IBG Fincon’s helps you in every aspect of Indian Company Formation/Company registration in India. Herein our experts advice for formation of Private Limited as well as Public Limited companies, explaining in details about their formalities, pros and cons. Here, private company has number of shareholders limited to fifty and a Public limited company has minimum paid-up capital of Rs. 5 lakhs or such higher as prescribed and complies the conditions as mentioned in Sec 43 A of the Company Act.

Our experienced team efficiently handles every single process those are needed for a company to come into existence and run smoothly without any legal hassles.
The process includes:
  1. Getting name approval of proposed company from Registrar of Companies (ROC)
  2. Following this with application for incorporation, Memorandum and Articles of Association and other necessary prescribed documents that need to be submitted with ROC (Here, the ‘Memorandum of Association’ defines constitution and objects of company and ‘Articles of Association’ contains rules & regulations of company for management of its daily affairs)
  3. After examining documents, ROC issues Certificate of Incorporation
The services we provide for procedures of incorporating a company in India are:
  • Obtaining Director Identification Number (DIN)
  • Obtaining Digital Signature Certificates (DSC) for each Director/Promoter
  • Making application to ROC
  • Applying for name availability of proposed company to ROC (through filling Form 1A)
  • Upon name approval, completing the formalities for company incorporation within proposed 3 months
     
     
Procedures in Registration of a Company Partnership Sole Proprietorship Business Licensing
Applicable law
The Indian Companies Act, 1956.
The Companies Act of 1956 sets down rules for the establishment of both public and private companies.

Allotment of Director Identification Number (DIN)
Application in Form DIN-1 shall be made online and provisional DIN number of the person intending to become director of the Company shall be generated.

Acquiring Digital Signature certificate (DSC)
Digital Signature Certificate is acquired by submitting the application alongwith prescribed fee to one of the various vendors like TCS, Satyam etc. On submission of documents, DSC is allotted in 1-2 days.

Name Approval of the company
An application in Form No. 1A needs to be filed with the Registrar of Companies (ROC) online through Digital Signature of one of the proposed director. On submitting the application, the ROC scrutinizes the same and sends the approval / objections in about 3-4 days to the applicant through e-mail.

Procedure after name approval of the company
An application for registration should be submitted to the Registrar of Companies with the following documents:
• Memorandum of Association;
• Articles of Association;
• A declaration in Form 1 by a person named in the articles of the proposed company as a director, manager, or secretary of the company, or by an advocate of the Supreme Court or High Court, or by an attorney entitled to appear before the High Court, or by a Chartered Accountant practicing in India stating that all the requirements of the Companies Act 1956 and the applicable rules with respect to the registration and other matters have been complied with;
• A list of persons who have consented to act as directors of the company.
• Consent of every person prepared to act as a director.
• Information about directors, managing directors, managers and secretary must be submitted in a prescribed Form 32
• Information about the registered office in prescribed Form 18
• Power of attorney in favour of one of the promoters or any other person, authorizing him/her to make corrections in the documents submitted to the Registrar of Companies,
• Applicable registration fee payable to the Registrar of Companies.
Partnership is defined as a relation between two or more persons who have agreed to share the profits of a business carried on by all of them or any of them acting for all. The owners of a partnership business are individually known as the "partners" and collectively as a "firm". Its main features are :-

A partnership is easy to form as no cumbersome legal formalities are involved. Its registration is also not essential. However, if the firm is not registered, it will be deprived of certain legal benefits. The Registrar of Firms is responsible for registering partnership firms.

The minimum number of partners must be two, while the maximum number can be 10 in case of banking business and 20 in all other types of business.
The firm has no separate legal existence of its own i.e., the firm and the partners are one and the same in the eyes of law.

In the absence of any agreement to the contrary, all partners have a right to participate in the activities of the business.

Ownership of property usually carries with it the right of management. Every partner, therefore, has a right to share in the management of the business firm.
Liability of the partners is unlimited. Legally, the partners are said to be jointly and severally liable for the liabilities of the firm. This means that if the assets and property of the firm is insufficient to meet the debts of the firm, the creditors can recover their loans from the personal property of the individual partners.

Restrictions are there on the transfer of interest i.e. none of the partners can transfer his interest in the firm to any person(except to the existing partners) without the unanimous consent of all other partners.
The firm has a limited span of life i.e. legally, the firm must be dissolved on the retirement, lunacy, bankruptcy, or death of any partner.

A partnership is formed by an agreement, which may be either written or oral. When the written agreement is duly stamped and registered, it is known as "Partnership Deed". Ordinarily, the rights, duties and liabilities of partners are laid down in the deed. But in the case where the deed does not specify the rights and obligations, the provisions of the THE INDIAN PARTNERSHIP ACT, 1932 will apply.

