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Company law in India is governed by the Companies Act, 2013, which sets rules for starting, running, and closing a company. The Ministry of Corporate Affairs (MCA) oversees the implementation of this law to ensure businesses follow legal guidelines.
The Act focuses on important aspects like legal compliance, transparency, and accountability in business operations. In addition to this, some industries must follow extra rules set by other regulators like the Securities and Exchange Board of India (SEBI) for stock market-related companies and the Reserve Bank of India (RBI) for financial institutions. These organizations ensure that businesses in their sectors follow specific laws along with the general company law.
Registering a company in India is the first step to legally starting your business. The Companies Act, 2013, sets the rules for company formation, and the Ministry of Corporate Affairs (MCA) oversees the process. Once registered, your business gets a legal identity, along with rights and protections under Indian law.
Choosing the right company type is important because it affects how your business operates and follows legal rules. Some common options include private limited companies, limited liability partnerships (LLPs), and one person company.
Registering your company also helps you access government benefits, protect your business legally, and build trust in the market. The MCA provides an easy online process to complete company registration and ensure compliance with legal requirements.
A private limited company is a popular choice for a corporate business structure in India. The company has a separate legal identity, and there is separation of ownership and management.
A public limited company is the most transparent form of corporate business structure. It’s a popular choice for businesses because it allows shares to be easily bought and sold, and it’s seen as trustworthy by investors.
A one person company (OPC) is a type of small business where there’s only one owner, and their liability is limited to their shares. It’s become a popular choice for solo business owners in India.
An LLP is the simplest business structure to set up in India. It offers limited liability to owners and has fewer compliance requirements compared to other corporate structures.
The Ministry of Corporate Affairs (MCA) manages the company registration process in India. It includes registering the business with the Registrar of Companies (RoC) and obtaining a Digital Signature Certificate (DSC) and Director Identification Number (DIN).
Separate Legal Identity:
Once registered, a company becomes its own legal entity. It can own property, sign contracts, and operate separately from its owners.
Limited Liability Protection:
The personal assets of shareholders are safe from company debts and risks, ensuring financial protection.
Access to Government Schemes:
Registered companies can benefit from government programs like:
Increased Credibility:
A registered company is more trusted by investors, clients, and vendors, making it easier to get funding and partnerships.
Minimum two persons are required to form a Private Limited Company and a maximum up to 200 persons can be a member of a single Private Limited Company.
Minimum two directors are required in a Private Limited Company, with an upper cap up to 15 directors.
Directors are officers of the company who are responsible for managing the company and making the decisions as to its operation on a day to day basis, for the benefit of the shareholders.
Shareholders are the owners of companies limited by shares. As the beneficial owners of a limited company, they are not involved in day-to-day management or financial affairs. They are also called 'members' and they agree to become part of a company by taking a minimum of one share in it. The quantity of shares held by each person represents how much of the business they own.
The Private Limited Company can be incorporated with any amount of capital and there is no lower or upper limit. Further, the government has relaxed the government fees for Incorporation of a Private Limited Company up to an Authorized capital of Rs. 15,00,000/-, however, the stamp duty, which is still levied, varies from State to State.
All the documents mentioned above in point no 1 to 3 need to be self-signed by the respective proposed directors/ members/ shareholders All the utility bills or bank statements shall be less than 2 months old
The broad process of registering a Private Limited company involves following steps:
The process of incorporating a Private Limited Company can take anywhere between 10 to 15 working days, subject to submission of correct information and complete documentation.
Legal Terminus can help you with incorporation of Private Limited Company for you, as and when required, in a hassle-free manner within a reasonable time span and for competitive professional fee. To know more, please book a telephonic appointment with one of our consultants free of charge.
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