COMPANY REGISTRATION CHENNAI

FOREIGN INVESTMENT IN INDIA

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What other approvals are required for foreign investor in India?

Generally, prior approval is required from the RBI before investing in India. Some categories of businesses are covered under automatic approval process. However, one has to apply for the same. There are some post-incorporation filing formalities after the remittance of capital from overseas to India and on issue of shares.

What are other formalities before or after incorporation?

Obtaining Permanent Account Number (PAN) from Income Tax Department
Obeying Shop and Establishments Act
Registration for Import Export code from Director General of Foreign Trade
Software Technologies Parks of India registration (STPI) if required
RBI approval for foreign companies investing in India and FIPB approval, if required.
The directors of an Indian company, both Indian and foreigner directors, are required to obtain Director Identification Number - DIN and Digital Signature Certificate - DSC

For More Information on other formalities in India click here

What are the requirements for issuing Sweat Equity in an India Company?

Can an Indian company can issue sweat equity? There are separate rules for sweat equity in a private company in India and a public company in India.

Sweat Equity in a private company in India

The provisions for issue of Sweat Equity are covered under Section 79A of the Companies Act. It provides that a company may issue sweat equity shares of a class of shares already issued if the following conditions are fulfilled:

the issue of sweat equity shares in authorized by a special resolution passed by the company in the general meeting.
The resolution specifies the number of shares, current market price, consideration, if any, and the class or classes of directors or employees to whom such equity shares are to be issued.
not less than one year has, at the issue elapsed since the date on which the company was entitled to commence business.
The sweat equity shares of a company whose equity shares are listed on a recognized stock exchange are issued in accordance with the regulations made by the Securities and Exchange Board of India in this behalf.
In view of the above provisions, you can't issue Sweat Equity at the time of incorporation of your Company as one year has not elapsed since the date on which the company was entitled to commence business.

In addition to the above provision, other regulatory provisions are applicable for issuing sweat equity shares for a private company in India. Please feel free to Contact us for further information about sweat equity in an Indian company.

Sweat Equity in a public company in India

The aforesaid provisions regarding issuing of Sweat Equity under Section 79A of the Companies Act are applicable to a public company in India.The sweat equity shares of a company whose equity shares are listed on a recognized stock exchange are issued in accordance with the Securities and Exchange Board of India (Issue of Sweat Equity) Regulations, 2002. Please feel free to Contact us for further information about sweat equity in an Indian company.

What are the requirements for a Foreign company forming a subsidiary in India?

A foreign company planning to form a subsidiary in India, in addition to meeting all requirements of forming a company, is required to seek governmental approval before investing in India. Some approvals are automatic, - RBI Approvals - though application is required for those approvals. Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed. See our FDI in India Sector wise Guide for more information on various conditions of investing in India. Also see Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties & the Joint Ventures in India. Also see Entry Strategies in India for Foreign Investors

What are the requirements for a Foreign company opening a branch in India?

Foreign investors are required to seek governmental approval before investing in India. Some approvals are automatic, - RBI Approvals - though application is required for those approvals. Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed. See our FDI in India Sector wise Guide for more information on various conditions of investing in India. Also see Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties. Also see Entry Strategies in India for Foreign Investors

What are the requirements for a Foreign company forming a joint venture in India?

Foreign investors planning to form a joint venture in India are required to seek governmental approval before investing in India. Some approvals are automatic, - RBI Approvals - though application is required for those approvals. Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed. See Joint Ventures in India. Also see FDI in India Sector wise Guide for more information on various conditions of investing in India. Also see Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties. Also see Entry Strategies in India for Foreign Investors

What are the requirements for an American company planning to establish business in India?

An American or USA company planning to open business in India - subsidiary, branch, or joint venture - should meet all the requirements mentioned here. It is also required to seek governmental approval before investing in India. Some approvals are automatic, - RBI Approvals - though application is required for those approvals. Special Permission - FIPB Approvals - could be obtained to invest over and above the regular percentage allowed. See our FDI in India Sector wise Guide for more information on various conditions of investing in India. Also see Withholding Tax Rates For Foreign Companies Doing Business In India Under The Tax Treaties & the Joint Ventures in India. Also see Entry Strategies in India for Foreign Investors

What are the compliance requirements for Companies in India?

All the companies who are related cyber business are required to comply with the requirements of the law. In addition, all the Multinational Companies Doing Business in India and having cyber involvement are required to comply with the corporate and other laws of India including cyber law compliance.The cyber law mandates all companies to have an information technology security policy. This documents the architecture of the network, the roles and responsibility of employees, security parameters and authorization required for data access, among other things. Other compliances that are required include relate to retention and authentication of electronic records and security of data.Moreover, Indian Information Technology Act of 2000 provides for further personal liabilities. For example, Section 85(1) of the IT Act provides that where a person committing a contravention of any of the provisions of this Act or of any rule, direction or order made there under is a Company, every person who, at the time the contravention was committed, was in charge of, and was responsible to, the company for the conduct of business of the company as well as the company, shall be guilty of the contravention and shall be liable to be proceeded against and punished accordingly.All the Indian companies and all foreign companies doing business in India, either directly or indirectly, should comply with this law.

What are the Requirements for a Private Limited Company?

A Registered Business Name: This must be followed by the word ‘Limited' or ‘Ltd'. The Companies Registration Office exercises some control over the choice of name, it cannot be identical (or very similar to) the name of an existing company. It won't be considered if it is offensive or illegal and the use of certain words in a company (for example, `Institute', `National') can only be used in certain circumstances. The company name must be displayed in a conspicuous place at every office, or other premises where the company carries out business.

A Registered Office: This need not necessarily be the same address as the business is conducted from. Quite frequently the address used for the registered office is that of the firm's solicitor or accountant. This is the address, through, where all official correspondence will go.

Shareholders: There must be a minimum of two shareholders (also described as `members' or `subscribers'). A private company can have up to fifty shareholders.

Share Capital: The company must be formed with a stated, nominal share capital divided into shares of fixed amounts. Small companies are frequently formed with a nominal share capital of Rs.100.

Memorandum of Association: The memorandum is the company's charter. It states the company's name; the situation of its registered office; its share capital; the fact that liability is limited and, most importantly, the object for which the company has been formed. In theory, the company can only operate in the areas mentioned in the objects clause but in practice the clause is drawn to cover as wide an area as possible, and anyway a 75 per cent majority of the members of the company can change the objects whenever they like. Nevertheless, it is worth bearing in mind that directors of the company will incur personal liability if the company engages in a type of business which is not authorised by the objects clause. The memorandum must be signed by at least three shareholders.

Articles of Association: The document contains the internal regulations of the company, the relationship of the company to its shareholders and the relationship between the individual shareholders. Many companies don't bother to draw up their own articles but adopt (sometimes with some modifications) articles set out in the Companies Act.

Certificate of Incorporation: This is the document, which the registrar of companies issues to you once he has approved your choice of name and your memorandum. When you receive this document your company legally exists and is ready to trade.

Auditors: Every company must appoint a qualified auditor. The auditor's duty is to report to the treasurer whether or not the books of the company have been properly kept, and that the balance sheet and profit and loss account presents (or doesn't present) a true and fair view of the company's affairs and complies with the Companies Act. Auditors are appointed or re-appointed at general meetings at which annual accounts are presented, and they hold office from the conclusion of the meeting until the next general meeting.

Accounts: The Companies Act lays down strict rules on accounting. Every company must maintain a set of records, which show the financial position at any one time with reasonable accuracy. The accounts comprise a profit and loss account and balance sheet with the auditors' and directors' reports appended. A new company's accounting reference period begins on its incorporation and runs until the following 31st March - unless the company notifies the registrar of companies otherwise. Within ten months of the end of an accounting reference period, an audited set of accounts must be laid before the shareholders at a general meeting and a set delivered to the registrar of companies.

Registers, etc.: In addition to the accounts books, companies are required to have: a register of members and share ledger; a register of directors and secretaries; a register of share transfers; a register of charges; a register of debenture holders; a book can be purchased to hold all of the above. This will be provided automatically if you buy a running concern.

Company Seal: All companies must have an engraved seal. This must be impressed on share certificates and must be used whenever the company has to execute a deed. Again, this is included in the ready-made company package.

PROCEDURES AND FORMALTIES TO FORM A COMPANY IN INDIA

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What is the minimum paid-up capital of a Private Limited Company?

The minimum paid up capital at the time of incorporation of a private limited company has to be Indian Rupees 1,00,000 (about United States Dollars 2,250). There is no upper limit on having the authorized capital and the paid up capital. It can be increased any time, by payment of additional stamp duty and registration fee.
What is the difference between authorized capital and paid up capital?

