Incorporation of Company
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Company Law in India
Company law in India, governed by the Companies Act, 2013, regulates the formation,
operation, and dissolution of companies. The Act is administered by the Ministry of
Corporate Affairs (MCA) and establishes the business operations. It focuses on ensuring
compliance with statutory obligations, maintaining transparency, and defining
accountability structures within the context of legal requirements.
While the Companies Act, 2013, lays the groundwork for governance from a legal
perspective, sector-specific governance requirements may also fall under the purview of
other regulatory bodies, such as the Securities and Exchange Board of India (SEBI) or
the Reserve Bank of India (RBI). These authorities oversee specific industries, ensuring
that entities operate according to their respective frameworks in addition to the
broader provisions of the Companies Act.
What is Company Incorporation in India?
In India, incorporation of a company is the legal process of forming a corporate entity
under the Companies Act, 2013. This process involves registering the company with the
Ministry of Corporate Affairs (MCA), after which the company becomes a separate legal
entity, distinct from its owners, and is recognized by law.
Incorporation applies to entities such as Private Limited Companies (Pvt Ltd), Public
Limited Companies, Limited Liability Partnerships (LLP), One Person Companies (OPC), and
Section 8 Companies. It does not apply to unincorporated entities like sole
proprietorships or general partnerships.
Benefits of Incorporating a Company in India
The process is governed by the Ministry of Corporate Affairs (MCA) and involves registering business with the Registrar of Companies (RoC), along with obtaining a Digital Signature Certificate (DSC) and Director Identification Number (DIN).
Separate Legal Identity
Once incorporated, the company becomes a distinct legal entity. It can own property, sign contracts, and operate independently of its owners.
Limited Liability Protection
Shareholders’ personal assets are safeguarded from company debts or risks, ensuring financial security.
Eligibility for Government Schemes
Incorporated companies can access government schemes such as:
Startup India: Offers tax exemptions, funding support, and easier compliance
requirements for eligible startups.
Make in India:Provides incentives, subsidies, and promotional support for
manufacturing businesses in India
Tax Benefits
Companies in India enjoy competitive corporate tax rates, with special deductions and lower rates available for startups and new manufacturing units, under the Income Tax Act.
Increased Credibility
Registered companies are seen as trustworthy by investors, clients, and vendors, making it easier to secure funding and partnerships.
Perpetual Succession
The company’s existence is not affected by the death or resignation of its shareholders or directors, ensuring long-term stability.
Ease of Ownership Transfer
Ownership can be transferred easily by selling shares, making it simple to attract new investors or transition leadership.
Global Opportunities
Incorporating a company enables businesses to enter international markets, attract Foreign Direct Investment (FDI), and establish a credible presence globally.
Compliance and Legal Safeguards
Incorporated companies are required to comply with Indian company law, including annual filings, financial disclosures, and other legal obligations. This structured compliance helps reduce disputes and ensures smoother business operations.
Eligibility Criteria for Company Registration
As per the Companies Act of 2013 the eligibility criteria for every business entity type varies drastically. Here is a general outline of eligibility criteria for registering your company in MCA.
Checklist for Company Registration
Based on the type of company being incorporated the requirements might vary. However, here is a comprehensive checklist for registering your company in India: