Company is a a legal entity, allowed by legislation, which permits a group of people, as shareholders, to apply to the government for an independent organization to be created, which can then focus on pursuing set objectives, and empowered with legal rights which are usually only reserved for individuals, such as to sue and be sued, own property, hire employees or loan and borrow money. Incorporation / Formation of company involve a number of steps. We have tried to simplify the procedure to the maximum extent possible. Minimum Requirement of a Private Company: Minimum 2 Shareholders Minimum 2 Directors (The directors and shareholders can be same person) Minimum Authorised Share Capital shall be Rs. 100,000 (INR One Lac) DSC (Digital Signature Certificate) for all the Directors (for applying of DIN) DIN (Director Identification Number) for all the Directors Minimum Requirement of a Public Company: Minimum 7 Shareholders Minimum 3 Directors (The directors and shareholders can be same person) Minimum Authorised Share Capital shall be Rs. 500,000 (INR Five Lac) DIN (Director Identification Number) for all the Directors DSC (Digital Signature Certificate) for one of the Directors Brief of procedure / steps to company incorporation: S.No. Procedure Detail 1 Obtain Digital Signature Certificate (DSC) Obtain a Digital Signature Certificate from authorized DSC issuing authority. 2 Obtain Director Identification No. (DIN) [S.153] Make Application in Form DIR-3 [Rule 9 of Chapter XI Rules] 3 Register DSC in the name of Director on MCA portal 4 Apply for Reservation of Name [S.4(4)] Application in Form No. INC.1 [Rule 9]. The same shall be reserved for a period of 60 days 5 Drafting and Printing of Memorandum and Articles of Asociation 6 Filing of INC -7, DIR 12 & INC 22Adoption of Memorandum of Association [S.4(6)]Adoption of Articles of Association [S.5(6)] Discussed Later 7 Commencement of business [S.11] Mandatory to file Declaration with ROC in Form No. INC.21 [Rule 24] 8 Registered Office [S.12] A company shall have a registered office within 15 days of Incorporation and it shall file Form No.INC.22 [Rule 25] to verify the same Step 1: DSC The basic step to company incorporation is to get DSC made of all directors. The Information Technology Act, 2000 provides for use of Digital Signatures on the documents submitted in electronic form in order to ensure the security and authenticity of the documents filed electronically. This is the only secure and authentic way that a document can be submitted electronically. As such, all filings done by the companies under MCA21 e-Governance programme are required to be filed with the use of Digital Signatures by the person authorised to sign the documents. Names of Certification Agency (CA) from where DSC can be acquired are MTNL CA, TCS, IDBRT, SAFESCRYPT (SATYAM), nCODE Solutions, NIC, Central Excise & Customs (Does not issue DSCs to person other than those from the Department), e-Mudhra (3i Infotech Consumer Services Limited). Step 2: Acquire Director Identification Number The concept of a Director Identification Number (DIN) has been introduced for the first time with the insertion of Sections 266A to 266G of Companies (Amendment) Act, 2006. As such, all the existing and intending Directors have to obtain DIN within the prescribed time-frame as notified. INCOME TAX PAN IS MANDATORY, so before applying of DIN a person must have his PAN number. Details on PAN and DIN must be same. Step by step Process Step by step process to be followed by the applicant is as under: As per the revised procedure for DIN Allotment, any person intending to apply for DIN shall have to make an application in eForm DIR 3 and should follow the following procedure: eForm DIR -3 has to follow the offline eFiling process i.e. the form can be downloaded from MCA 21 portal and thereafter be filled up without internet connection. The connection is required only for validating the form. Attach the photograph and scanned copy of supporting documents i.e. proof of identity, and proof of residence as per the guidelines. Physical documents are not required to submit at DIN cell. Identity Proof: In case of Indian nationals, Income-tax PAN is a mandatory requirement for proof of identity. In case of foreign nationals, passport is a mandatory requirement for proof of identity. Proof of identify enclosed with eForm DIR-3 should also contain the date of birth of the applicant and the same should match the date of birth filled in the application form. In case the proof of identify does not indicate the Date of Birth then additional proof of Date of Birth, duly certified/ attested, should be attached. Address Proof: Passport, Election (voter identity) card, and Ration card, driving license, electricity bill, telephone bill or aadhaar All Documents should be verified by CA/CS/CMA. Name of person proposed to be the directors, address of directors and other details should be correctly filed. Issue which arises is that details of Directors as given in DIN should match with that which is filled in INC 7 but it is not necessary that the address in address proof as sent for DSC is same in address proof as required in INC 7. So, here is an analysis: Address Proof as required: PAN Application DIR 3 Inc 7 Aadhaar Card issued by the Unique Identification Authority of India Passport Bank Statement Elector’s photo identity card Election (voter identity) card Electricity Bill Driving License Ration card Telephone Bill Passport Driving License Mobile Bill Passport of the spouse Electricity Bill Post office passbook having address of the applicant Telephone Bill Latest property tax assessment order Aadhaar Domicile certificate issued by the Government Allotment letter of accommodation issued by Central or State Government of not more than three years old Property Registration Document Copy of following documents of not more than three months oldElectricity BillLandline Telephone or Broadband connection bill Water Bill Consumer gas connection card or book or piped gas bill Bank account statement or as per note 2 Depository account statement Credit card statement Certificate of Address in Original signed by a Member of Parliament or Member of Legislative Assembly or Municipal Councilor or a Gazetted officer, as the case may be (in prescribed format) Employer certificate in original (in prescribed format). So, plan accordingly that address required for each of the forms should be the same in atleast one of document