The authorized capital is the capital limit authorized by the Registrar of Companies up to which the shares can be issued to the members / public, as the case may be. The paid up share capital is the paid portion of the capital subscribed by the shareholders.

What is the procedure in obtaining a name approval for the proposed Company?

An application in Form No. 1A needs to be filed with the Registrar of Companies (ROC) of the state in which the Registered Office of the proposed Company is to be situated. The application is required to be signed by one of the promoters. The details to be state in the said application are as follows:1. Four alternative names for the proposed company. (The name can be coined names from the objects of the proposed company or the names of the directors, etc. but should definitely be indicative of the main object of the company. Justification for the name needs to be specified along with the application)2. Names and addresses of the promoters (Minimum 7 for a public company while 2 for private company).3. Authorized Capital of the proposed company.4. Main objects of the proposed company.5. Names of other group companies. On submitting the application, the ROC scrutinizes the same and sends the approval / objections in about 10 days to the applicant. On fulfilling of the objections a formal letter of name approval is issued.

What is the Memorandum of Association (MOA) and the Articles of Association (AOA) of a company and what is the procedure in their regard?

A stamp duty is required to be paid on the MOA and on the AOA. The stamp duty depends on the authorized share capital.

On receipt of the name approval letter from the ROC the MOA and the AOA are required to be drafted. The MOA states the main, ancillary / subsidiary and other objects of the proposed company. The AOA contains the rules and procedures for the routine conduct of the proposed company. It also states the authorized share capital of the proposed company and the names of its first / permanent directors. After the MOA and AOA are required to be stamped.

What are the documents required to be executed for incorporation?

The following documents are required to be executed (signed) before they are submitted to the ROC:

1. MOA and AOA - These are required to be executed by the promoters in their own hand in the presence of a witness in quadruplicate stating their full name, father's name, residential address, occupation, number of shares subscribed for, etc.

2. Form No. 1 - This is a declaration to be executed on a non-judicial stamp paper of INR 20 by one of the directors of the proposed company or other specified persons such as Attorneys or Advocates, etc. stating that all the requirements of the incorporation have been complied with.

3. Form No. 18 - This is a form to be filed by one of the directors of the company informing the ROC the registered office of the proposed company.

4. Form No. 29 - This is a consent obtained from all the proposed directors of the proposed company to act as directors of the proposed company. (Not required in case of private company).

5. Form No. 32 - This is a form stating the fact of appointment of the proposed directors on the board of directors from the date of incorporation of the proposed company and is signed by one of the proposed directors.

6. Name approval letter in original.

7. Power of Attorney signed by all the subscribers of MOA authorizing one of the subscribers or any other person to act on their behalf for the purpose of incorporation and accepting the certificate of incorporation.

8. Power of Attorney in case of a subscriber who has appointed another person to sign the MOA on his behalf.9. Filing fees as may be applicable.

How is the certificate of incorporation issued?

After the documents in FAQ 5 are filed, the ROC calls the attorney on a specific date for scrutiny and making the corrections in the MOA and AOA filed. On complying with the same, the certificate of incorporation is granted to the attorney.

When can the newly formed company start its business operations?

On receipt of the certificate of incorporation, the public company has to complete certain other legal formalities such as a statutory meeting (within 6 months), statutory report, etc. On completion of the said formalities and on filing of the statutory report with the ROC the ROC issues the certification of commencement of business to the company. Thereafter, the Public Company can start the business operations. The Private Company can start its business immediately on incorporation.

How do we comply with the legal formalities when we are not stationed in India?

You can give Power of Attorney to a person to sign the documents on your behalf. After the Company is incorporated, you can appoint Alternate Directors, to function on your behalf while you are not in India. But at least once, you should be in India within one month of the incorporation of the Company. There can be one meeting of Board of Directors during your stay in India and all other formalities including those of appointment of Alternate Directors can be complied with.

DOING BUSINESS IN INDIA

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What are the type of Business Entities Available in India?

The following types of Business entitles are available in India:

Private Limited Company
Public Limited Company
Unlimited Company
Partnership
Sole Proprietorship

In addition to the above legal entities, the following types of entities are available for foreign investors/foreign companies doing business in India:

Liaison Office
Representative Office
Project Office
Branch Office
Wholly owned Subsidiary Company
Joint Venture Company

What is a Private Limited Company?

A Private Limited Company is a Company limited by shares in which there can be maximum 50 shareholders, no invitation can be made to the public for subscription of shares or debentures, cannot make or accept deposits from Public and there are restriction on the transfer of shares. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 2.

