How to incorporate a company in India

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How does one incorporate a company in India? Step 1: Today, before incorporating a company in India, you need to obtain what is called a DIN Number, or the Director's Identification Number. The Director Identification Number is part of a larger initiative to make the entire process possible online. A Director Identification number has to be obtained by anyone who is or wants to be a director of a company in the future. One DIN has to be obtained per person. Although there are no fees to be paid to get a DIN Number, you have to present your Identity Proof, Residence Proof and a photograph ( colour ) Step 2: Get the name of the company approved : The next step is to get your name approved by the Registrar of Companies ( RoC ) in your State or Union territory. Your application should mention four names for your company, in order of preference. Naturally, there should not be an existing company by the same name anywhere else in India. After you have applied, it takes upto 7 days for the RoC to tell you if the name is valid. After the name is approved, it takes two-three weeks to incorporate the company depending on where the company is registered. You have six months after the name is approved within which to prepare all the necessary documents for the company: the Memorandum of Association, the Articles of Association and the Miscellaneous Documents. If you do not prepare the documents within this time frame, you need to re-apply to get your name approved.

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Step 3: Step 4: Prepare and file the necessary documents: The Memorandum and Articles of Association are the most important documents to be prepared, and have to be prepared first. The Memorandum of Association is a document that describes the constitution of the company and contains, among other things, the objectives and scope of activity of the company. The Articles of Association is like the rulebook to achieve the objectives and attain the purpose for which the company was created. It lays down the rules and regulations to be followed by the company for the management of its internal affairs Miscellaneous Documents also need to be filed. These are: a. A declaration of compliance that has been duly stamped b. A notice of the location of the registered office of the company c. A note of who the Directors, Managers and Secretaries of the Company are. d. Authority executed on a non-judicial stamp paper, favouring one of the subscribers to the Memorandum of Association or any other person giving that person the authority to file the documents and papers for registration and to make necessary corrections, if any e. If the Company wishes to appoint any individual as its managing or whole-time director or manager, a copy of the agreement which it wants to enter into with that individual. e. The original letter of the Registrar of Companies indicating that the name sought for is available and valid. f. No objection letters from the directors and promoters of the company

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Step 5: Almost finished! Along with these documents, a registration fee has to also be paid to the Registrar of Companies. The amount of the registration fee to be paid depends on the share capital of the company which is sought to be incorporated. After these steps are taken, the documents are scrutinized by the Registrar of Companies and it asks the persons in charge to make the necessary corrections . When the Registrar of Companies is satisfied that the documents are in order, a 'Certificate of Incorporation' is issued and from that date the company officially comes into existence and can start doing business. For Public Limited Companies : they can now invite the public to subscribe to the share capital of the company. Additionally, a prospectus has to be issued which tells potential investors everything vital they need to know about the company. The Companies Act and SEBI Guidelines prescribe what information has to be provided in the prospectus of a public limited company. Even the prospectus, before the public can see it, has to be filed before the Registrar of Companies. If the Company decides not to approach the public for funding and decides to procure the funding privately, it has to file a statement called the 'Statement in Lieu of Prospectus' with the Registrar of Companies. Once these additional requirements are fulfilled, the Registrar of Companies issues what is called a 'Certificate of Commencement of Business' to the Public Company, after which it can start doing business.

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Every business which has to pay income tax needs to obtain a tax identification number (the PAN Number). For the purpose of avoiding tax payment, a business must also obtain a Tax Deduction Account Number, called the TAN Number. Both the PAN number and the TAN number must be indicated on every return, document and correspondence filed with the Revenue Department. If the business later wants to purchase or sell any immovable property worth more than Rs. 5 lakhs , make a time deposit exceeding Rs. 5 lakhs or purchase and sell securities exceeding Rs. 10 lakhs , the PAN Number has to be included in the documents. Step 6:

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