The document discusses the key steps involved in forming a company in India. These include:
1) Deciding on the type of business and company structure.
2) Obtaining necessary approvals and documents like Digital Signature Certificate and Director Identification Number.
3) Filing documents like Memorandum of Association, Articles of Association, and forms for name reservation and incorporation.
4) Raising capital through public offers or private subscriptions from investors.
5) Obtaining a certificate of incorporation and then a separate certificate to commence business operations once minimum capital requirements are met. The process involves promoters, incorporation or registration with regulatory authorities, and establishing the capital structure of the new company.
2. A Company comes into existence when a group
of people come together with a view of forming
an association to exploit the business
opportunities by bringing together; men,
material, money and management
What do you mean by Formation
of a Company?
3. BEFORE STARTING COMPANY
Which business to start
Whether a new company should be formed or
take over the business of some existing
company.
Private company or public company
What should be the capital of the company etc.
4. 1. Obtain Digital Signature Certificate (DSC)
Obtain a Digital Signature Certificate from authorized DSC issuing authority
2. Obtain Director Identification No. (DIN) [S.153]
Make Application in Form DIR-3 [Rule 9 of Chapter XI Rules]
3. Register DSC in the name of Director on MCA portal
4. Apply for Reservation of Name [S.4(4)]
Apply in Form No. INC.1 [Rule 9].The same shall be reserved for a period of 60 Days
5. Adoption of Memorandum of Association [S.4(6)]
MoA shall be in respective form as prescribed inTable A, B, C, D and E of Schedule I
as may be applicable
STEPS FOR SORMATION OF COMPANY
5. 6. Adoption of Articles of Association [S.5(6)]
AoA shall be in respective form as prescribed inTable F, G, H, I and J of Schedule
I as may be applicable
7. Incorporation
Promotion
Incorporation or Registration
Capital structure/ Flotation
Commencement of business [S.11]
8. Registered Office [S.12]
A company shall have a registered office within 15 days of Incorporation and it
shall file Form No.INC.22 [Rule 25] to verify the same.
6. Incorporation of Companies
Promotion
Incorporation or Registration
Capital Subscription/Floatation
Commencement of Business
7. 1. PROMOTION
Promoters are persons engaged in, one or the
other way in the formation of the company
Promoters make detailed study to assess the
feasibility of the business idea and the amount
of financial and other resources required
8. LEGAL POSITION OF PROMOTER
Fiduciary relation
PROMOTER’S LIABILITY
Civil liability (Sec 35)
Criminal liability (Sec 34)
9. DUTIES OF PROMOTER
Not to make any secret profit
To disclose to the company any interest which
he has in a transaction entered into by it
11. 2. INCORPORATION
I. Type of company: private or public
II. Application for availability of Name
III. Preparation of MoA and AoA
IV. Preparation of other documents
V. Filing of documents for registration
12. IV. Preparation of other documents:
i. Consent of directors,
ii. particulars of directors,
iii. affidavit by the subscriber to memorandum
and first directors,
iv. address for communication,
v. statutory declaration
13. V. Filing of documents for
registration
Certificate of Incorporation
And CIN (Corporate Identity Number)
Certificate of incorporation a conclusive
evidence that all the requirements of companies
act have been complied with
14. 3. CAPITAL SUBSCRIPTION
If the capital is said through public offers of
shares, the director of the public company will
first file a copy of prospectus with the registrar
of companies. Then investors forward their
application money to the company’s bankers
mentioned in the prospectus.
15. 4. COMMENCEMENT OF BUSINESS
After obtaining certificate of incorporation, a
company not having share capital may
commence its business
But a company having share capital, whether
public or private, has to obtain the certificate
to commence the business
16. FOR OBTAINING CERTIFICATE TO
COMMENCE BUSINESS
Declaration by a director: that every
subscriber to the memorandum has paid the
value of the shares agreed to be taken by him
and paid-up share capital of the company is
not less than 5 lakh rupees in case of public
company and not less than 1 lakh rupees in
case of private company on the date of making
of this declaration.
Sectoral approvals: e.g. RBI, SEBI