What is a Public Limited Company?

A Public Limited Company is a Company limited by shares in which there is no restriction on the maximum number of shareholders, transfer of shares and acceptance of public deposits. The liability of each shareholder is limited to the extent of the unpaid amount of the shares face value and the premium thereon in respect of the shares held by him. However, the liability of a Director / Manager of such a Company can at times be unlimited. The minimum number of shareholders is 7.

What are the advantages of a Limited Company?

A limited company has following advantages:

Members' (the directors and shareholders) financial liability is limited to the amount of money they have paid for shares.
The management structure is clearly defined, which makes it easy to appoint, retire or remove directors.
If extra capital is needed, it can be raised by selling more shares privately.
It is simple to admit more members.
The death, bankruptcy or withdrawal of capital by one member does not affect the company's ability to trade.
The disposal of the whole or part of the business is easily arranged.
High status.

What are the disadvantages of a Limited Company?

A limited company has following disadvantages:

Requirement to register the company with the registrar of companies and provide annual returns and audited statement of accounts. All details of the company are available for public inspection so there can be no secrecy. There are penalties for failing to make returns.
Can be more expensive to set up.
May need professional help to form.
As a director, you are treated as an employee and must pay tax.
The advantages of limited liability status are increasingly being undermined by banks, finance house, landlords and suppliers who require personal guarantees from the directors before they will do business.

What entity is best suited?

The choice of entity depends on circumstance of each case. Private Limited Company has lesser number of compliances requirements. Therefore, generally where there is no requirement of raising of finances through a public issue and the ownership is intended to be closely held by limited number of persons, Private Limited Company is the best choice.

What is the minimum paid-up capital of a Private Limited Company?

What is the difference between authorized capital and paid up capital?

What is the procedure in obtaining a name approval for the proposed Company?

DIGITAL SIGNATURE

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PAN in Digital Signature needed for ITR filing purpose effective from Aug 1 2010

For the purpose of Income Tax Return filing, "Controller of Certifying Authorities" has amended the procedure to include "Permanent Account Number" in Digital Signatures.

1. This change is with effect from August 01, 2010.

2. PAN is a NEW additional field in digital signature.

3. The old DSC may not contain this value, even though if you had given PAN
    while availing DSC before 01/08/2010.

4. PAN is optional, and DSC can be issued even without PAN. If the n
    subscriber (user) intends to have PAN in it, he/she has to specifically
    intimate the issuer.

ITR filing with DSC:

In ITR e-filing website, filing with Digital signature remains almost similar. That is,

1. Register the DSC for particular login

2. Re-Select the same DSC while uploading the XML

Earlier procedure:

DSC was not containing the encrypted PAN value of the assessee. So, in case of firms/companies, while registering the DSC at the website, it should have got at least one earlier ITR XML uploaded/accepted and "name of DSC holder" should match with any of the director/key-person list in earlier accepted-XML return. [In case of individuals, name should match with "PAN Name in ITD database" and email ID in DSC should match with email ID in website profile]

Further while uploading the XML, the selected DSC number (unique number of DSC stored in website while registering) should match with the one used for registering. Secondly, "name of DSC holder" should match with the "Name in ITD database" for the PAN mentioned in verification part of ITR-5/6.

Major limitation here was for first-time digitally signing assessee, where he should have earlier return. Further "Matching of name" was practical problem reported by several assessees.

New procedure:

The above limitations have increased due to mandatory Digitally signing of ITR-6. To overcome this issue, CCA, through the request from ITD, has introduced a new filed in DSC issuing. In this, DSC can have PAN encoded in itself, so that it can help ITR filing.

While registration, it asks the user to enter the PAN. This PAN should match with the DSC encrypted PAN. (No other matching is done here). While uploading, selected-DSC should have the encrypted PAN matching with the PAN mentioned in ITR verification part.

With effect from:The technical guidelines were issued by CCA, as early as at Dec-2009. With effect from August 2010, all Certifying authorities may issue DSC with encrypted PAN.

1. Assessees can also use earlier DSC, which has no encrypted PAN. In such case, "name matching" system continues as earlier.

2. Assessees, at their interest, can contact their current certifying authorities for upgradation / re-issue of DSC with the encrypted PAN. The certifying authorities can follow their own procedures for this purpose.