The deed, generally contains the following particulars:-
  • Name of the firm.
  • Nature of the business to be carried out.
  • Names of the partners.
  • The town and the place where business will be carried on.
  • The amount of capital to be contributed by each partner.
  • Loans and advances by partners and the interest payable on them.
  • The amount of drawings by each partner and the rate of interest allowed thereon.
  • Duties and powers of each partner.
  • Any other terms and conditions to run the business.

    Advantages
  • Ease of formation
  • Greater capital and credit resources
  • Better judgement and more managerial abilities

    Disadvantages
  • Absence of ultimate authority
  • Liability for the actions of other partners
  • Limited life
  • Unlimited liability

    Partnership is an appropriate form of ownership for medium sized business involving limited capital. This may include small scale industries, wholesale and retail trade; small service concerns like transport agencies, real estate brokers; professional firms like charted accountants, doctors' clinic, attorney or law firms etc.
If you want to do business as Sole proprietorship then it doesn’t need any registration with Government but there are some business licenses you need to take when setting up Sole proprietor firm/company. These business licenses depend on the type of business that you want to do. For example it can be a product based or a service based business. These licenses will also help in getting a bank account in the name of your business entity.
 
Business licenses in India
 
PAN Card
As a Sole Proprietor firm you will be filing returns in your name so a PAN card is mandatory. you can apply for the same online for  94 whichyou will get in 7 days. Apply here – https://www.tin-nsdl.com/
 
TAN [Tax Collection & Deduction Account Number]
If you are collecting tax either from the customers or your employees then a TAN is must.
 
Service Tax Registration
In any year if your firms total turnover crosses 9 lacs then you will have to pay service tax which is 10% and you can register and pay for the same online. More info :
http://www.servicetax.gov.in/st-proc-home.htm and
Service Tax registration form here :
http://www.servicetax.gov.in/forms/st1.pdf
 
VAT/ CST Registration
VAT is a State based tax and CST is Central based tax. If you are buying or selling taxable goods within a state, then VAT registration should be obtained. And if you are buying or selling taxable good across different states then you have to obtain CST registration. VAT rules varies according to the sates in which you are doing business. You can register for VAT online.
 
Importer Exporter Code
This is a 10 digit number like PAN number and is issued by Director General of Foreign Trade [DGFT] , Ministry of Commerce, Government of India to Indian Companies and Individuals who want to carry International Trade. More details here: http://dgft.gov.in/
Apply for it online :
here http://dgftcom.nic.in/ieconline.htm.
 
Professional Tax
If you have employees then you have to collect professional tax from them and pay it to government. Some states do not have this tax imposed and some states collect fixed amount say  2500 Annually.  Please check with you respective states and do the needful.
 
Employee Provident Fund Registration
If you have less than 20 employees then its not mandatory but you can voluntarily take this for the better employee benefits and employee retention. Its mandatory for more than 20 employees firm and other 180 business classes specified under the law. It can be used as a valid company expense and deducted from the total tax. The registration is done at no Cost at The Employees Provident Fund Organization (EPFO) which is a statutory organization under the Ministry of Labor and Employment. Once the employer is registered with the EPFO, it will register his employees with the office and open Provident Fund accounts in the name of each employee. More information is available at www.epfindia.gov.in and registration here: http://www.epfindia.gov.in/registration.htm
 
ESI (Employee State Insurance) Registration
This is used for health insurance purposes for your employees and is mandatory for employing 10 people in factory and 20 people in other establishments like shops, hotel etc. The Employees’ State Insurance (ESI) Act (1948) provides for a fund administered by the ESI corporation in which contributions is made both by the employer and the employee at the rates prescribed by the National Government. This is done at no cost at the regional offices in the states. More info here: http://www.esic.nic.in.
 
     
     
Comparison among Trust, Society and Non profit Company

 

Trust

Society

Section-25 Comapny

Statute/Legislation

Relevant State Trust Act or Bombay Public Trusts Act, 1950

Societies Registration Act, 1860

Indian Companies Act, 1956

Jurisdiction

Deputy Registrar/Charity commissioner

Registrar of societies (charity commissioner in Maharashtra).

Registrar of companies

Registration

As trust

As Society
In Maharashtra, both as a society and as a trust

As a company u/s 25 of the Indian Companies Act.

Registration Document

Trust deed

Memorandum of association and rules and regulations

Memorandum and articles of association. and regulations

Stamp Duty

Trust deed to be executed on non-judicial stamp paper, vary from state to state

No stamp paper required for memorandum of association and rules and regulations.

No stamp paper required for memorandum and articles of association.

Members Required

Minimum – two trustees. No upper limit.

Minimum – seven managing committee members. No upper limit.

Minimum three trustees. No upper limit.

Board of Management

Trustees / Board of Trustees

Governing body or council/managing or executive committee

Board of directors/ Managing committee

Mode of Succession on Board of Management

Appointment or Election

Appointment or Election by members of the general body

Election by members of the general body

     
 
 
 
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