A corporate entity in India is governed by provisions of The Companies Act 2013 (The Act). The Act permits primarily three kinds of Companies -
a) One Person Private Limited Company (OPC)
b) Private Limited Company
c) Public Limited Company
The basic differentiation between the above types of Company is as follows:
| Particulars | |||
|---|---|---|---|
| Public | Private | OPC | |
| Minimum paid up capital | Rs. 5 Lakhs | Rs. 1 Lakhs | Rs. 1 Lakhs |
| Maximum No. of Members | Unlimited | 200 | 1 |
| Minimum No. of Directors | 3 | 2 | 1 |
| Mandatory Resident Director | 1 | 1 | 1 |
| Minimum No. of Subscribers | 7 | 2 | 1 |
| Nature of Person Subscriber | Foreign National/Corporate allowed | Foreign National/Corporate allowed | Resident Individual only |
All the above type of companies is with limited liabilities; owned by shareholders & governed by the Board of Directors. In case you wish to know more about the laws governing these companies & differences between the three,kindly contact our Company law cell on : companies@kdpaccountants.com
The procedure for the formation and registration of a company in India is as under for your understanding -
The first step is to identify the Directors who will be part of the Board of the proposed Company and apply for its Director Identification Number (DIN) and Digital Signature Certificate (DSC). In case of foreign company planning to set up in India, it is vital to note that now it is mandatory to have at least 1 Resident Director.
The first step is to identify the Directors who will be part of the Board of the proposed Company and apply for its Director Identification Number (DIN) and Digital Signature Certificate (DSC). In case of foreign company planning to set up in India, it is vital to note that now it is mandatory to have at least 1 Resident Director.
This stage will involve drafting of charter documents of the Indian Company and thereafter will have to be vetted and stamped by Registrar of Companies.
All the Forms with relevant documents will have to be filed with Registrar of Companies at this stage. The filing will involve filing of charter documents of the company, certified copy of approved name, appointment of initial Directors, notify the registered address, etc along with filing and registration fee.
On the submission of the above documents, Registrar of Companies will issue a Certificate of Incorporation. This is the date of incorporation of the company.
Obtain a Certificate of Commencement of Business. This is the date from which a company can commence business in India within a period of 180 days from the date of incorporation.
A bank account for the company can now be opened and the operations may start!
In order to qualify for being appointed as a director, few provisions have to be carefully understood:
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