What Does “Company Registration Under Companies Act, 2013” Mean?

Company Incorporation is a legal process through which a business files with a government authority to become an established corporation. This formal registration grants the company a distinct legal identity, separate from its shareholders and members. A key benefit of this separation is limited liability, which protects the personal assets of the members from the firm’s liabilities.

The process of registering and incorporating under the Companies Act, 2013, governs the formation, regulation, and dissolution of companies in India. This legislation replaced the Companies Act, 1956, bringing significant changes to streamline procedures and enhance corporate governance. Incorporation is mandatory; no business can legally function as a company without being registered with the Registrar of Companies (ROC.

To initiate this process, company founders must apply on the Ministry of Corporate Affairs (MCA) website, using the  SPICe+ form that was introduced on February 23, 2020. This form is now a mandatory requirement for all new companies incorporated after that date, making it a crucial step in the overall company registration process in India.

What Are the Types of Companies and How Are They Incorporated?

Companies in India are classified based on ownership, liability, purpose, and size. Each type has distinct characteristics, compliance requirements, and advantages. Clear legal procedures exist for the incorporation of different types of companies, enabling entrepreneurs to start their businesses lawfully and efficiently. 

1. Private Limited Company (Pvt. Ltd.)

Private Limited Companies are privately owned and offer limited liability to members. They are suitable for small to medium-sized businesses.

• Regulated By: Companies Act, 2013
• Incorporation: The incorporation of a private limited company under the Companies Act, 2013, involves steps like obtaining DSC and DIN, name approval, filing the Memorandum of Association (MoA) and Articles of Association (AoA), and obtaining the Certificate of Incorporation.
• Ownership: Maximum 200 members; shares cannot be offered to the public.
• Liability: Limited liability protects personal assets.
• Compliance: Moderate regulatory requirements; suitable for startups and growing businesses.

2. One Person Company (OPC)

One Person Companies are ideal for individual entrepreneurs seeking the benefits of a company with minimal compliance.

• Regulated By: Companies Act, 2013
• Incorporation: The incorporation of a one-person company under the Companies Act, 2013, involves applying for name approval, obtaining DSC and DIN, filing the MoA and AoA, and getting the Certificate of Incorporation from RoC.
• Ownership: A single owner controls the company.
• Liability: Limited liability protection for personal assets.
• Purpose: Encourages entrepreneurship with minimal regulatory burden.

3. Limited Liability Partnership (LLP)

LLPs combine the advantages of partnerships and companies, offering flexibility and limited liability.

• Regulated By: Limited Liability Partnership Act, 2008
• Incorporation: The incorporation of an LLP involves applying for name approval, filing the LLP agreement with the Registrar, and obtaining a Certificate of Incorporation under the Limited Liability Partnership Act, 2008.
• Ownership: Managed by two or more partners.
• Liability: Partners are liable only up to their contribution.
• Compliance: Less strict than private or public companies; ideal for professional services and small businesses.

4. Public Limited Company (Ltd.)

Public Limited Companies can raise capital from the public and are listed on stock exchanges.

• Regulated By: Companies Act, 2013
• Incorporation: The incorporation of a public limited company under the Companies Act, 2013 requires at least seven members, name approval, filing of the MoA and AoA, and obtaining a CoI from the RoC.
• Ownership: Minimum 7 members; no maximum limit.
• Shares: Publicly traded; capital can be raised from investors.
• Compliance: High regulatory requirements under SEBI and the Companies Act.

5. Producer Company

Producer Companies are registered to promote the interests of farmers, producers, or primary producers.

• Regulated By: Companies Act, 2013 (Part IXA)
• Incorporation: The procedure for incorporation of a producer company under the Companies Act, 2013 includes submitting a name application, filing a memorandum and articles of association, and obtaining the Certificate of Incorporation from RoC.
• Purpose: Focuses on activities like production, harvesting, processing, marketing, and distribution of primary produce.
• Compliance: Must follow specific provisions under the Companies Act, 2013, related to producer companies.