New Company Registration in Tamil Nadu

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New Company Registration is the basic step, which will define the structure of a business and make it an entity enjoying legal acceptability. This way, the business can begin its operations in India & across the globe.

We offer new company registration, new company formation, limited company registration, online company registration, foreign company registration services in Tamil Nadu. Our aim is to improve international understanding about new company registration process, which is provided by us to register new companies in India & across the globe. We also value your time and money therefore considering this, we offer you relevant and required information about new company registration to achieve your business objectives and goals.
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FOR MORE INFORMATION PLEASE CONTACT

New Company Registration in Tamil Nadu

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IEC Export Code

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The IEC Code (Import Export Code Number) is a unique 10 digit code essentially needed by the exporter and importer for the purpose of import and export in India. No exporter or importer is permitted to carry out any type of trade activity without this IEC Code Number. Compulsory Documents for the application for obtaining the IEC Code, sent to the Joint Director General- Foreign Trade include the following:

Application in Duplicate (Aayaat Niryaat Form).
Copy of Tax ID Allotment. This document has to be produced in original at the time of submission of the application form.
Two photo's of the Director preferring the application certified by the Banker's along with Name and Designation of the Banker verifying the photograph and the official stamp of the bank, should be affixed on to the application form.
Bank's Certificate regarding satisfactory account maintenance. It should include the Signatures, Name, and Designation of the Banker issuing the certificate, together with the official stamp of the bank.
Fee of INR 1000.
Attested copies of the Memorandum of Association & Articles of Association of the Company in Duplicate.
Authority Letter with photograph and the signatures of the person authorized to submit the application, which is to be attested by the director authorized by the company to file the application for IEC Code No.
Certified true copy of a board resolution authorizing the referred person to sign the application on behalf of the company, and the signatures of the person authorized should also be there on the Board resolution, along with the signatures of the person certifying the board resolution.
List of Directors along with a copy of passport.
One Self Addressed Envelope.
Address Proof of the registered office of the company, and in case the company has a number of units then address proof of all the units.

VAT Registration

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Value added tax (VAT), is a sales tax levied on the sale of services and goods. VAT is an indirect tax, which is collected from someone other than the person who actually bears the cost of the tax. Personal end-consumers of s services and products cannot recover VAT on purchases, but businesses are able to recover VAT where they use the supplies that they receive that bear VAT to make further supplies that also bear VAT. VAT registration is essential depending on your sales turn over and other business parameters. Along with VAT registration, we look after registration with excise and customs also. VAT registration and VAT returns submissions are also carried out through our panel of experienced tax experts.

MANDATORY REGISTRATION

Who must apply for registration?

Every dealer is required to apply for registration, if: -

The dealer's turnover in the year preceding the commencement of this Act exceeded the taxable quantum; or
the dealer's turnover in the current year exceeds the taxable quantum; or
Regardless of the taxable quantum, the following dealers must apply for registration, if :-
You make any interstate sale; or
You make interstate purchases for resale in Delhi.

HOW TO CALCULATE MY TAXABLE TURNOVER?
Taxable turnover is the aggregate total of sale prices of all taxable goods including goods taxable at zero rate. Sale price of goods and transactions exempted and VAT charged on taxable sales do not form part of Taxable Turnover. "Taxable quantum" of a dealer is five lakh rupees, or such other amount as may be specified by the Government by notification in the official Gazette.

a dealer who imports for sale any goods into Delhi, the taxable quantum shall be "Nil" or such other amount as may be specified by the Government by notification in the official Gazette.
The taxable quantum of a dealer shall not include turnover from:-
Sales of capital assets;
sales made in the course of winding up the dealer's activities; and
sales made as part of the permanent diminution of the dealer's activities.
In case of dealers involved in execution of works contracts, the taxable quantum shall be calculated with reference to the total contract amount received. you deal entirely in exempt goods, you are not required to apply for registration under DVAT. In which capacity you register yourself.

It is the person, NOT the enterprise, who is registered for VAT. The person is only registered once for all enterprises/branches/divisions carried on unless permission is granted to register them separately.

The term dealer includes :-

Sole proprietor (individual)
Partnership
Hindu undivided family
Club, Society or Association
Incorporated/unincorporated body of persons
Corporation / company
Association not for gain
Welfare organization / trust
Local authority and certain public authorities

WHEN CAN I REGISTER FOR VAT ON A VOLUNTARY BASIS?

