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Company's Act 2013

Incorporation is the formation of a new corporation/ company (a corporation being a legal entity that is effectively recognized as a person under the law). The corporation may be a business, a non-profit organization, a startup, a micro small or medium scale business.MCA regulates corporate affairs in India through the Companies Act, 1956, 2013 and other allied Acts, Bills and Rules. MCA also protects investors and offers many important services to stakeholders. The Ministry is primarily concerned with administration of the Companies Act 2013, the Companies Act 1956, the Limited Liability Partnership Act, 2008 & other allied Acts and rules & regulations framed there-under mainly for regulating the functioning of the corporate sector in accordance with law.

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New Company Incorporation

What are the types of business structures in India?

Let’s try and understand the types of business structures available in India. Here is a list of some of them:

One Person Company (OPC)


Recently introduced in the year 2013, an OPC is the best way to start a company if there exists only one promoter or owner. It enables a sole-proprietor to carry on his work and still be part of the corporate framework.

Limited Liability Partnership (LLP)

A separate legal entity, in an LLP the liabilities of partners are only limited only to their agreed contribution.

Private Limited Company (PLC)

A company in the eyes of the law is regarded as a separate legal entity from its founders  It has shareholders (stakeholders) and directors (company officers). Each individual is regarded as an employee of the company.

Public Limited Company (PLC)

A PLC is a voluntary association of members which is incorporated under company law. It has a separate legal existence and the liability of its members are limited to shares they hold.
You can choose what business structure suits your business needs best and accordingly register your business.

Here is a comparative list of the popular business structures in India.

Company typeIdeal forTax advantagesLegal compliances
Limited Liability PartnershipService-oriented businesses or businesses that have low investment needsBenefit on depreciationBusiness tax returns to be filed ROC returns to be filed
One Person CompanySole owners looking to limit their liabilityTax holiday for first 3 years under Startup India Higher benefits on depreciation No tax on dividend distributionBusiness returns to be filed Limited ROC compliance
Private Limited CompanyBusinesses that have a high turnoverTax holiday for first 3 years under Startup India Higher benefits on depreciationBusiness tax returns to be filed ROC returns to be filed An audit is mandatory
Public Limited CompanyBusinesses with  a high turnoverTax exemptions underBusiness tax returns to be filed. Mandatory Audits

Other forms of business structures include Sole proprietorship, Hindu Undivided Family,  and Partnership firms. Please bear in mind, these structures do not come under the ambit of company law.  

Documents required for Company Registration

In India, registration of private limited company can not be done without proper proof of identity and proof of address. Proof of identification and address would be required for the incorporation of all the company’s directors and shareholders.

The organisation must have a registered office in India for online business registration in India. A recent copy of an energy bill or the property tax receipt or water bill must be sent to confirm admission to the registered office. In addition to the tenancy agreement, the maintenance bill or the sale deed or a letter from the landlord with his/her permission to use the office as the company’s registered office is accepted.

An identity and address proof of all the directors and the subscribers to the share capital must be submitted.

Frequently Asked Questions on Company Registration

Where can I register my company?

If you intend to register a new company in India, you must submit an application to the Ministry of Corporate Affairs (MCA). You make the application online at MCA portal remotely too. For registration, you’ll need a Digital Signature Certificate(DSC), and Director Identity Number(DIN), among other things.

What happens if my company name is already taken?

The Ministry of Corporate Affairs (MCA) that maintains a record of registered company names, you’ll have to access that directory and check if your company name is already registered. If the company name appears in the company Registration directory, you’ll have to choose another name. If you have already made an application, you’ll have to make another application for a different name that is previously not registered.

Can a foreign national be a director of a company?

Yes, as per the Indian company law, a foreign national can be a director of a company registered in India. However, he must fulfil all the criteria laid down in the Act. The most important being allotment of a Director Identification Number (DIN).

Any person, including a foreign national, appointed as a Director cannot act in the capacity of a Director unless he/she gives it formally in writing. This can be done by filing Form DIR-2 within 30 days of being appointed as the director.

Are there any benefits of forming an OPC?

A combination of a sole proprietorship and a company an OPC offers the best of both worlds. Registering an OPC is easier and requires less documentation. OPC has to commit to lesser corporate formalities like conducting frequent AGMs/ EGMs, maintaining quorum, minutes, ROC filing formalities etc. An OPC is ideal for small businesses and yet can avail of all the benefits of a private limited company.

How many days does it take to register a company?

The new changes brought about by the MCA have made it easy to register companies of any nature with the government. Provided that you have all your documents in place, it can take anywhere between 10 – 15 days to register your company formally.

Is a physical presence of a person needed for company registration?

The entire process is completed online, so you don’t have to be present at any particular place for registration. A scanned copy of the documents must be submitted via mail. At the business address they receive the company incorporation certificate from the MCA.

Can a company’s director receive salary like an employee?

Yes, in private limited, LLP or OPC private limited company a salaried person can become the director. If this calls for these conditions, one has to test the employment agreement. The employers are, in many situations, very happy with the fact that their employee is a director in another company.

