As far as India is concerned companies are formed as per Companies Act, 2013. It has been said in the section 2 (20) of this Act that only those organizations that are formed as per said Act. It has given a definition of companies saying that company is an incorporated association that is in essence an artificial individual, possesses a separate legal entity, has eternal succession, a common seal, and a common capital that has been made up of limited liability and shares that can be transferred.
Following are the various kinds of companies that can be formed as per Companies Act, 2013.
Public Limited Company
Section 2 (71) of the Companies Act defines a public limited company. It says that a public limited company is one that has a paid up capital of at least INR (Indian National Rupees) 5 lakh and is not a private company. A company such as this does not limit the transferability of shares. As per rules you need at least 7 members in order to form such a company. However, there is no upper limit as such regarding the number of members that such a company could have.
Such a company is also required to have a minimum of three directors. Its name also needs to end with the word limited. It has the right to accept public deposits and can also invite the public to subscribe to its debentures and shares. Even in case this public company opens a private company as its subsidiary the Act will regard it as a public company.
Private Limited Company
Section 2 (68) of the Companies Act defines a private limited company. In order for a company to be recognized as a private limited company it needs to have a minimum paid up capital of INR 1 lakh.
The company operates under a number of restrictions that have been mentioned in the Articles of Association and Memorandum. There are limits on the number of shares that can be transferred between members. There cannot be more than 50 members. It cannot invite or accept public deposits, and cannot also invite the public to buy its debentures.
However, it does enjoy some privileges as well. It can be started with as little as 2 members. There is no need for it to create a prospectus and it can get started right away after it receives the certificate of incorporation.
One Person Company
A one person company is one that has only one main owner. This owner possesses the entire amount of the company’s share capital. Normally, in these cases a few dummy members are selected just in order to meet the statutory requirements in India pertaining to the minimum numbers of people that should be there in a company. It needs to be incorporated as per Section 2 (62) of the Companies Act. In these cases, the owner enjoys limited liability – the other dummy members are given a share each.
Limited Liability Partnership
In India, limited liability partnerships (LLPs) are registered as Limited Liability Partnership Act, 2008. You need at least two partners in LLPs but there is no upper limit as far as owners are concerned. Here the share can be transferred but the transferee is not allowed to automatically become a partner as such.
How to incorporate companies in India?
Following are certain steps that you need to follow in order to incorporate companies in India:
Here you can look over the process of company registration in India. To get a brief knowledge of everything on company formation here we explained shortly to register a company with the 7 steps. The following below steps are must needed to incorporate a company in Bangalore Karnataka and all over in India.
Let’s starts the company registration procedure using these 7 steps:
Step-1: Select the type of company.
Step-2: Apply for Digital Signature Certificate (DSC) – It is an electronic certificate refers to the identity of a person as like as passport or driving license. DSC is used in certain cases for signing the various documents in digital medium.
Step-3: Apply for DIN (Director Identification Number) – It is a unique identification number which is allotted to director of the company according to Section 152, 153, 154 of Company Act, 2013. DIN is mandatory for all directors.
Step-4: Apply for Name Approval – Company shall give proposed name of company to ROC for approval of name. The name shall not be resembled to any other company name.
Step-5: Upload the SPICe Forms INC-32, INC-33 and INC-34 in MCA (Ministry of Corporate Affairs) for incorporating the company.
INC-32 – It contains the details of the company like SRN of form INC-1, the type of company, the class of company, the category of company, sub-category of company, Company is Having share capital or Not having share capital, Main division of industrial activity of the company, Capital structure of the company, Registered office address, Particulars of individual first subscriber(s) cum directors, Particulars of payment of stamp duty, Additional Information for applying Permanent Account Number (PAN) and Tax Deduction Account Number (TAN) Information specific to PAN, Source of Income.
INC-33 (MOA) – It is a constitution of company which contains all the objects of the company. It is a document which describes activity and scope and relation with shareholders.
INC-34 (AOA) – It is a document which contains rules and regulations relating to the internal management of the company.
Step-6: Payment of Fees – After uploading above forms, registration fees shall be paid towards the registrar of companies online.
Step-7: Incorporation Certificate – When all documents are filed in order with requisite fees then MCA will verify it and issue the incorporation certificate. After this a company can start their business journey in the corporate world.
Essential documents required during the company registration
The following documents are necessary for company incorporation in India
As you already know, all the above documents are important for registering a company for the better prospects. So once you have assembled all these documents you are ready to be incorporated your company smoothly.
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