6. Non-Profit Company (Section 8 Company)

Non-Profit Companies are formed to achieve social or charitable objectives rather than earning profits for members.

• Regulated By: Companies Act, 2013 (Section 8)
• Purpose: Established for charitable or social objectives, not profit.
• Profit Distribution: Earnings are reinvested into company objectives.
• Compliance: Must strictly follow Section 8 rules; eligible for tax benefits.

7. Government Company

Government Companies are created to serve public interests and implement government policies in key sectors.

• Regulated By: Companies Act, 2013
• Ownership: At least 51% of shares held by the government.
• Purpose: Provide public services or manage key sectors.
• Compliance: Operates under the Companies Act with government oversight.

8. Foreign Company

Foreign Companies are incorporated outside India but operate in the country to expand their international business presence.

• Regulated By: Companies Act, 2013 (Chapter XXII)
• Registration: Incorporated abroad but operates in India.
• Compliance: Must follow Indian laws and regulations as well as laws of the home country.

What Are the Key Steps Before Incorporating Your Company?

The formation of a company involves several key steps that help turn a business idea into a legally recognized entity. Each stage ensures proper planning, compliance, and readiness before the company starts its operations.

1. Promotion Stage

The promotion stage is the initial phase where the business idea is planned and prepared for legal formation.

• Idea Generation: Promoters conceive the business idea and evaluate its viability.
• Feasibility Study: Conduct market research and resource assessment to ensure the business is feasible.
• Preliminary Documentation: Draft essential documents such as the Memorandum of Association (MoA) and Articles of Association (AoA).
• Resource Arrangement: Secure necessary funding, personnel, and other resources required to start the company.

2. Incorporation Stage

The incorporation stage legally registers the company as a separate entity under the Companies Act, 2013.

• Submission of Forms: File SPICe+ forms along with Memorandum of Association (MOA) and Articles of Association (AOA) with the Registrar of Companies (RoC).
• Certificate of Incorporation: After verification, the RoC issues the Certificate of Incorporation, officially registering the company.
• Digital Signature Certificate (DSC): Required for online filing of company documents.
• Director Identification Number (DIN): A unique identification number for each director.
• Legal Compliance: DSC and DIN enable directors to sign official documents digitally and comply with statutory requirements.
• Name Approval: Apply for company name approval through the MCA portal.

You can also use RegisterKaro’s company name checker tool to verify the availability of your chosen name.

Note: The incorporation process may vary depending on the type of business structure and typically takes 7–15 days to complete.

4. Capital Subscription Stage (For Public Companies)

This stage is specific to public companies to raise funds from the public before starting operations.

• Issuing Prospectus: Public companies raise capital by issuing shares to the public through a prospectus, inviting investors to apply in accordance with legal and regulatory requirements.
• SEBI Compliance: Ensure all Securities and Exchange Board of India (SEBI) guidelines are met.
• Minimum Subscription: Collect the minimum required subscription before commencing business.
• Share Trading: Shares may be listed and traded on the stock exchange.

5. Commencement of Business Stage

This is the final stage where the company begins its official business operations.

• Private Companies: Can start business operations immediately after incorporation.
• Public Companies: Must file a declaration to show that the minimum subscription is achieved.
• Declaration for Commencement of Business (Form INC-20A): Public companies submit Form INC-20A to the RoC, replacing the earlier Certificate of Commencement of Business, to legally begin their operations.

What is the Procedure for the Incorporation of a Company as per the Companies Act?

Incorporating a company involves a series of legal steps and documentation to ensure that the business is registered correctly and operates transparently. 

Step 1: Selecting the Business Type and Name

The first step is to decide the type of company and secure a unique name for it.

• Choose Company Type: Decide whether to register a Private Limited Company, Public Limited Company, LLP, OPC, or Producer Company.
  
• Check Name Availability: Use the MCA portal to search whether the desired name is available.
  
• Reserve Name: Apply through RUN (Reserve Unique Name) to book the name officially.
  
