A certificate of Incorporation is a legal document or license relating to the establishment of a company. It is issued by the state government or, in some states, by a non-governmental entity. It proves the company or corporation’s registration under the Companies Act 2013. After reading this article, the readers will be able to understand:

• The significance and purpose of the certificate of incorporation.
• Step-by-step procedure for getting the Incorporation certificate.
• Different types of companies and their legal incorporation requirements.
• How can Finocircle help individuals apply for incorporation certificates more efficiently?

Legal frameworks under the Companies Act 2013

In India, incorporation is governed by the Companies Act 2013. Sections 3, 7, and 12 are mainly related to the certificate of incorporation.

Section 3: Section 3 deals with the requirements for naming a company.

Section 4: Section 4 deals with incorporating a company by registration.

Section 7: Section 7 describes the procedure for applying for the certificate of incorporation (COI).

Section 12: Section 12 ensures the corporation or company has a registered office address.

Role of Ministry of Corporates (MCA)

In India, a certificate of corporation (COI) is issued by the Ministry of Corporate Affairs (MCA). It monitors whether the companies comply with the rules and regulations by verifying the Memorandum of Association (MOA), Articles of Association (AOA), and other required documents. MCA also has an online portal where companies can apply online for the certificate of incorporation more quickly and efficiently.

Prerequisites for Obtaining a Certificate of Incorporation

Basic requirements:

Some requirements must be fulfilled before applying for the certificate of incorporation.

Digital Signature Certificate (DSC): A Digital Signature Certificate (DSC) is compulsory for signing the documents digitally to the Ministry of Corporate Affairs (MCA) to ensure authenticity and security. The digital Signature Certificate (DSC) is issued by the Certifying Authority (CA), and every company director must have it.

Digital Identification Number (DIN): The Director Identification Number (DIN) is a unique identification number assigned to the company’s directors, ensuring company transparency. Individuals can apply for the Digital Identification Number (DIN) on the MCA portal or can get it through the SPICe+ form during the incorporation application process.

Unique Company’s Name: Before applying for the certificate of incorporation, selecting a unique and appropriate company name that complies with the naming guidelines is essential. The chosen name’s availability must be checked on the Reserve Unique Name (RUN) service on the Ministry of Corporate Affairs (MCA) portal.

Address of company: Companies in India should also notify their address to the Registrar of Companies (ROC) using Form INC-22 within 30 days of incorporation.

Documents Requirements

Various documents are required for applying the certificate of incorporation:

Memorandum of Association (MOA): Memorandum of Association (MOA) specifies the company’s objectives and the purpose of its formation. All the stakeholders must sign a Memorandum of Association (MOA).

Articles of Association (AOA): Articles of Association (AOA) is a document that contains the company’s internal rules and regulations, the roles of directors and shareholders, and other important information.

Declaration forms and affidavits: Declaration forms like INC-9 include the declaration by directors. These declaration forms prove that the company complies with the Companies Act 2013.

Identity and address proofs:

The directors must also submit valid identity proofs such as a PAN card or passport, address proofs, utility bills, etc. These documents increase the credibility and reliability of the stakeholders and directors.

Consent of Directors:

The directors are also directed to submit their consent to act as directors using Form DIR-2, ensuring they are responsible for every activity in the company.

Registration process

There are several steps to take to register for the certificate of incorporation.

Pre-registration steps:

Name availability check: The individual must use the Reserve Unique Name (RUN) service to ensure their company name is unique and hasn’t already been taken. This also ensures that the company’s name complies with the naming guidelines under the Companies Act 2013.

DSC and DIN application: If the directors don’t already have a DSC, they must apply for one to sign the documents during the digital incorporation process. Moreover, individuals intending to be the company’s directors must apply for a DIN to ensure transparency. If an individual performs as a director for the first time, they can get the DIN generated automatically when filling out the SPICe+ form. The documents must be double-checked to avoid any mistakes since they can cause delays in the process.

Filing Procedures

SPICe+ Form submission:

The companies must submit the Simplified Proforma for Incorporating a Company Electronically (SPICe+) form, an online form integrated with several services, such as name reservation, DIN allotment, etc., to make the filing process efficient.

Required attachments and annexures:

Electronic versions of Documents such as memorandums of association (MOA) and articles of association (AOA) must be submitted. Moreover, proper identity, address proof, and declaration forms like INC-9 must also be attached.

Payment of registration fee:

After filing and attaching all the required forms, the registration can be paid online on the MCA portal accordingly.

Post filing steps:

After successfully applying, the individual must track the status of their application on the MCA portal using the Service Request Number (SRN) assigned during the application submission. If the Registrar of Companies asks for additional documents, the individual must respond earlier to avoid delays. Once approved, the Registrar of Companies issues the Certificate of Incorporation (COI) online, which the company can download.

