In India, registration of the company is also known as company formation of business or incorporation of a company which gives a legal right to do business.
Company Registration Process
Reserve Unique Name (RUN) Form
The first step to is to reserve a name for a company.so an Entrepreneurs has to apply for a Unique name of the company by a SPICE form filling & submit it to the MCA. If shareholders or Entrepreneurs want to incorporate with a name that could be similar to an existing company or LLP or trademark, then prior approval can be obtained from the MCA for use of a name.
Before RUN Web-Form
In the second step before applying for name reservation first fill up a Form INC-1 with a 6 name of choices. In Company formation minimum of 2 Director Identification Number and 1 Digital Signature were required.
After RUN Web-Form
After applying for Run web form a name for a company can be reserved quickly and easily but only one name choice is provided at the same time and an also a Digital Signature is also obtained for at same. The fee for RUN web-form is Rs.1000 per form submission – irrespective of whether the name is approved or not.
The Entrepreneur must first create a free MCA account before applying for RUN web-form. After that logging to the MCA account and choose the type of company to be registered and provide one name choice and check against the MCA database of company and LLP names.
So as per the Companies Incorporation Rules, 2014 states that a company or LLP can be registered with an identical name only it check whether name is similar to the name of an existing company, LLP or trademark. Hence, if in a system check, name is available then it does not
If the name is unique not assigned for any another then it confirms to the Companies Act 2013, name approval would be provided by the MCA and then the applicant would be informed through the email address mentioned on the MCA account.
Director Identification Number Incorporation
In a Company Formation, there must be 2-3 and Director in a Company must have a valid Director Identification Number (DIN). The previous process for DIN could be obtained by any person by filing Form-DIR3 or through the SPICE form while incorporating a company but From 2018, the process for generating DIN has been divided into the following two major categories:
DIN Application with SPICE
First one is by filling a SPICE form for a DIN the details of Directors for whom DIN is to be allotted on incorporation must be filled into the SPICE form along with their PAN or Passport details. In company formation DIN would be allotted for each of the Directors who did not have DIN.
In case a person having DIN is incorporating a new company, SPICE form must still be used and DIN can be entered where ever applicable.
DIN Application using Form DIR-3
In the second one, DIR-3 form can be used only by existing companies for adding a Director from 26th of January 2018. The new DIR-3 form has provisions requesting the CIN of the Company to which the Director would be added and a declaration that the DIN is for adding the person as a Director to the company. Hence, care must be taken by Professionals to ensure that DIN is not wrongly obtained for a proposed Director of a new company.
Zero Fee for Company Formation
In 2018 As per the MCA in an effort to simplify the Company Formation process and spur new Startups has announced zero fee for incorporation so because of that an Entrepreneurs would be able to save a few thousand rupees on incorporation fee. Also zero fees has been announced for the SPICE form, eMOA and eAOA – stamp duty would still be applicable for incorporation as before depending on the state of incorporation.
The MCA in an effort to simplify the Company Formation process and spur new Startups has announced zero fee for incorporation. Hence, it will save a few thousand rupees of Entrepreneurs. Though zero fees has been announced for the SPICE form, eMOA and eAOA – stamp duty would still be applicable for incorporation as before depending on the state of incorporation.