In addition to the regular registration, the Act allows a person to take voluntary registration for VAT. You can register yourself under VAT voluntarily i.e. even if you are not liable to register under VAT Laws. You will have to charge VAT on all your taxable sales and keep all the records, which all taxpayers must keep. You will be allowed to reclaim input VAT on your purchases and expenses. You will need to think carefully about the advantages and disadvantages of being registered.

You may apply for voluntary registration even though the value of taxable supplies in the course or furtherance of your enterprise is below the limit of threshold per annum. It may be in your interest to register if you make supplies of goods or services mainly to other vendors. Before applying for voluntary registration you should, however, consider the obligations/implications of registration. You may, however,
a) Claim a credit for input tax
b) Issue tax invoices to customers who are vendors.
Registration is not available to persons who make only exempt supplies.

WHAT FACTORS DO I HAVE TO CONSIDER IN DECIDING WHETHER TO APPLY FOR VOLUNTARY VAT REGISTRATION?

In considering whether you should register voluntarily for VAT, you should ask yourself these questions:
Do I make taxable sales to other VAT dealers?If you are not registered for VAT you cannot issue tax invoices on which your customer (VAT dealer) can claim credit for the tax. Your customer will therefore have to charge a higher price for his sales if he cannot claim a credit for the VAT. In this case he might choose to trade with another VAT dealer and you would lose business.

Do I trade, primarily with non-VAT dealers/consumers?In this case, it is likely to be in your interest not to register for VAT.

What are the obligations of VAT registration?
Once registered, you will have to account for output tax that is attributable to your taxable sales. You will also have to submit VAT returns monthly to the Commercial Taxes Department and keep proper books of accounts.

If you decide to register voluntarily, the Law requires that you must remain registered for VAT for a period of 24 months regardless of your taxable turnover.

Is my input tax credit likely to exceed the tax on the sales I make?
In this case you will benefit from VAT registration.

When do I start to charge VAT?

You should start keeping VAT records and charging VAT to your customers from the date notified to you by the Commercial Taxes Department. This will be the date shown as the effective date of your registration on your Certificate of Registration. You will have to account for VAT from that date.

What are my obligations as a VAT registered taxpayer?Display your certificate of registration.
Charge VAT on all taxable transactions from the date of registration.

Issue tax invoices.
Keep accurate and up to date books and records and make it available for inspection by VAT auditors.
Submit a declaration to the local VAT office each month.Pay the tax due each month.

VAT REGISTRATION PROCEDURE

A dealer who is required to apply for registration shall make an application for registration to the Commissioner in Form DVAT-04 within a period of thirty days from the date of his becoming liable to pay tax under the Act and shall pay the filing fee as prescribed in Annexure 1 to the VAT rules.

DOCUMENTS REQUIRED FOR VAT REGISTRATION

The application for registration is to be accompanied by the following:

1) Deposit receipt of prescribed amount towards fees for registration. Such deposit receipt is to be obtained from the appropriate treasury after payment of the fee amount.
2) Copy of the constitution document e.g. Partnership deed for a partnership firm, Memorandum and Articles of Association for a company.
3) Board Resolution authorizing the signatory to sign the application in case of company.
4) Proof of identification of the authorized signatory e.g. voter identity card, passport, driving license.
5) Proof of principal place of business e.g. rent receipt, lease agreement, electricity bill.

Who is required to sign the application for registration?

The Application for registration is required to be verified and signed by an authorized signatory. An authorized signatory for different categories of persons is:

Proprietor, in case of proprietorship concern
Managing partner, in case of partnership firm and where there is no managing partner, by any of the partners.
Managing Director or authorized signatory, in case of a company.
Karta, in case of Hindu Undivided Family and authorized signatory.
For detail information on VAT registration in various States and required form please visit: WWW.ALLINDIANTAXES.COM/VAT.PHP

ANNUAL FILING IN ROC

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As a part of Annual Filing, companies incorporated in India - including subsidiaries of foreign companies, joint venture companies and others, under the Companies Act, 1956 are required to file the following documents for annual filing along with the e-Forms with the Registrar of Companies (RoC) with proper jurisdiction over the company:

Balance-Sheet in Form 23AC to be filed by all companies
Profit & Loss Account in Form 23ACA to be filed by all companies
Annual Return in Form 20B to be filed by companies having share capital
Annual Return in Form 21A to be filed by companies without share capital
Compliance Certificate Form 66 to be filed by companies with paid up capital between Rs. 10 lakh to Rs. 2 crore