• Importance: The name must reflect the business and meet legal requirements, avoiding conflicts with existing companies.

Step 2: Preparation of Legal Documents

After finalizing the name, prepare key documents that define the company’s operations and rules.

• Memorandum of Association (MoA): Specifies the company’s objectives, business field, and official name.
  
• Articles of Association (AoA): Contains rules for internal management, director responsibilities, and operational procedures.
  
• Additional Documents: May include declarations, affidavits, and proof of registered office address.

Step 3: Clauses in Memorandum of Association (MoA)

The MoA contains essential clauses that define the company’s structure and purpose.

• Name Clause: Specifies the official name of the company.
  
• Registered Office Clause: Indicates the location of the company’s registered office.
  
• Object Clause: States the main objectives the company will pursue.
  
• Liability Clause: Defines whether members’ liability is limited or unlimited.
  
• Capital Clause: Mentions the authorized share capital of the company.
  
• Association Clause: Confirms that the founding members intend to form the company.

Step 4: Procuring Digital Signature Certificate (DSC) & Director Identification Number (DIN)

DSC and DIN are mandatory for legal filings and director verification.

• Digital Signature Certificate (DSC): Required for signing forms electronically on the MCA portal.
  
• Director Identification Number (DIN): Each director obtains a DIN by filing Form DIR-3 with the RoC.
  
• Importance: Ensures secure and verified digital filing of company documents.

Step 5: Filings with the Registrar of Companies (ROC)

After preparing documents, the company must file the required forms with the RoC.

• Form SPICe+: Simplified Proforma for Incorporating Company Electronically; includes PAN and TAN applications.
  
• Form INC-9: Declaration by directors and subscribers confirming compliance with legal requirements.
  
• Form AGILE-Pro: For GST, EPFO, ESIC, and other statutory registrations.
  
• Purpose: Legal recognition and registration of the company.

Step 6: Payment of Fees and Stamp Duty

Payment of government fees and stamp duty is required based on the company’s authorized capital.

• Fee Calculation: Depends on authorized capital; varies for different types of companies.
  
• Stamp Duty: Paid on MoA and AoA according to state regulations.
  
• Importance: Ensures legal validity and compliance with statutory requirements.

Step 7: ROC Verification

The Registrar of Companies examines all filed documents for accuracy and compliance.

• Scrutiny: RoC checks MoA, AoA, and all forms submitted.
  
• Corrections: Authorities request corrections if they find any discrepancies.
  
• Certificate Issuance: Authorities issue the Certificate of Incorporation once they approve the application.

Step 8: Issuance of Corporate Identification Number (CIN)

Once incorporation is complete, the company receives a unique CIN.

• CIN Details: Appears on the Certificate of Incorporation; used for all official filings and communications.
  
• Purpose: Provides a unique identity to the company for legal, tax, and regulatory purposes.
  
• Significance: Marks the company as a separate legal entity ready to start operations.

Documents Required for Company Registration in India

Incorporating a company under the Companies Act, 2013 requires several important documents to ensure legal compliance and smooth registration.

Document	Purpose / Explanation	Details / Examples
ID Proof of Directors/Shareholders	Verifies the legal identity of directors and shareholders.	Aadhaar Card, PAN Card, Passport, Voter ID, Driving License
Address Proof (Residential & Business)	Confirms residential addresses of directors and the official address of the company.	Residential: Utility bills, Aadhaar, Passport, Voter ID Business/Registered Office: Rental agreement, NOC from property owner, utility bills
Photographs of Directors/Shareholders	Provides visual identification for company records and official filings.	Recent passport-sized photographs
Proof of Capital Contribution	Confirms that the initial share capital has been contributed by the subscribers.	Bank statement, capital deposit receipt, or auditor’s certificate
Memorandum of Association (MoA)	Defines company objectives, scope, capital, and subscriber details. Complies with Sections 4 & 5 of the Companies Act, 2013.	Specifies field of operations, authorized capital, and lists initial subscribers with objectives
Articles of Association (AoA)	Provides internal regulations for company governance, meetings, and voting.	Rules for board and shareholder meetings, voting procedures, management and governance guidelines
Registered Office Documents	Establishes the official legal address for statutory and government communications.	No Objection Certificate (NOC) from the property owner, recent utility bills (electricity, water, gas)

How Much Does it Cost to Register a Company in India?

