Companies today have assumed great importance in our society. Generally, a company denotes an association of like-minded persons formed to carry on some business or undertaking. A company is a corporate body and the legal person having status and personality distinct and separate from the members constituting it. It is called the body corporate because the persons composing it are made into one body by incorporating it according to the corporate laws and clothing it with legal personality. For this reason, sometimes called an artificial legal person as it is a combination of a legal entity and a corporate that is capable of enjoying many rights and includes many liabilities of a natural person. In the legal sense, a company is an association of both an artificial and a natural person incorporated under the country's existing law, the Companies Act 2013 in India.
A company incorporated under the Companies act 2013 is vested with the corporate personality. Hence, it bears its own name, acts under its name, and has a seal of its own, and its assets and liabilities are separated and distinctive from those of its members. It is a different person from the members who composed it. Incorporation is the Act of forming a legal corporation as a juristic person where rights and obligations are conferred and dealt with in accordance with the law.
There can be different types of companies like one-person companies(OPC), public limited companies, private limited companies, limited liability partnerships (LLP) and foreign companies, etc. All these companies can be incorporated as per the need and capital of the business owner.
The following steps are necessary to incorporate a company in India
As per section 33 of the Companies Act, 2013, a company to get itself registered has to apply to the Registrar of Companies(ROC) along with certain documents like the Memorandum of Association (MOA) and the Articles of Association (AOA). There are the following seven steps involved in the Incorporation of a company as per the Companies Act 2013:-
Step 1: Application for the availability of the name of the company
A person has to make an application in Form No. 1A along with a prescribed fee stating the proposed name of the company. Keeping in mind the name stated shall not be similar or identical to the name of an already existing company, be desirable in the view of Central Government and should not constitute an offence under any law in force and any word or expression which is likely to give the impression that company in any way is connected with the Central Government or State Government should not be taken. The registrar reserves the name for 20 days if all the documents and information are in place.
Step 2: Preparation of the documents for Incorporation
Once approval for the name is received applicant has to prepare some documents :
- INC-9 - Declaration by first subscribers and the directors of the company
- DIR-2 - Declaration from directors along with a copy of identity proof and residence address
- Proof of office address
- Copy of utility bills like electricity bills and water bills which should not be older than two months
Step 3: Filing of the information form
Once all the documents are available, the applicant has to fill in the e-form "Spice" INC-32 on the Ministry of Corporate Affairs(MCA).
Its features are:-
- The maximum limit for subscribers is 7 if more subscribers physically signed MOA and AOA should be attached.
- Maximum details for directors are 20
- Maximum 3 directors are allowed for the filing of allotment of DIN.
- Applying for PAN/TAN will be compulsory.
Step 4: Preparation of Memorandum Of Association and Articles Of Association
After proper filling of the SPICE form applicant has to download the e-form INC-33 (MOA) and IN-34 (AOA) from the MCA website. It should be prepared as per the requirement of Table A to J of Schedule 1. MOA and AOA shall be signed by each subscriber to the memorandum, adding their name, address, description and occupation in the presence of at least one witness.
In the case of a body corporate, the MOA and AOA shall be signed by its director, officer or employee, whereas an LLP partner should do LLP.
Step 5: Fill in details of PAN and TAN
It is mandatory to mention the details of PAN and TAN in the Incorporation Form INC-32.
Step 6: Submission of INC-32,33,34 on MCA
Once all the 3 forms are ready to upload on the MCA website, make the payment for the same as required on the Ministry of Corporate Affairs website.
Step 7: Certificate of Incorporation(CIN)
The registrar shall act based on all documents & information issue a certificate of Incorporation. On and from the Incorporation, the Corporate Identification Number (CIN) will be generated with PAN and TAN.
Advantages of an Incorporated Company:
- The company gains a perpetual succession.
- It gets independent existence of its own
- Limitation of liability forms a significant advantage of an incorporated company.
- It gains its own official seal.
- Capacity to sue and to be sued in its name
- The status of Incorporation gives them professional management.
- All the Movable and Immovable property of the company is vested in the name of the company itself.
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A Certificate of Incorporation given by the Registrar shall be conclusive evidence that all the Act requirements have been complied with in respect of registration and that the association is a company authorized to be registered under the Act. The validity of the registration cannot be questioned after the issue of the incorporation certificate. Only where the object of a company is unlawful is the registration not held to be conclusive. But if any wrong is done by the directors or members of the company, it doesn't hold any responsibility on their behalf.
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Author: Gouri Menon