REGISTRATION OF PRIVATE LIMITED COMPANY
Kinds of Companies
The Companies Act, 2013 is the ‘grunt norm’ when it comes to matters relating to companies. The Companies Act, 2013 provides for three kinds of companies. They are as follows:
- Public Limited Company: It has a minimum paid-up share capital of Rs. 5,00,000/- and requires minimum seven members to form a public limited company. Public Companies do not restrict transferability of shares. It does not have a cap on maximum number of members of the Company.
- Private Limited Company: It can be started with minimum two members and can have maximum of 200 members. Minimum share capital of Rs. 1 lakh is needed to start a private limited company. It prohibits invitation or acceptance of public deposits.
- One Person Company: In these companies, one man holds the entire share capital of the company. This kind of companies can be started with minimum one member.
Registration of Companies
Registration is a process involved during the incorporation of the company. Registration of the company also helps to raise fund. The companies which are registered, find it easy to raise funds, as they appear to be authentic and not fraudulent.
Process of Registration of Private Limited Companies
- Obtain Digital Signature Certificate (DSC): The first and the foremost step is to obtain ‘Digital Signature’. The Companies Act, 2013 requires to file certain documents along with the digital signature of Managing Director/ Director. Therefore, it has become necessary to obtain digital signature certificate (DSC) from an authorised authority.
- Obtain Director’s Identification Number: Secondly, obtain a Director’s Identification Number (DIN). This is a mandatory requirement under section 153 of the Companies Act, 2013. All the persons proposed to be appointed as a Director should ensure that they have DIN No. as it has to be filed with the Central Government in the prescribed manner.
- Proper Name: Thirdly, name of the company is to be decided. It should not be similar to any other company in the market and should not be of such a character so as to deceive customers. The name should not include words like ‘Bharat’, ‘Hindustan’ etc. as they represent government entity or a public entity. After deciding the name of the Company, the same should be approved by the Registrar of Company (ROC). If the ROC does not approve, then other name is to be decided; and if it is approved then, further move on to make Articles of Association.
- Draft Memorandum of Understanding and Articles of Association: Fourth step is to prepare Memorandum of Association and Article of Association. They form the constitution and by-laws of the Company respectively. They are the most important documents required during registration of the Company. They are the Charter and the internal rules and regulations of the Company. It must be drafted with utmost care and with the advice of the experts.
After complying with the above four requirements, one can apply for Certificate of Incorporation. The basic requirements of digital signature certificate, director’s identification number, approval of name by ROC and Memorandum of Understanding (MOU) and Articles of Association (AOA), must be fulfilled and then company applies for registration, and thereby to obtain a certificate of incorporation. After all the documents are approved by the ROC, the company is registered with Ministry of Corporate Affairs.
Therefore, these are the basic requirements to be fulfilled while dealing with the registration of private limited company.
Author: This blog is written by Ms. Raina Verma, student of SVKM’s NMIMS School of Law, Mumbai, a passionate blogger & intern at Aapka Consultant.
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