Registering Company in India

Type of Business entities in India:

  • Private Limited Company

  • Public Limited Company

  • Unlimited Company

  • Partnership

  • Sole Proprietorship

Private Limited Company

A private company is a company which has the following characteristics:

  • shareholders’ right to transfer shares is restricted;

  • the number of shareholders is limited to fifty; and

  • an invitation to the public to subscribe to any shares or debentures is prohibited.

Public Limited Company

A public company is defined as a company which is not a private company. The following conditions apply only to a public company:

  • It must have at least seven shareholders.

  • A public company is not authorized to start business upon the grant of the certificate of incorporation. In order to be eligible to commence business as a corporation, it must obtain another document called “trading certificate”.

  • It must publish a prospectus or file a statement in lieu of a prospectus before it can start transacting business.

  • A public company is required to have at least three directors.

  • It must hold statutory meetings and obtain government approval for the appointment of the management.

There are several other provisions contained in the Companies Act 1956 which are applicable only to public companies and should be consulted.

Applicable law

The Indian Companies Act of 1956 : The Companies Act of 1956 sets down rules for the establishment of both public and private companies. The most commonly used corporate form is the limited company, unlimited companies being relatively uncommon. A company is formed by registering the memorandum and articles of association with the State Registrar of Companies of the state in which the main office is to be located.

Corporate Documents & Registration of a Company

An application for registration should be submitted to the registrar of companies with the following documents:

Addresses of Registrar of companies and Regional Directors can be found on:

1. Memorandum of Association;

2. Articles of Association;

3. A declaration signed by a person named in the articles of the proposed company as a director, manager, or secretary of the company, or by an advocate of the Supreme Court or High Court, or by an attorney entitled to appear before the High Court, or by a chartered accountant practicing in India stating that all the requirements of the Companies Act 1956 and the applicable rules with respect to the registration and other matters have been complied with;

4. A list of persons who have consented to act as directors of the company.

5. If the proposed company is a public company, consent of very person prepared to act as a director must be submitted in a prescribed form;

6. Information about directors, managing directors and managers and secretary must be submitted in a prescribed form;

7. Information about the registered office in a prescribed form;

8. Power of attorney in favor of one of the promoters or any other person, authorizing him/her to make corrections in the documents submitted to the registrar of the companies, if it becomes necessary; and

9. Applicable registration fee payable to the registrar of the companies.

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