When registering a private limited company, various government fees, stamp duties, and professional charges apply. Knowing these costs helps plan your budget and ensures smooth incorporation.

Fee Category	Item	Cost/Range
Government Fees	Name reservation fee	Rs. 1,000
	Incorporation fees	– Up to Rs. 1 lakh: Rs. 5,000 – Rs. 1 lakh to Rs. 5 lakh: Rs. 5,000 + 0.01% of amount exceeding Rs. 1 lakh – Rs. 5 lakh to Rs. 1 crore: Rs. 5,400 + 0.005% of amount exceeding Rs. 5 lakh – Above Rs. 1 crore: Rs. 10,150 + 0.001% of amount exceeding Rs. 1 crore
	Stamp duty	Varies by state and capital (From Rs. 135 to Rs. 15,020 for capital up to Rs. 1 lakh)
Professional Fees	Digital Signature Certificate (DSC)	Rs. 2,500 per DSC (depending on the number of directors)
	Professional service charges (MOA, AOA, filing)	Rs. 1,999 (for Indian clients) Varies for Foreign/NRI clients
	PAN & TAN Application Fee	Rs. 443
Post-Registration Costs	Company seal and stationery	Rs. 500 to Rs. 1,500
	Bank account opening charges	Varies by bank
	GST registration (if applicable)	Government fees: Free + Professional charges (if any)

Key Compliance Requirements Post-Incorporation

Once a company is incorporated, it must follow certain legal and regulatory rules to operate smoothly and remain compliant with the law.

1. Statutory Registers

Every company is required to maintain certain registers to keep track of important information. These include:

• Register of Members: Records the details of all shareholders of the company.
  
• Register of Directors and Key Managerial Personnel: Lists all directors and key management staff along with their personal and professional details.
  
• Register of Charges: Contains information about any loans or mortgages taken by the company on its assets.

2. Board Meetings and Annual General Meetings (AGMs)

Companies must conduct regular meetings to make key decisions and maintain transparency:

• First Board Meeting: Must be held within 30 days of incorporation to plan company operations and appoint necessary officers.
  
• Board Meetings: Private companies need at least two board meetings every year, while public companies are required to hold four.
  
• AGM: An Annual General Meeting should be conducted within six months after the financial year ends to discuss financials and other important matters with shareholders.

3. Filing of Annual Returns (Form MGT-7 & AOC-4)

Companies must file annual returns and financial statements to comply with ROC regulations:

• MGT-7: Annual return submitted by all companies containing details of shareholders, directors, and company structure.
  
• AOC-4: Filing of audited financial statements with the ROC.
  
• Penalties: Failure to submit these forms on time may result in fines or legal action.

4. Income Tax and GST Compliance

Companies must follow tax regulations to avoid legal issues:

• ITR-6: Filing of Income Tax Return specifically for companies.
  
• GST Returns: You must file monthly or quarterly GST filings if the company is registered under GST.
  
• Tax Audit: Required under Section 44AB of the Income Tax Act if the company’s turnover exceeds the prescribed limits.

5. Audits and Financial Statements

Maintaining accurate financial records is mandatory:

• Statutory Auditor: A company must appoint an auditor within 30 days of incorporation.
  
• Audited Financial Statements: You must audit the annual financial statements and submit them to the ROC to ensure transparency and compliance.

Common Mistakes & Precautions for Filing an Incorporation Application

Filing the SPICe+ form for company incorporation requires meticulous attention to detail to ensure a smooth and successful registration. Overlooking small errors can lead to delays, rejections, or compliance issues. 

