Incorporation of a Company (Section 3 to Section 22 of the Companies Act, 2013)

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.

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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

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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.

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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

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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

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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.

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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.

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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.

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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.

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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.