Important Points to Remember

The Balance Sheet and the Profit & Loss Accounts are to be filed as two separate documents with different e-forms.
Each e-Form along with the relevant attachment should be less than 2.5 MB.
The Annual Return, the Balance Sheet and the Profit & Loss Account are filed as attachments to the respective e-Forms. So far, the users have been filing the attachments as scanned images of those documents. Please note that a scanned copy considerably increases the size of the document. As such, you are advised to use the Text file/ Excel sheets as such, convert the same into PDF by using the PDF converter and upload these attachments as PDF documents.
The MCA21 database in respect of Authorized Capital and Paid-up Capital may not be correct. The companies have been requested to apply for correction of Master Data in this respect. Since this process is taking time, the Ministry will be accepting the Authorised Capital and Paid-up Capital figures as declared by the companies in the respective forms pertaining to Annual Filings. Accordingly, the companies are requested to declare the correct amount on these points without waiting for formal correction in the database.

How to do the Annual Returns Filing
The companies can do Annual e-Filing in three different ways:

Efiling Through MCA Portal

The company representative can upload the e-Forms from the MCA21 portal through the ‘Annual Filing Process’ link (after registering oneself as a user of the portal) at his convenience from his office/ home. This is the most convenient way for e-Filing.

Efiling Through Facilitation Centres

The company representative can prepare the e-Form following the guidelines, copy them in a CD and go to the nearest Temporary Facilitation Offices (to be opened at Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Bangalore, Ahmadabad, Pune, Kanpur and Jallandhar ) opened for the purpose of accepting Annual Filings e-Forms. During the normal days, the TFO staff will help the company representative to upload the form and generate a Challan. During last 10 days of Oct and Nov. CDs will be collected and an acknowledgment given. The files will be uploaded into the system subsequently and the company will have to download the challan from the link provided at the Annual Filing Corner of the portal after two working days of the submission. At Other locations where TFO’s/Collection Centre are not being opened, the eForms will be accepted at the existing Registrar’s Front Offices (RFO).

E-Filing through Certified Filing Centers (CFC's)

The company representative can also contact any of the Certified Filing Centers (CFCs) for the Annual Filing of e-Forms by paying the service charges to the CFCs. The details about the CFCs are available under the ‘CFC Corner’ on the MCA21 Portal.

Effects of Registration / Incorporation of a Company

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When a company is registered and a Certificate of Incorporation is issued by the Registrar, it shall have the following effects :

The company shall become s Separate Legal Entity from the date mentioned on the Certificate of Incorporation, which is considered as date of birth of the company.

The Company acquires Perpetual Succession. The members may come, members may go, but it goes for ever.

The company becomes the owner of its property and the Promoters of Shareholders have the right to share in the profits of the company.

The company can sue and can be sued in its own name.

Distinction Between A Public Company And a Private Company

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1. Minimum Paid-up Capital : A company to be Incorporated as a Private Company must have a minimum paid-up capital of Rs. 1,00,000, whereas a Public Company must have a minimum paid-up capital of Rs. 5,00,000.

2. Minimum number of members : Minimum number of members required to form a private company is 2, whereas a Public Company requires atleast 7 members.

3. Maximum number of members : Maximum number of members in a Private Company is restricted to 50, there is no restriction of maximum number of members in a Public Company.

4. Transerferability of shares : There is complete restriction on the transferability of the shares of a Private Company through its Articles of Association , whereas there is no restriction on the transferability of the shares of a Public company

5 .Issue of Prospectus : A Private Company is prohibited from inviting the public for subscription of its shares, i.e. a Private Company cannot issue Prospectus, whereas a Public Company is free to invite public for subscription i.e., a Public Company can issue a Prospectus.

6. Number of Directors : A Private Company may have 2 directors to manage the affairs of the company, whereas a Public Company must have atleast 3 directors.

7. Consent of the directors : There is no need to give the consent by the directors of a Private Company, whereas the Directors of a Public Company must have file with the Registrar a consent to act as Director of the company.

8. Qualification shares : The Directors of a Private Company need not sign an undertaking to acquire the qualification shares, whereas the Directors of a Public Company are required to sign an undertaking to acquire the qualification shares of the public Company .

9. Commencement of Business : A Private Company can commence its business immediately after its incorporation, whereas a Private Company cannot start its business until a Certificate to commencement of business is issued to it.

10. Shares Warrants : A Private Company cannot issue Share Warrants against its fully paid shares, Whereas a Private Company can issue Share Warrants against its fully paid up shares.

