1) What are the type of companies that I can be incorporate in India?

– One Person Company (OPC) – It is a form of company with only one member. The process of starting up an OPC is same as that of a general private limited company. It is a hybrid structure that infuses the benefits of a sole proprietorship business with a company form of business.

– Private Limited Company- A separate legal entity with perpetual succession. A minimum of two persons are required for a company registration. Interestingly, no MINIMUM PAID UP CAPITAL is required to start a company.

– Public Limited Company- At least three directors. A public limited company can start its operations only after obtaining a Certificate of Commencement from the Registrar in addition to Certificate of Incorporation.

– Unlimited Liability Company– A major difference of this form of company with other forms is that it does not have a share capital or any shareholders. Incidentally, the company is governed by its members, and the extent of their liability is defined by the Memorandum of Association.

– Non-profit Organizations – In India, popularly called Non-Profit organizations, come in three flavors, namely Trusts, Societies, Section 8 companies.
Among the above, the most popular types of companies are private limited and public limited companies.

2) What are the advantages I will get if I incorporate a company in India?

– Liability of the Members’ (the directors and shareholders) is limited to the amount of money they have paid for shares, thus Stakeholders are not typically liable for corporate debts and liabilities.

– Extra capital can be raised by selling shares either privately or in the market. Members can leave or join without any restriction.

– The death, bankruptcy or withdrawal of capital by one member does not affect the company’s ability to trade.

– The disposal of the whole or part of the business is easily arranged.

– Enjoys high credibility as the books of accounts and other documents are available for public vigilance.

– ESOPs sweat equity and other incentives can be issued, which help attract and attain best of talents.

– Overall transparency at various levels.

3) What is Authorized Capital?

The Authorized Capital of a company is the maximum amount of share capital that the company is authorized by its constitutional documents to issue to shareholders.The Authorized share capital (or nominal share capital) can best be described as the maximum amount of share capital that the company is authorized by its Memorandum & Articles of Association to issue (allocate) to shareholders. Further, a portion of the authorized share capital can (and usually does) remain unissued.
4) What is Paid-Up Capital?
Paid-Up Capital is the amount of money that has been received by shareholders who have completely paid for their purchased shares. This would not include any shares that have been bid on, but not yet purchased.

5) Which city is best for registering company in India?

It will depend upon the nature of business you intend to pursue. However, after registering over hundreds of companies, it is our practical advice to keep note of few of many factors before registering your company in any city:
– The local registrations that will be required to be obtained for the company after its registration.
– Nature of your business and the demographic advantage that the city is expected to provide.

6) Is it possible for two foreign nationals to register a company in India?

Yes, an Indian company can be incorporated with one or more foreign nationals as Directors. However, in private company wherein there are 2 directors and both of them are foreign nationals, one of them has to be a resident in India for a period of at least 182 days in the calendar year(as per Companies Act 2013). Also, wherein both the directors are foreign nationals, then disclosure has to be made whether 100 % FDI is allowed in the desired sector or not.

7) Can I, as an individual register a company solely on individual basis?

Yes, as per Companies Act, 2013, you can register a company solely on individual basis. The new Act provides for the concept of One Person Company, wherein an individual can start a company on individual basis.

8) What are the Government fees for registering my Authorized Capital for company registration?

The Government Fees for registering a company is in accordance to the specified slab.

9) How to know if the desired name for the proposed company is available or not?

Before fixing on any name, one should always avail the public search of existing company/LLP name along with trademark search. More unique the name more is the chances of their quick reservation.

10) What is a DIN Number?

DIN Number is a unique identification number allotted to the directors of the company by the Government. For obtaining a DIN number, application is made to the Government in Form DIR- 3 with requisite documents.

11) I already have a DIN number allotted to me. Do I need to obtain another one for the new company I wish to register?

No, DIN is a one-time formality.

12) I already have a DIN and I wish to update my address in my DIN records.

The name, address, e-mail ID, phone number, residential status, all can be updated by making an application in Form DIR-6, along with requisite documents and declaration. There are no prescribed Government fees for the purpose.

13) Is DIN and PAN connected?

Yes, the basic personal details, namely the name of the applicant, father’s name of the applicant and his/her Date of Birth are verified by the DIN authorities from the PAN database.

