Company Formation in India: Steps & Requirements

Company formation in India is the first and most important step for entrepreneurs looking to start a business in the country. It involves selecting the right business structure, completing legal formalities, and registering with the appropriate government authorities. With India’s growing economy and supportive startup ecosystem, understanding the process of company formation is essential for long-term success. This guide will walk you through everything you need to know to get started.

Quick Requirements for Company Formation in India (within 5 days):

• Minimum Directors: 2 (at least 1 Indian resident required)
• Minimum Promoters/Subscribers: 2
• Company Name
• Business Objectives
• Minimum Capital: INR 1,00,000
• Registered Office: Owned or Rented

Preliminary Steps for Company Incorporation in India:

1. Application for Reservation of Name:

   • The first step Company Incorporation in India is reserving its name. Propose up to 6 names in order of preference, ensuring none are prohibited under the Indian Companies Act, 2013. File Form INC-1 with the required fees, digitally signed using a Digital Signature Certificate (DSC). Directors must obtain their Director Identification Number (DIN). For company formation in India as a Wholly Owned Subsidiary (WOS) of a foreign company, a board resolution on the company’s letterhead is required and must be authorized by the Indian Consulate. Foreign directors can also authorize an Indian resident to digitally sign the incorporation forms, ensuring smooth compliance with local regulations.
   • Note: The approved name is reserved for 60 days from the date of approval.

2. Finalizing Main Objects and Memorandum & Articles of Association (MOA & AOA):

   • After name approval, finalize the company’s objectives and draft the MOA and AOA.
   • MOA should follow the format in Table A, B, C, D, or E, and AOA should adhere to the format in Table F, G, H, I, or J as applicable. Two subscribers are required for a private limited company and seven for a public limited company. Foreign subscribers may authorize an Indian resident to sign the MOA & AOA digitally on their behalf.

3. Registered Office:

   • A registered office address is required for incorporation. Provide proof of ownership (Sale/Purchase Deed) or a rent agreement and NOC if rented, along with a utility bill not older than two months.

4. Directors:

   • A Private Limited Company in India must have at least two directors, one of whom must be an Indian resident. Assistance for appointing an Indian Director or Subscriber is available.

5. Filing Digital MOA and AOA with the Registrar of Companies (ROC):

   • After finalizing MOA and AOA, file them electronically in Forms 33 (MOA) and 34 (AOA) with the ROC. Include Form-32 (Spice) and other documents, depending on the authorized capital. Following this, submit PAN and TAN forms within two days. Upon receiving the Certificate of Incorporation, PAN/TAN will be sent via mail and post. The company can begin operations immediately after this.

6. Post-Incorporation Tasks:

   • After obtaining the Certificate of Incorporation, proceed with:
     • Making a company rubber stamp.
     • Printing share certificates.
     • Printing 50 copies of MOA & AOA.

Fee Structure:

• Name application: INR 1,000
• MOA & AOA printing: INR 5,000
• Digital Signature: INR 2,500 (per person)
• DIN form: INR 500 (per person)
• MOA stamping fees: INR 150 per lakh

Capital Fees (Delhi-based Registered Office):

• Authorized Capital: INR 1 Lakh – Capital Fees: INR 2,000
• Authorized Capital: INR 5 Lakh – Capital Fees: INR 2,000
• Authorized Capital: INR 10 Lakh – Capital Fees: INR 2,000
• Authorized Capital: INR 25 Lakh – Capital Fees: INR 32,000
• Authorized Capital: INR 50 Lakh – Capital Fees: INR 82,000

Time Frame: 5 working days (subject to availability of documents with proper signatures).

Post-Company Formation Services in India:

One-Time Services:

• Opening a bank account.
• Appointing the first auditor.
• Share allotment and stamping.
• Registration for GST.
• Obtaining Import Export Code (IEC).

Routine Services:

• Maintaining daily books of accounts.
• Filing quarterly withholding tax returns.
• Filing monthly/quarterly GST returns.
• Managing monthly payroll.
• Preparing and auditing the annual balance sheet.
• Filing income tax returns.
• Submitting annual returns with the ROC.
• Filing FLA returns with the RBI.
• Maintaining statutory registers and minutes books.
• Conducting tax audits if turnover exceeds INR 10 million.
• Performing annual audits for Transfer Pricing (TP).
• Filing FC-GPR and FC-TRS forms with RBI, along with a valuation certificate.
• Consulting on all the above matters.

Note: RBI must be informed about share capital receipts from abroad within one month, and shares should be allotted within six months.

This guide provides a streamlined process for company formation in India, covering all key steps and requirements, ensuring a smooth incorporation process.