11. Further issue of shares : A Private Company need not offer the further issue of shares to its existing share – holders, whereas a Public Company has to offer the further issue of shares to its existing share – holders as right shares. Further issue of shares can only be offer to the general public with the approval of the existing share – holders in the general meeting of the share – holders only.

12. Statutory meeting : A Private Company has no obligation to call the Statutory Meeting of the member, whereas of Public Company must call its statutory Meeting and file Statutory Report with the Register of Companies.

13. Quorum : The quorum in the case of a Private Company is TWO members present personally, whereas in the case of a Public Company FIVE members must be present personally to constitute quorum. However, the Articles of Association may provide and number of members more than the required under the Act.

14. Managerial remuneration : Total managerial remuneration in the case of a Public Company cannot exceed 11% of the net profits, and in case of inadequate profits a maximum of Rs. 87,500 can be paid. Whereas these restrictions do not apply on a Private Company.

15. Special privileges : A Private Company enjoys some special privileges, which are not available to a Public Company.

Information Required for Name Approval

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The following information is required for seeking name approval.
1. Name of the applicant which should be one of the promoters
2. Address of the applicant - this is where all communication will be sent by Registrar of
Companies (ROC)
3. Proposed name of the company
4. Alternative names
5. Significance of the first word of the proposed name. This makes it easier to get a desired
name.
6. Names of the proposed first directors – minimum 2 in the case of a private company and
3 in the case of a public company
7. Addresses, dates of birth, father’s/husband’s names of the proposed directors
8. Authorised Share Capital – minimum INR 100000 in the case of a private limited and
INR 500000 in the case of a public company
9. Objects of the company in brief.
10. Address of Registered office of the proposed company. If a place is not finalized, this
information can be given at the time of incorporation.
11. Application fee for approval of name of INR 500 has to be remitted in cash.

Memorandum & Articles of Association – Facts to Remember

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The following are some critical facts to remember in executing M&A of A.
1. The promoters in their own handwriting have to give the following details in the Memorandum
and Articles of association of the company:
· Name
· Occupation
· Father’s/husband’s name
· Complete Address
· Number of Shares subscribed
The Memorandum and Articles have to be signed by all the promoters and witnessed.
The person/s witnessing has/have to give the following details in their own handwriting:
· Name
· Occupation
· Father’s/husband’s name
· Complete Address
Signing outside India
In case the Memorandum and Articles is to be signed by any of the promoters out side India, then
the signing should be done in the presence of Consul of India at the Indian Consulate.
Share Capital
The minimum authorised share capital for incorporating a Private Limited company is
INR 100,000.
The minimum authorised share capital for incorporating a Public Limited company is
INR 500,000.
Number of Promoters
For incorporating a Private Limited Company a minimum of two promoters are required.
For incorporating a Public Limited Company a minimum of seven promoters are required.

How to get Name Availability

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Company law requires that the name of each company should be unique. As such, the proposed
name of the company to be formed has to be approved by the Registrar of Companies and
blocked till registration. The following is the process to get availability of name.
1. Promoters have to file an application in Form 1A giving the following particulars:
· Names and addresses of promoters
· Proposed name of the company
· Alternative names of the proposed company. This is required if the proposed name is
not available.
· Type of company - Private or Public
· Brief objects of the company
· Proposed Directors and their addresses
· Proposed address of the company
· Authorised Share Capital (Authorised capital is the one upto which company can
issue shares. The paid up capital can be lower than this).
· Details of Group companies, if any
· Details of fees paid for name availability
· Note about significance of the proposed name. This is because regulations have some
criteria based on which names are to be allowed.
2. A fee of INR 500 is to be paid along with the application.
3. Typically it takes 4 working days for the ROC to confirm availability of name/s. There
may happen iteration with the ROC to get the desired name.
4. If the proposed names are not approved, more alternative names have to suggested.
5. On approval of name, the Registrar will issue a name allotment letter and will block the
name.

How to form a company in India

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The following steps are required to form a company (private or public) in India.

1. Get ‘name availability’ from Registrar of Companies (ROC).
2. Draft and execute Memorandum & Articles of Association and other documents.
3. Pay duties and fees
4. File Memorandum & Articles of Association and other documents with ROC
5. Represent with ROC for any reservations or comments he may have
6. Procure incorporation certificate from ROC.
7. Subscribe to the agreed share capital of the company
8. Obtain commencement certificate (for public companies)