A private limited company is a voluntary association of not less than two and not more than two hundred members, whose liability is limited i.e. the transfer of whose shares is limited to its members and who is not allowed to invite the general public to subscribe to its shares or debentures. The Indian Companies Act, 2013 contains the provisions regarding the legal formalities for setting up of a private limited company.
NOTE: The directors can also be the share holders.
Step I : Getting DIN
DIN can be obtained by making an application online. All the existing and intending Directors have to obtain DIN within the prescribed time-frame as notified in Sections 266A to 266G of Companies (Amendment) Act, 2006.
Step II : Getting DSC
Digital Signature can be obtained from any of the Certifying Authorities in India. It is required as all the filings done by the companies under MCA21 e-Governance programmed are need to be filed online with the use of Digital Signatures by the person authorized to sign the documents.
Step III : Name Filing
After finalization of name, an application of name availability has to be filed in form 1. Please note that selection of name is subject to Guidelines issued by MCA.
Step IV : Drafting Of MOA & AOA
MOA is a document that sets out the constitution of the company. It contains the main objectives, incidental/ ancillary objectives for the attainment of the main objectives, other objectives and the scope of activity of the company and also describes the relationship of the company with the outside world.
AOA contains the rules and regulations of the company for the management of its internal affairs. It states the authorized share capital of the proposed company and the names of its first/ permanent directors
NOTE : While the Memorandum specifies the objectives and purposes for which the Company has been formed, the Articles lay down the rules and regulations for achieving those objectives and purposes.
Step V : Filing Of Form 1, 18 & 32
Form 1 – It is an application or declaration for incorporation of a company along with MOA & AOA.
Form 18 – It is an application to be filed by one of the directors of the company informing the ROC the registered office of the proposed company.
Form 32 – It is an application stating the fact of appointment of the proposed directors on the board of directors from the date of incorporation of the proposed company and is signed by one of the proposed directors.
The ROC will issue Certificate of Incorporation after careful review of documents submitted in the above stated steps. Section 34(1) cast an obligation on the ROC to issue a Certificate of Incorporation, normally within 7 days of the receipt of documents. A Private Limited Company can start its business immediately on receiving the Certificate of Incorporation.
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