14) Does Shareholders have to be directors as well?

There is no such compulsion as to the point that shareholders have to be directors as well. There can be a separate group of individuals acting as directors and a separate group of individuals acting as shareholders. Directors are the hands and brains of a company where as shareholders are the owners of the company.

15) Can an existing company be director and shareholder in another company that is to be incorporated?

An existing company can be a shareholder in another company that is to be incorporated. For this purpose, a clear distinction has to be made as to whether the existing company is acting as a holding company or not. Also, the company will have to nominate a natural person to act as its representative. However, it cannot be a director in the same.

16) Can a director engage himself in a part time job elsewhere than the company in which he is a director?

Yes, he can.

17) What is the minimum qualification to act as a director in a private limited company?

There is no such prescribed qualification.

18) What is DSC?

The abbreviation of DSC is Digital Signature Certificate. DSC is required for at least one director for the purpose of Company Registration of a private company.The importance of Digital Signature Certificate is to ensure security and authenticity of the Forms of the Ministry filed electronically.

19) Can DSC be obtained by an NRI acting as a director?

Yes, DSC can be obtained by NRI acting as a director of a company.

20) Can the directors use their residential address as the registered office of the company?

For registered office address of the proposed company, directors can use their own residential address or their relative’s address or any address for which they can furnish valid documents as proof consisting of a No Objection Certificate from the respective owner.

21) Do we have to invest funds immediately before registering the company?

The subscribed amount of capital has to be deposited within 60 days from the date of incorporation of Company.

22) When can a Bank Account for the company be opened?

A Bank Account for the company can be opened after receipt of the Certificate of Commencement.

23) Can a person residing in Kerala incorporate a company in Bangalore?

Yes, a person residing in Kerala can incorporate a company in Bangalore, provided he can furnish satisfactory documents in respect to Registered Office of the company.

24) Can same address be used as registered office address proof for two different companies?

Yes, it can be used but only after obtaining No Objection Certificate from the owner.

25) What is the process to validate the documents for Foreign Nationals?

All the documents provided by foreign nationals, ranging from DIN declaration to subscriber’s sheets of the MOA and AOA either needs to be notarized by a notary public and subsequently apostilled OR notarized by a notary public and stamped by the Indian Consul of their respective countries.

26) Mr. X, a director of a said company had used his residential property as registered office address. Will the property be treated as company’s property?

No. The property will remain Mr.X’s.

27) A company has a registered office in Bangalore. However, the directors wish to conduct the business from Kerala. Do they need to change their registered office?

No. There is no such compulsion. A company might have its registered office in one particular state and any number of corporate offices all over the country.

28) Can a subsidiary of a foreign company be incorporated in India?

Yes. However, decision has to be made regarding the percentage of shares held by the holding company (foreign company) and the sector in which it is to be established since 100 % FDI is allowed only in selective sectors as of now.

29) Is rent agreement considered a valid address proof for company registration?

Yes, Rent Agreement is considered as a valid document for company registration. Further, latest utility bill or tax receipt is mandatory.

30) What is Memorandum of Association (MOA)?

MOA is the fundamental incorporation document. It defines the name and address of the registered office of the company. The MOA will highlight the object clause by which the company will run its business. The activities of the company are bound by MOA and is likely to attract penalties if goes ultra-vires. It will also suggest the Name, the state of Registered Office, the Liability of the shareholders and the Capital by which it is willing to start the business. Hence, this charter is important.

31) What is Articles of Association (AOA)?

AOA is more of an internal document for the company. It defines the matters relating to conducting the business of the company, procedure and limitations of altering the structure of the company.

32) How do I register my MOA and AOA with the Government?

MOA and AOA are registered with the Government at the time of incorporating the company. An application is made through INC 7, in which the MOA and AOA are attached and applied for approval. The requisite stamp-duty is to be paid depending on the state-wise Stamping Rules and authorized capital of the company.

33) My company has been inoperative since it was registered. There has been no income and no expenses altogether. Do I still need to file the compliance forms with the department every year?

Yes. Although there have been no operations, the company has to still file the statement of accounts with the department every year. A company which has not filed its annual return for three consecutive years are considered in the strike off list of the department. Although the new Act has brought in the provisions enabling the company to operate as dormant, the said provisions are not yet applicable.