Name Approval

On successful allotment of DIN number promoters are required to finalize proposed name for the company. Name itself be able to explain the main object of the company. Name should be finalized as per the name guidelines issued in the companies act 2013.

Promoters are permitted to provide any six proposed name for the company. Any name out of six as per the availability can be approved by the Registrar of Companies.

Preparation of Documents and Subscription of MOA and AOA

  • Once name approval obtained, Incorporation Documents to be prepared by the promoters. Following documents need to be prepared:
  • Memorandum of Association
  • Article of Association
  • Form INC-8 (Declaration of a Chartered Accountant Pursuant to section 7(1)(b) and Rule 14 of Companies (Incorporation) Rules, 2014)
  • Form DIR 2 ( For every Director Pursuant to section 152(5) and Rule 8 of Companies (Appointment and Qualification of Directors)Rules, 2014)
  • Form INC-10 (For every Director Pursuant of Rule 16(1)(q) of Companies (Incorporation) Rules, 2014)
  • Form INC-9 (Affidavit from every Director Pursuant to section 7 (1)(c) of the Companies Act, 2013 and the rule 15 of the Companies (Incorporation) Rules, 2014)
  • Rent agreement/ Address Proof of proposed Registered Office of the company with NOC from the Landlord.
  • PAN and Address proof of all the Proposed Directors.
  • Appointment Letter for all the Proposed Directors.

Subscription of MOA and AOA

After Finalization of MOA & AOA, subscription of MOA & AOA should be done. By subscribing to the MOA & AOA, the proposed shareholders (either foreign companies or foreign nationals or Indian companies or Indian national) show their intention for becoming a shareholder in the Proposed Company.

In case a foreign national is signing the MOA & AOA Subscriber Sheet in India:

  • In case a foreign national is signing the subscriber sheet of the MOA & AOA in India: Then the signature of the foreign Director must be verified by the public notary of that country or by the Officers of the Embassy. A copy of a valid business visa to India must be attached.

In case a Foreign National is signing the MOA & AOA Subscriber Sheet while residing outside of India:

  • The residing country is a Commonwealth Nation: Then the signature of the Director, identity proof and address proof must be notarized by a Notary in that part of the Commonwealth.
  • The residing country is a party to the Hague Apostille Convention: Then the signature of the Director, identity proof and address proof must be notarized by a Notary of the country of his origin and duly apostillised in accordance with the Hague Convention.
  • The residing country is neither a Commonwealth Nation nor a Party to the Hague Convention:Then the signature of the Director, identity proof and address proof must be notarized by a Notary of the country and the certificate of the Notary must be authenticated by a Diplomatic or Consular Officer.

In case a Foreign Company is a subscriber to the MOA & AOA of the proposed Indian Company:

The following documents pertaining to the foreign entity subscribing to the shares of the Indian Company must be submitted:

  • Board resolution of the Foreign Entity authorising investment in shares of the Indian Company.
  • Copy of the certificate of incorporation of the foreign entity.
  • Copy of address proof for the foreign company.

Filling of Incorporation Form to Concerned ROC

After completion of all the Documents following forms should be file electronically with concerned ROC

  1. Form No INC-32 i.e. Spice (Simplified Performa for Incorporating Company Electronically)
  2. Form No INC-33 i.e. Spice MOA (e-Memorandum of Association)
  3. Form No INC-34 i.e. Spice AOA (e-Article of Association)

Application of PAN and TAN

On submission of all Incorporation forms, promoters have to file Form 49A for Permanent Account Number (PAN) and Form 49B for (Tax Deduction Account Number (TAN) electronically.

On submission of all the Forms the Registrar would issue a Certificate of Incorporation for the Indian Private Limited Company with PAN and TAN, if the documents submitted are acceptable.

FLOW CHART FOR COMPANY FORMATION

START

  1. Obtaining Digital Signature Certificate for all the Proposed Directors from certifying authority
  2. Obtaining Directors Identification Numbers for all Proposed Directors after Filling form DIR-3
  3. Obtaining approval for the proposed Name of the Company from the ROC on payment of prescribed Fee after Filling form INC-1
  4. Drawing up MOA & AOA and Preparation of all required forms and documents
  5. Subscription of MOA & AOA by subscribers and Procurement of an office premises for registration
  6. Filling of Incorporation form INC-32, 33, and 34 with Concerned ROC
  7. Filling of Form 49A for PAN and Form 49B for TAN
  8. After Successful obtain Certificate of Incorporation (COI) with PAN and TAN

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