The process of incorporating a company in India can broadly be divided into the following four steps 1:
Select a few suitable names, up to a maximum of six names, indicative of the main objectives of the company. The proposed name should not resemble the name of any other company already registered, and should not violate the provisions of the Name Availability Guidelines issued by the Ministry of Corporate Affairs (MCA). The application for reservation of name must be submitted online with the Registrar of Companies (ROC) for their approval. Filing a name application in advance is optional and can be clubbed with the application form.
The Memorandum of Association and Articles of Association (the governing charter) of the proposed company must be drafted in accordance with the applicable provisions of the Companies Act, 2013 and are subject to the Foreign Direct Investment (FDI) policy of the Indian government, as amended from time to time.
The fourth step is to apply for the registration of the company. After the name is approved, a request for allotment of director identification number (up to three directors), reservation of title, incorporation of company and appointment of Directors shall be filed in the SPICe+(Simplified Proforma for Incorporating Company Electronically Plus) form. This must be submitted online along with the prescribed filing fees, stamp duty, Memorandum and Articles of Association and other supporting documents duly signed and certified. The ROC, after scrutiny of documents submitted online, approves the company incorporation application and issues the digitally signed Certificate of Incorporation, and allots the Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). All companies in India are required to have a PAN and TAN for filing income tax and other tax returns with the regulatory authority.
The Ministry of Corporate Affairs introduced e-form AGILE-PRO vide notification dated 29 March 2019 where the incorporation application, (SPICe+) shall be accompanied by e-form AGILE-PRO containing an application for registration of the following numbers:
With the objective of improving the ease of doing business, the MCA, in January 2016, set up the Central Registration Center (CRC) for processing the e-Forms for Name Availability and Incorporation. This Government Process Reengineering (GPR) initiative is expected to result in speedier processing of incorporation-related applications, uniformity in the application of rules, and will help eradicating discretion. It will also be supplemented by intensive monitoring aimed at processing these e-forms in one or two days
Timeline : The entire process of incorporation can be completed in four to five weeks.
Formation Cost : The cost of formation depends upon the authorized capital of the company. Also, the total statutory fees payable to the regulatory authority vary depending on the state in which the registered office will be situated.