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Incorporation of Private Limited Company: Understanding the Legal Requirements

Incorporation of Private Limited Company: Company means a legal entity established or formed by the group of individuals for the purpose of running business in a systematic and organized way.

Ministry of corporate affairs has the authority to approve the registration and to provide the incorporation certificate to any company under company’s act 2013. One can apply for incorporation of the company on MCA portal only and also all the compliances and submissions related to Private limited company, LLP and directors of company can be done on MCA only.

Incorporation of Private Limited Company

SPICE (simplified proforma for incorporating a company electronically) form is comprehensive form provided by MCA through which multiple work like Name reservation, Incorporation of a company, Allotment of DIN, Application for Pan& Tan can be made on a Easy & fast track mode.Through the spice form one can get the approval of application within 5 days from submitting the documents to the MCA.

There are many things which is to be keep in mind at the time of incorporation of the company. Some basic and important points are mentioned below.

1) Type of the company: Selection of the type of the company is an important and the basic thing its depends on the object of the company. The incoming directors (owners) who will get equity of new company has the right to select type of the company. There is a two types of companies one is company limited by shares and another is company limited by guarantee.
Company limited by shares means company having liability of its members limited by the amount if any unpaid on the shares held by them.
Company limited by guarantee is company having the liability of its members limited by contribution to the assets of the company in the event of its being wound up.

2) Name of the company: Thename of the company shall be in accordance with section 4(2) of the companies Act 2013.
Section 4(2) Companies Act 2013.

The name stated in the memorandum shall not:
(A) be identical with or resemble too nearly to the name of an existing company registered under this Act or any previous company law; or
(B) Be such that its use by the company:
(i) Will constitute an offence under any law for the time being in force; or
(Ii) is undesirable in the opinion of the Central Government

In case the name is identical to any existing company then Noc is required from the company for use name like them.

3) Details of Directors& Company: In private limited companyDirectors have the Directors identification number (DIN) which is a unique 8-digit number. If any person desire to be a director in any existing company DIN can be availed by FORM-DIR-3. And for the new company the basic details required for application of directorship are Photo, Aadhar Card, Pan Card, Passport, Electricity bill, mobile number, Email id, and bank account statements. The application for same is done through eform spice only. DIN would be allotted to the user only after the approval of form So the person becoming director must keep all the mentioned documents updated. Any discrepancy in any document may cause rejection in allotment of DIN. The directors must provide the consent to become director in DIR-2 and Eligibility/non-disqualification in DIR-8.
The private limited company must have minimum of 2 & maximum of 15 directors and at least one director is a resident director who stays in India more than 182 days during financial year. Note: the limit of members of the private company is minimum 2 & maximum 200.

The details required for company are as follows
1) Document of Registered office of the company i.e. Rent agreement, Noc from the owner, utility bill (not older than 2 months).
2) Memorandum of association MOA and Articles of Association.
3) Board resolution from parent company in the event of incorporation of a subsidiary company.

4) Digital signature certificates: Along with documents mentioned above All the directors must have Digital signature certificates (DSC) to make digital signatures in eform spice.
The above-mentioned is a basic list of documents. An additional document can be required based on the nature of company to be incorporation.

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