1. Digital Signatures (DSC)

Digital signatures are mandatory for authenticating the application. All proposed directors and the professional (CA, CS, or lawyer) filing the application must digitally sign the SPICe+ form.

Common Mistake: Using an expired or inactive DSC, which leads to immediate rejection. Ensure the DSC is valid before submission.

2. Eligibility of Directors

Directors must meet legal requirements under the Companies Act, 2013. They should not be disqualified due to prior convictions or involvement in fraud.

Common Mistake: Appointing disqualified individuals or overlooking MCA restrictions. Verify director eligibility beforehand.

3. Document Requirements

All documents must be clear, legible, self-attested, and in the prescribed PDF format. Maximum size per PDF in SPICe+ is 6 MB.

Common Mistake: Uploading blurry or oversized documents, or incorrect formats, which delays processing.

4. Proof of Identity

You must submit valid ID proofs such as a PAN card, passport, voter ID, or driving license.

Common Mistake: Submitting expired or mismatched IDs. Always cross-check names and details with the SPICe+ form.

5. Proof of Address

Address proofs must verify both residential and registered office addresses. Acceptable documents include utility bills (not older than two months), bank statements, rent agreements, or NOCs.

Common Mistake: Providing outdated or unsupported address proofs. Ensure documents are current and properly attested.

6. File Accuracy and Completeness

Accuracy is crucial. Double-check that all form fields match the attached documents exactly.

Common Mistake: Errors in names, addresses, or PAN details can result in rejection. Keep scanned copies ready in the correct format.

7. Professional Guidance

Engaging a CA, CS, or lawyer can significantly reduce errors. Professionals ensure documents comply with MCA regulations and help you avoid common mistakes.

Common Mistake: Filing independently without verification, which increases the risk of delays or rejections.

Conclusion

The procedure for incorporation of a company under the Companies Act, 2013, provides legal recognition and protection to businesses in India while ensuring transparency and accountability. By following key steps, choosing the right business type, preparing documents, and obtaining the Certificate of Incorporation with a Corporate Identification Number (CIN), entrepreneurs can establish their ventures legally, gain limited liability, and build trust for a strong start.

For entrepreneurs seeking a seamless company registration experience, RegisterKaro serves as a reliable partner, guiding you through every stage of incorporation and helping your business get off to the right start.

Frequently Asked Questions (FAQs)

1. How to open a company in India legally?

To open a company in India legally, you must first choose the right business structure, like Private Limited, OPC, or Public Company. Next, obtain DSC and DIN for directors, and apply for name approval through the MCA portal. Once approved, prepare the MoA and AoA and file the SPICe+ form online. After successful verification as per Companies Act mandates, the Registrar of Companies issues the Certificate of Incorporation, giving the company legal recognition.

2. How to register an LLP company in India?

Registering an LLP in India requires a minimum of two partners. The process begins with reserving a unique LLP name on the MCA portal. Partners must obtain DSC and DIN, draft the LLP Agreement, and file incorporation documents with the Registrar under the LLP Act, 2008. Once the Registrar approves, it issues the Certificate of Incorporation, and you must file the LLP Agreement within 30 days.

3. What documents do you need for company registration in India?

The documents required for company registration in India include PAN and Aadhaar of directors, proof of residence, proof of registered office address, recent photographs, MoA, AoA, and in the case of LLPs, the LLP agreement.

4. How long does the company registration process in India take?

The company registration process in India usually takes 7–15 working days, depending on document readiness, the type of company, and approval speed from the Ministry of Corporate Affairs (MCA).

5. How to register a startup company in India?

If you want to register a startup company in India, you can opt for Private Limited, LLP, or OPC registration, complete the SPICe+ form, and also apply for recognition under the Startup India scheme for tax and funding benefits.

6. What is the role of the Companies Act, 2013 in the company registration process?

The Companies Act, 2013, governs the entire company registration process in India. It defines the procedure for incorporation of a company, types of companies allowed (Private, Public, LLP, OPC, etc.), compliance requirements, and the legal framework under which businesses operate.