Types of Companies and Specific Requirements for certificate of incorporation

Private company:

A private company is a business or firm that can only be owned privately. The public cannot buy its shares. According to [SECTION 2(68)], the company can only have between 2 and 200 members. It requires MOA, AOA identity proofs, address proofs, and declaration forms like INC-9 and DIR-2 for applying. Private companies are also required to conduct annual general meetings (AGMs) and must file annual returns using form MGT-7 and financial statements using form AOC-4

Public Companies:

When a private company “goes public,” it becomes a public company. It contains at least seven shareholders and three directors. The public can buy its shares when a company transforms into a public company. A public company must submit a detailed financial record, a prospectus inviting the public to purchase shares, and a board resolution for appointing directors. Moreover, public companies must also do regular (Security Exchange Board India) SEBI compliance filings to issue shares. They must also conduct annual audits by certified chartered accountants.

One-person company (OPC):

A one-person company (OPC) is a type of company that an individual privately owns. The minimum number of stakeholders should be 2, while a single person can form a one-person company. Moreover, an Indian resident nominee must be appointed to take over the company in case of unforeseen circumstances, e.g., the director’s death. A one-person company must file annual returns and financial statements.

Contents of Certificate of Incorporation (COI):

The Certificate of Incorporation (COI) contains information such as the company name, company Identity Number (CIN), Date of incorporation, type of company, registered office address, PAN and TAN numbers, and company object.

Post Incorporation Compliance:

Companies must fulfil some compliance requirements after incorporation to comply with the laws and ensure smooth operations.

Immediate Requirements:

PAN and TAN registration: Companies must register for a Permanent Account Number (PAN) for tax-related transactions and a Tax Deduction and Collection Account Number (TAN) to deduct taxes at the source (TDS).

GST registration: Companies must also register for Goods and Services Tax (GST) if their income exceeds 20 lac INR for services and 40 lac INR for Goods.

Company’s Bank Account: A bank account in the company’s name must be opened for financial activities.

Professional Tax Registration:

If it has employees, a company must register for professional tax. In this type of tax, the tax is deducted from the employee’s salary, and then the collected tax is paid to the state government.

Ongoing Compliance:

The company must file annual returns using forms MGT-7 and AOC-4 to comply with the rules and regulations. Moreover, they must submit audited financial statements, including balance sheets, profit and loss accounts, cash flow statements, etc. Private companies must also arrange at least two board meetings annually, while public companies must arrange at least four board meetings per year.

How Finocircle Can Help You Obtain Certificate of Incorporation?

Finocircle is a company that provides expert compliance and accounting services. Since the application process for a certificate of incorporation is very complex and time-consuming, Finocircle helps individuals simplify the process in many ways. Individuals can get help from Finocircle and set up a smooth business that complies with the legal requirements.

Meeting the Legal requirements:

Finocircle’s expert team understands the legal requirements for the incorporation application and can help the individual avoid mistakes while applying for incorporation certificates. It can help prepare essential documents like the Memorandum of Association (MOA) and Articles of Association (AOA). It also helps register PAN, TAN, and GST. Moreover, individuals can also receive comprehensive guidance on how to apply for a Digital Signature Certificate (DSC) and Director Identification Number (DIN).

Time saving:

Another advantage of Finocircle’s services is that individuals can save time.

Cost-effective: Finocircle services are also affordable, and new companies can use them without spending large amounts of money.

Legal Implications:

There are many legal implications for a company once it gets incorporated.

Legal Status post Incorporation:

After a company gets incorporated, it becomes a separate legal entity independent of its owners and directors. It can then own property, sign contracts, and file legal cases.

The company is officially recognized by the Companies Act Law 2013, which ensures that it complies with the rules and regulations.

Rights and obligations:

The company must adhere to the rules and regulations, file annual returns, and pay taxes, such as GST and corporate taxes.

Rights of Stakeholders:

Each employee must be given rights. The stakeholders have the right to participate equally in every decision-making process. Moreover, the directors have the right to manage the company’s affairs. The directors must make decisions that benefit the company instead of just considering their personal gain.

Perpetual Succession:

The company’s existence is not affected by any circumstance, such as a person’s death or resignation, until it is dissolved legally. This shows that the company is reliable and credible.

Limited liability:

The stakeholders are only responsible for the money invested in the company, and their personal assets are safe. This protection reduces financial risks, which attracts more people to invest in companies.

Resources and references:

Individuals must visit the Ministry of Corporates (MCA) online portal to incorporate their companies successfully. This site allows individuals to access the SPICe+ form for registration and fill out forms like MOA and AOA.

Government notifications:

Companies should also stay updated with the latest changes in laws to remain in compliance with them and ensure a smooth operation.

Conclusion

A certificate of incorporation is crucial to forming a company in India. An Incorporated company is considered more credible and reliable than a non-incorporated one. Consequently, more people are attracted to invest in those companies. By properly following the steps of applying for the certificate of incorporation, an individual can get their company incorporated without delays. Moreover, the company must know its type and submit the documents according to the requirements since the required documents for every type of company, i.e., private, public, and one-person companies, are different.