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Steps for Company Formation in India

Steps Company Formation in India

Steps for Company Formation in India

Last Updated on July 2, 2021


A company in India is an artificial person, and its registration is a complex and lengthy process. There are numerous formalities and paperwork that should be complete before you approach the registrar of companies for incorporation. The following are the basic steps that need to be followed for India company incorporation.

Application for name approval

You need the approval of the registrar for the name you propose for your company. It should not be prohibited by the Emblems and Names Act, 1950, and should not be identical or closely resemble any existing company name.

You need to send three preferences of names to the Registrar of the state where the company will be situated. The Registrar is expected to approve the name in 14 days of application.

Preparation of MoA

MoA is the key document of any company and is known as the constitution of the company. It describes the company’s objects and scopes with the outside world. For a public limited company, MoA should be signed by at least seven persons and in case of a private limited company, it should be signed by at least two people. It should also be properly stamped with the company’s seal.

Preparation of AoA

It is the document which states the rules and regulations for the internal working of the organization. A public limited company need not file an AOA and it can adopt the model clause prescribed in Table A, schedule 1 of the act. However, a private limited company needs to submit the AoA duly signed by the signatories.

Preparation of other documents

  • Consent of directors, duly signed
  • Copies of preliminary agreements, MoA, and AoA.
  • Power of Attorney by the promoter in favor of one director or an advocate to supervise the registration process
  • Required information about the registered office to the registrar of companies within 30 days of registration or commencement of business, whichever is earlier.
  • The details of the first directors of the company within 30 days of registration or appointment of such directors.
  • A statutory declaration stating that all the necessary documents have been compiled with. An advocate of a High Court or a Supreme court or attorney of a high court or a practicing Chartered Accountant must sign the declaration.

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Payment of Fees

The prescribed registration fees and document charges are to be paid to the registrar at the time of registration. The amount of fees varies with the amount of nominal capital, in case of companies with share capital, and according to the number of members in case of companies without share capital.

Certificate of Incorporation

Once all the required documents are submitted with the registrar, he makes scrutiny. If the formalities are found in order, then the registrar will issue the Certificate of incorporation, after entering the name in the Register of Companies. The date mentioned on the certificate is the date of incorporation of the company.

Capital Subscription

Once your company is incorporated, the next step is to raise capital. A private limited company can start doing business just after the issue of the certificate of incorporation, but a public limited company cannot. It requires meeting the minimum subscription of share capital as subscribed by the government.

Steps for raising the funds for the public.

  • SEBI approval
  • Filing of Prospectus
  • Appointment of Brokers, Underwriters, and bankers
  • Minimum Subscription
  • Application to Stock Exchange
  • Allotment of Shares

Commencement of Business

After meeting all the capital requirements, a public company receives a Certificate of Commencement without which it cannot start with the business. The business can, hence, be commenced now and your company can function in the required manner. If you are looking to attract US Companies or any other foreign venture, then that is also possible now.

Filing of additional documents

  • A prospectus or a statement in lieu of prospectus has been filed with the Registrar of Companies.
  • A declaration that shares payable in cash equivalent to minimum subscription have been received.
  • A declaration that directors have taken up their qualification shares and have paid the application and allotment money in the same proportion as others.
  • A statement that no money is liable to become refundable to the applicants because of failure to apply for or to obtain permission for shares or debentures to be dealt in on any recognized stock exchange.
  • The statutory of the company or a director files a statutory declaration that the requirements relating to the commencement of business have been duly complied with.


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