Company formation is incorporating (registering) a business as a limited company. When this happens, the business becomes a separate legal entity; an individual ‘person’ in the eyes of the law. Essentially, this means that the company is completely different from its owners in terms of finances, liabilities, contracts and assets and property ownership.
Requirements to start a new company
Creating a company is very easy as the whole process can be done online. Applications are completed electronically to Companies House, and approval is usually granted within 3 hours. Also, you only need one person to register and run the company. This is because the same person can be the sole director and the sole shareholder or guarantor.
To register a private company limited by shares or guarantees, you need:
A unique company name
Office fee address registered in England and Wales, Scotland or Northern Ireland.
At least one director
At least one shareholder or guarantor (owner)
Memorandum and Association Articles (Management Documents)
Share capital of at least one issued share (limited by share companies only)
Four standard Industrial Classification (SIC) codes to describe what a business does
Information about people with significant control (PSC)
For a limited company or LLP registration.
Documents required for company registration in India
For company registration in erode you need to provide the following documents.
Passport size photograph
Copy of PAN card
Latest bank statement / telephone or mobile bill / electricity or gas bill
Voter ID / Passport
Notarized rental agreement in English
No objectionable certificate of property owner
Utility bill for registered addresses.
Company Registration Procedure in India
To make it easier and simpler for business registration in India, the Ministry of Corporate Affairs introduced the INC-29 form.
With this form (INC-29) company incorporation has merged several processes in a single process like getting business name approval, director identification number (DIN) and inclusion application.
The move made the company’s inclusion process much easier. It’s all online and nowadays it only takes seven days to join a company.
The process for registration of a company in India is as follows:
1. Obtaining Digital Signature Certificate (DSC) from MCA
The first step is to apply for the digital signatures of the director, who is eligible for D.Sc. Company Online DSC is an e-signature to help you complete new firm registration in erode.
It usually takes 2 days to get DSC after submission of documents.
The Information Technology Act, 2000 provides for the use of digital signatures on documents submitted in electronic form to ensure the security and authenticity of documents filed electronically.
This is a safe and authentic way to submit a document electronically. As such, all filings made by companies / LLPs under the MCA21 e-Governance Program are required to be filed using digital signatures by an authorized person to sign the documents.
Director Identification Number (DIN Number)
Memorandum and Association Articles (MOA and AOA)
Registered office fee verification
Appointment letters and announcements
Once all these documents are ready, we have to fill the forms for the formation of the company, then we will get the certificate of investment.
Inc. Issuance of certificate of insertion
Once you get the certificate of investment you will get the page number along with it and we will be able to open a bank account.
Reasons for the rejection of the application
The most common reasons for rejecting applications for company formation in chennai are:
Company name is unavailable, incomplete or missing from the application
Supporting evidence is required for the name of the company
Supporting evidence for the name of the proposed company has been misrepresented
Company name contains the word ‘sensitive’ or expression
Incomplete details are provided to the director or company secretary
The residential address is marked as a commercial property
The structure of company shares is wrong
There is a problem with officer authentication
The directors of the company do not meet the minimum age requirement of 16 years
The director is registered as an underage bankrupt or incompetent director
The registered office fee address is not included, or it is located in the wrong country
Statement of capital (containing information about share capital) Incomplete or missing (Limited by share companies only)
Articles from the association are not included
Features of new company registration
In general, the main reason for registering a limited company is that the financial responsibility of those who have a business can be limited. This protection is known as ‘limited liability’. Private companies can be limited either by shares or by underwriting. It acts as a juristic person. It can sue and can be sued. The company endures forever and the company will be everlasting. Hence it is unaffected by the death or departure of any of the member in the company.
Owners of a company limited by shares are only responsible for the value of their shares. Owners of a company limited by a guarantee are only responsible for the value of their guarantee. Their personal finances and assets are protected beyond the limits of their responsibilities.
This is not the case for unorganized business formations. Traders alone, for example, have unlimited liability. This means that he is fully responsible for all business debts and claims as there is no legal or financial difference between the individual and his business.
The company can be held responsible for criminal acts. He can be held responsible for breaking the law and can also be fined. However, no imprisonment of the company is possible. He could be charged with conspiracy to commit fraud or convicted of using false documents with intent to defraud. He may also be responsible for the kind of talk committed by his employees during his employment.
Due to this independent corporate existence the creditors of the company are the sole creditors of the company and its remedy is only against the company and its assets, not against any of its members. The law recognizes the existence of a company, regardless of the motives, objectives, plans or conduct of individual shareholders.