A corporation is a legal entity founded under the Act, much like any individual. This is viewed like another person who may own a house, and who has debts or creditors. A company’s representatives (directors/shareholders) have no responsibility to a company’s creditors in a case firm is unable to cover the debts.

I want to covert my partnership firm into a limited liability partnership. How do I go about it?

Any current partnership companies wishing to convert to an LLP must apply to Form 17 (Application and Statement for the Transfer of a Partnership to LLP. Form 17 must be submitted along with Form 2 (Incorporation Request and Statement of Subscriber).

How to register as an LLP instead of a company?

One must first apply for a Designated Partner Identification Number (DPIN) to register an Indian LLP. You will do so by filing an eForm to obtain the DIN or DPIN. Then one will need to buy their Digital Signature Certificate and register the same on the portal. One will subsequently get the Ministry ‘s approval of the LLP term. When the name of the LLP has been accepted an LLP may be registered by filing the incorporation form.

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Annual ROC Compliances

Compliances which are required to be made once a year by all the companies and LLP incorporated under the Companies Act. ROC compliances are mandatory and cannot be skipped. Noncompliance can lead to penalties and other legal issues pertaining to the Company. All the financial records should be maintained carefully in order to file accurate annual returns. All the Companies and LLP incorporated under the Companies Act are mandatorily required to file various forms, returns, and documents with the Registrar of Companies (ROC) in an electronic mode within the Perscribed time along with the Perscribed fees. It includes filling of various forms like ADT-1, AOC-4, and MGT-7 for companies, and FORM – 8, FORM -11 for LLP. NOTE – If a Company fails to comply with the provisions of annual filing, then the Company and every officer who is in default shall be punishable with the fine for the period for which default continues.

What is ROC annual filing?

Just like Income tax return is submitted to income tax department, same as ROC returns are filed to registrar of companies with ministry of corporate affairs (MCA). It is mandatory for companies to intimate about the management via prescribed ROC forms on annual basis.

What is the importance of ROC compliances?

Every company is required to inform about the working to the Registrar of Companies where it is registered. Returns include financials and annual return. Annual accounts include the balance sheet, profit and loss account and, annual return includes the data regarding list of shareholders, capital details, any transfer of shares happened during the year, addition/removal of key managerial person etc. Such compliances are required to be made once in a year otherwise company will get strike off or closed by ROC.

What is annual compliance?

Legal obligations which have to be fulfilled after incorporation of company are annual compliance. Compliance means they are aware of rules and take steps to comply. Annual compliance means covering all the aspects or legal requirements for whole year to avoid legal penalties.

Whether Roc Compliance and annual compliances are same?

Roc compliances include the annual compliances. Annual compliance denotes the intimation about the financials and annual return on annual basis to ROC i.e., continuous compliances (yearly basis). But, Roc compliance is just intimation about the day to day working of company on every event.

What are the E-Forms for Roc Compliance and annual compliances?

Forms for Annual complianceForm AOC-4, MGT-7, ADT-1 and, Aoc-4 CFS, AOC -4 XBRL Etc.

Forms for ROC Compliance- DIR-12, DPT-3, DIR-3 KYC SH-7, PAS-3, INC-22 Etc.,

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ROC Matters

How companies are registered by the Registrar of Companies

No company can come into existence by itself. It requires a certificate of incorporation issued by the Registrar of Companies after finalization of several statutory requirements. As part of the statutory process, the promoters need to submit several documents to the Registrar of Companies. These documents include Memorandum of Association (MoA), Articles of Association (AoA), the pre-incorporation agreement for appointing directors/ managing directors and the declaration by an authorized person confirming that requirements relating to registration have been adhered to.

After authenticating the documents, the ROC inputs the company’s name in the register of companies and releases the certificate of incorporation. The Registrar together with the certificate of incorporation also issues a certificate of commencement of business. A public limited company is required to get this certificate prior commencing business.

ROC can refuse to register

ROC can refuse to register a company on various grounds. The Memorandum of Association (MOA) which is filled with the registrar comprises of five clauses viz. name clause; objects clause; registered office clause; capital clause and liability clause. The registrar needs to ensure that no registration is allowed for companies having an objectionable name. The registrar could also decline to register any company which has unlawful objectives.

The role of ROC continues even after the registration of a company

There is no end to the association of the ROC and a company. For instance, a company might require changing its name, objectives or registered office. In every such instance, a company would have to intimate the ROC after completion of the formalities.

Filling resolutions with the Registrar of Companies

As per the provisions contained in section 117 of the Companies Act, every resolution is required to be filed with the ROC within 30 days of being passed. The Registrar of Companies needs to record all such resolutions. The Company law has also laid down the penalty in case of failure to file the resolutions with the registrar within the stipulated time. In other words, a company is required to intimate the Registrar of Companies concerning all of its activities which includes appointing directors or managing directors, issuing prospectus, appointing sole-selling agents, or the resolution regarding voluntary winding up, etc.

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