required. These documents should not be more than 2 months old. In bank statement, passbook print of transactions in last two months is to be attached. The eForm shall have to be digitally signed and shall be uploaded on MCA21 portal. Upon upload, Pay the fees for DIR 3 eForm. Only electronic payment of the fees shall be allowed (i.e. Netbanking / Credit Card). No challan payment will be accepted under revised procedure of DIN allotment. The applicant is required to get himself/herself registered on the MCA21 Portal to obtain login id, which is necessary for payment of the fees. After obtaining the login-id, Login to the MCA21 portal and click on ‘eForm upload’ link available under the ‘eForms’ tab for uploading the eForm DIR 3. eForm DIR -3 will be processed only after the DIN application fee is paid. Upon upload and successful payment, In case Form DIR-3 is signed by a practicing professional and details have not been identified as potential duplicate, Approved DIN shall be generated and if the details have been identified as potential duplicate, Provisional DIN shall be genrated. In case Form DIR-3 is signed by an applicant or by the Managing Director/ existing director of the Company in which the applicant is a Director or the Company Secretary in full time employment of the Company, or details have been identified as a potential duplicate, provisional DIN shall be generated. Processing of e Form DIR 3 In case, DIR-3 gets certified by the professional ( i.e. CA/ CS/ CWA in whole time practice), the DIN will be approved by the system immediately online(in case it is not potential duplicate). In case of signing by any other signatory (i.e. director/ Managing Director/ secretary of the company with which applicant is to be associated), the MCA DIN cell will examine the e Form DIR-3 and same shall be disposed of within one or two days. After the DIN getting approved, Approval Letter must be downloaded from MCA21. It may be a person has already DIN number, but it mismatches with the Income Tax PAN. If PAN detail is wrong, correct the details by applying to Income Tax Authorities or if details of DIN is wrong, file DIR -6 Director is required to download and fill up eForm DIR-6 for such changes and follow the same process for uploading the same as mentioned for eForm DIR-3. The requested change is taken into the system on verification of the proof enclosed with the application for change request. In the case of change in applicant’s name, gazette notification is must with form DIR-6. Married women, who are having Id proof with their maiden name, can submit marriage certificate along with application. Verification as per Form DIR-7 of Companies Act 2013 also needs to be attached to Form DIR-6 as it is a mandatory attachment now. All documents are to be verified by the professional. There is no fees charged for DIR 6. Form is accepted by STP mode if name, father’s name or date of birth is changed, for other cases, potential duplicacy arises and the form is processed by MCA officials. But, to file DIN -6 for change in DIN particulars, DIFFERENT ADDRESS PROOF IS REQUIRED unlike DIR 3 for application of DIN number. Address proofs like bank statements, electricity bill, telephone bill, utility bills etc. shall be attached. In case of Indian director/ designated partner, documents should not be older than 2 months from the date of filing of the eForm. In case of foreign director/ designated partner, address proof should not be older than 1 year from the date of filing of the eForm. Copy of verification by the director/ designated partner is mandatory to attach if the eForm. In case of proofs which are in languages other than Hindi/ English, the proofs should be translated in Hindi / English from professional translator carrying his details (name, signature, address) and seal. Step 3: Register DSC Third step is to register DSC of the person authorized to sign E-forms on MCA21 or click on the link http://www.mca.gov.in/DCAPortalWeb/dca/MyMCALogin.do?method=setDefaultProperty&mode=36 Step 4: Apply for Reservation of Name [S.4(4)] As per section 4(4) of Companies Act, 2013 read with rule 9 of Companies Incorporation Rules, 2014, application is to be made to registrar for reservation of name. 6 names can be proposed after checking its availability at MCA21 and as per guidelines given in the said rules While applying for a name in the Form INC -1, using Digital Signature Certificate (DSC), the applicant shall be required to verify that: he is a promoter (proposed first subscriber to the MoA) and is authorized by the other proposed first subscribers to sign and submit he application. He has gone through the provisions of Companies Act, 2013, the Rules there under and prescribed guidelines framed there under in respect of reservation of name, understood the meaning thereof. he has used the search facilities available on the portal of the Ministry of Corporate Affairs (MCA) i.e., www.mca.gov.in/MCA21 for checking the resemblance of the proposed name(s) with the companies and Limited Liability Partnerships (LPs) respectively already registered or the names already approved. He has also used the search facility for checking the resemblances of the proposed names with registered or applied trademarks. the proposed name(s) is/are not in violation of the provisions of Emblems and Names (Prevention of Improper Use) Act, 1950 as amended from time to time; the proposed name is not offensive to any section of people, e.g., proposed name does not contain profanity or words or phrases that are generally considered a slur against an ethnic group, religion, gender or heredity (vi) the proposed name(s) is not such that its use by the company will constitute an offence under any law for the time being in force. he has complied with al the mandated requirements of the respective Act/regulator, such as IRDA, RBI, SEBI, MCA etc. (applicable only in case proposed name includes words like Insurance, Bank, Stock Exchange, Venture Capital, Asset Management, Nidhi, Mutual Fund, Finance, Investment, Leasing, Hire purchase etc. or any combination thereof) to the best of his knowledge and belief, the information given in the application and its attachments is correct and complete, and noting relevant o this form has been suppressed. he undertakes to be fully responsible for the consequences, in case the name is subsequently found to be in contravention of Section 4 of the Act, rules made there under and the prescribed guidelines.