Tuesday, January 5, 2016

Starting a company in India

(Step by step process)

I suddenly got bit by this bug urging me to figure out how people start a company and it kept bugging me.
So I started my search for information regarding this and found out that it is a very simple process (Now-a-days), with the advent of internet and e-filing concept anyone can start a company without even visiting any government office.
The process can be divided into four major steps.
They are:
  • Applying for DIN (Director Identification Number)
  • Acquiring DSC (Digital Certificate) and Registering DSC with MCA
  • New User Registration
  • Incorporation of a Company
We will see each of the steps in detail now.
  •  Applying for DIN: 
                   You need to file eForm DIN-1 in order to obtain DIN.
                   Step by step process for DIN can be found at
                   DIN is mandatory for all the persons to be mentioned in Form 1A as proposed promoters.
  •  Acquiring DSC (Digital Certificate) and Registering DSC with MCA
                  While the DIN Application is being processed, you should apply for a Digital Signature Certificate (DSC). 

                   Acquire DSC -A licensed Certifying Authority (CA) issues the digital signature. Certifying Authority (CA) means a person who has been granted a license to issue a digital signature certificate under Section 24 of the Indian IT-Act 2000.Some of the vendors who provide DSC can be found at http://www.mca.gov.in/MCA21/dca/common/certifying-new.html
                   You can select the level of security and the number of years of validity and the cost for DSC depends on these. Most vendors will deliver the DSC to you via mail with instructions on how to activate it. (DSC should be acquired for only one of the Directors who will be authorized to make submission to ROC/MCA on behalf of all the promoters).

                 Register DSC -Role check for Indian companies is to be implemented in the MCA application. Role check can be performed only after the signatories have registered their Digital signature certificates (DSC) with MCA. The step by step process for role check can be found at

  • New User Registration
                  To file an eForm or to avail any paid service on MCA portal, you are first required to register yourself as a user in the relevant user category, such as registered and business user.
                 Registration can be done at
  •  Incorporation of a Company
                Once the DIN and DSC has been acquired we can go ahead and apply for the name of the company to be registered, by filing Form1A.

                While filling the Form1A, Once the DIN's of the promoters of the company,most of the fields in the form are automatically filled.Before short listing the names for your company, you should check if the name is taken by another other company or not by checking it at

                 Once the form is filled and signed with a DSC by the promoter you have to login to MCA and submit the form online. Application fee of Rs 500 has to be paid for the Form1A. You will get a Service Request Number (SRN) after paying the fee. Status of the application can be tracked using the SRN. 
                Name approval usually take somewhere between 5-10 days. After the name has been approved you have to incorporate the company within 60 days.

               After applying for the name of the company we can start preparing the documents required to incorporate the company. The required documents and the forms to be filled depends upon the proposed company type.
  • Form 1 : Application or declaration for incorporation of a company
  • Form 18 : Notice of situation or change of situation of registered office
  • Form 32 : Particulars of appointment of managing director, directors, manager and secretary and the changes among them or consent of candidate to act as a managing director or director or manager or secretary of a company and/ or undertaking to take and pay for qualification shares
              The above three forms are used while incorporating a private limited company. There are some attachments that have to be attached while submitting these three forms.
The attachments are:
  • Memorandum of Association (MoA)
  • Article of Association (AoA)
  • Power of Attorney (PoA)
  • No Objection Certificate (NOC)
 Memorandum of Association (MoA): MoA states what the company can do. You can search the internet for sample of  MoA and modify them. Or you can hire a professional.

Article of Association (AoA): AoA states the rules about  how the company is to be run. You can either adopt Table A of the Companies Act or make a customized AoA. You can search the internet for sample of  AoA and modify them. Or you can hire a professional.

Power of Attorney: All the promoters of the company will have to execute a Power of Attorney to the name of any one of the promoters, authorizing him to make all submissions and do all the necessary things to incorporate the company.PoA has to be executed on a 100 rupee stamp paper

No Objection Certificate: In case, if the promoters who filed for approval of the name of the company in Form 1A are different from the one who files the Form 1, then an NOC will have to be obtained from the original promoters mentioning that they have no objection in the new promoters incorporating the company.

Form 1: All the above four attachments has to be attached with Form 1. Form 1 requires you to fill in the Authorised Capital of the company. Based on the authorized capital the Stamp duty for Form 1, MoA and AoA is automatically calculated by the Form 1.The stamp duty has to be paid online in the MCA website. The completed form with all the attachments should be signed (using DSC) by the authorized promoter to apply to ROC for incorporating the company.

Form 18: You have to mention the registered address of the company in this form. The completed form should be signed (using DSC) by the authorized promoter. After the promoter signs the form, it should be signed by a practicing CA/CWA/CS using his/her digital signature.

Form 32: The details of the Directors, Secretary,  etc. of the company are mentioned in this form. Once the DIN is entered most of the form is filled automatically.The completed form should be signed (using DSC) by the authorized promoter. After the promoter signs the form, it should be signed by a practicing CA/CWA/CS using his/her digital signature.

After preparing all the forms and the attachments you should log in to the MCA website and submit the three forms among with their attachments While submitting the forms you should pay the stamp duty and the filing fees.You are given an option to deposit the amounts in the authorized collection banks (http://www.mca.gov.in/MCA21/dca/banks/banks_new.html) or the fees can be paid by the promoter director using his credit card or use online banking.

Once the form has been approved by the concerned official of the Ministry, you will receive an email regarding the same and the status of the form will get changed to Approved.

All the forms can be downloaded from the link :

Picture Courtesy : Tara Hunt

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