Incorporation of a Company is the legal process of forming a company as a separate legal entity. A company comes into existence only after it is duly registered under the Companies Act, 2013.
1. Legal Framework – Incorporation of a Company
- Governing Law: Companies Act, 2013
- Relevant Sections: Sections 3 to 22
- Authority: Ministry of Corporate Affairs (MCA)
- Registrar of Companies (ROC): Appointed under Section 396
2. Who May Incorporate a Company? [Section 3]
A company may be formed by:
- One person (for One Person Company)
- Two or more persons (for Private Company)
- Seven or more persons (for Public Company)
They must subscribe to the memorandum of association (MOA) and comply with all legal requirements.
3. Types of Companies That Can Be Incorporated
- Private Limited Company
- Public Limited Company
- One Person Company (OPC)
- Section 8 Company (Non-Profit)
- Producer Company
- Nidhi Company
4. Important Documents for Incorporation
a. Memorandum of Association (MOA) [Section 4]
- Defines the scope and objects of the company.
- Must be signed by subscribers in the presence of a witness.
b. Articles of Association (AOA) [Section 5]
- Contains rules and regulations for internal management.
c. Declaration by Subscribers and Professionals [Section 7(1)(b)]
- Declaration in Form INC-8 by an Advocate/CA/CS/CWA stating all legal requirements have been complied with.
d. Affidavit by Subscribers and First Directors [Rule 15, Companies (Incorporation) Rules, 2014]
- Declaration of not being convicted of any offense or guilty of fraud.
e. Proof of Address of Registered Office
- Rent agreement, electricity bill, NOC from owner, etc.
f. Identity and Address Proof of Subscribers and Directors
5. Steps for Incorporation of a Company
Step 1: Obtain Digital Signature Certificate (DSC)
- Required for all proposed directors and subscribers.
Step 2: Obtain Director Identification Number (DIN)
- Through SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus).
Step 3: Name Approval via RUN or SPICe+ Part A
- File for reservation of name.
- Check availability on MCA portal.
Step 4: Filing SPICe+ Form (Part A and B)
- SPICe+ includes:
- Name Reservation
- Incorporation
- DIN allotment
- PAN, TAN, GSTIN, ESIC, EPFO, and bank account opening
Step 5: Attach MOA (Form INC-33) and AOA (Form INC-34)
- Digitally signed by subscribers and professionals.
Step 6: Payment of Registration Fees
- Based on company’s authorized capital.
Step 7: Certificate of Incorporation (COI) [Section 7(2)]
- Issued by ROC upon verification.
- Contains Corporate Identity Number (CIN), name, registered office, date of incorporation.
6. Effects of Incorporation [Section 9]
Once registered, the company:
- Becomes a body corporate.
- Can sue and be sued.
- Has perpetual succession.
- Can acquire, hold, and transfer property.
- Can enter into contracts in its own name.
7. Commencement of Business [Section 10A]
- Every company having share capital must file a declaration in Form INC-20A within 180 days of incorporation.
- Must confirm that the subscribers have paid the value of shares agreed.
8. Penalties for Non-Compliance
- Company and its officers may be penalized for false declarations or fraud under Section 447 (fraudulent conduct) and Section 448 (false statement).
- Registrar can strike off the name of the company for non-compliance.
Conclusion
The incorporation process under the Companies Act, 2013 ensures legal recognition, limited liability protection, and structured business operations. Proper compliance with incorporation rules is essential for long-term sustainability and governance.