COMPANY INCORPORATION

COMPANY INCORPORATION

The incorporation of a company refers to the legal process that is used to form a corporate entity or a company. An incorporated company is a separate legal entity on its own, recognized by the law. These corporations can be identified with terms like ‘Inc’ or ‘Limited’ in their names. It becomes a corporate legal entity completely separate from its owners. A group of seven or more people can come together so as to form a public company whereas, only two are needed to form a private company.

Advantages of Incorporation

  • Corporate Personality – An incorporated company is a legally recognized entity that exists separately from its owners and shareholders, which is different from partnership companies.
  • Limited Liability – The Companies Act provides that in event of a company being shut down, the members of the company are solely liable to contribute to the assets and liabilities of the company. It is in accordance with the Companies Act – Section 34(2).
  • Perpetual Succession – As provided by the Companies Act Section 34(2), an incorporated company has the characteristic of perpetual succession.
  • Transferable Shares – Section 82 of the companies act states that ‘The shares or other interest of any member in a company shall be movable property, transferable in the manner provided by the articles of the company.’
  • Separate Property – An incorporated company as a recognized legal entity is permitted to own its own funds and also other assets. ‘The property of the company is not the property of shareholders, it is the property of the company.’
  • Capacity to Sue – As a separate legal entity, an incorporated company has the right to sue other people in addition to companies. In turn, it can be sued by other companies and people.
  • Flexibility and Autonomy – The company has an autonomy and independence to form its own policies and further, implement them. However, they are subject to the general principles of law, equity and a good conscience.

Steps involved in the incorporation of a company

  • Ascertaining Availability of Name
  • Preparation of Memorandum of Association and Articles of Association
  • Printing, Signing and Stamping, Vetting of Memorandum and Articles
  • Power of Attorney
  • Other Documents to be filed with the Registrar of Companies are Consent of directors, Notice of Registered Address and Particulars of Directors.
  • Statutory Declaration in e-Form No.1
  • Payment of Registration Fees
  • Certificate of Incorporation

General documents Required for Company Registration

  • PAN Card
  • Address Proof like Passport, Election Card or Voter Identity Card, Ration Card, Driving License, Electricity Bill, Telephone Bill, Aadhaar Card
  • Residential Proof like Bank Statement, Electricity Bill, Telephone Bill, Mobile Bill
  • Registered Office Proof
  • The identity and address proof as detailed in the article must be submitted for all the shareholders of the Company