Company incorporation in India: benefits of registering company
                     COMPANY INCORPORATION IN 
INDIA: BENEFITS OF 
REGISTERING COMPANY
In the article we have discussed about the 
company incorporation features and the types 
of company filing available in detailed manner.
Chiefly, India is a major place where the start-
ups and the entrepreneurs are growing rapidly. 
Company incorporation is not an easier task. 
Choosing your business is easy, but you have to 
register your company under the right sector. 
The registered company gains more advantages 
compared to other companies. Majority of the 
people desire to incorporate a registered 
company having separate legal entity in their 
eyes of laws.
Moreover, company refers to the mode of doing business. 
Mostly, it depends on what are your expansion plans, future 
team size, funding requirements and business vision. There 
are several options like private limited company, public 
limited, one Person Company and limited liability 
partnership; the most preferred option will be 
private limited company. This is due to enormous benefits 
associated with the business structure.
COMPANY INCORPORATION AND COMMENCEMENT STEPS:
First of all, formation of a company is a long and 
complicated process. The foremost step 
involved in forming the company is company 
incorporation. After that, there are several 
other procedures followed by the company 
before the commencement of the business. The 
company formation is an early and initial task. It 
involves certain legal formalities and procedures 
to be done at the initial stages. The authorities 
have the special powers and system that are to 
be followed by each and every business 
organisation for the business commencement.
For instance, when a human being takes birth, 
his body parts are the immense element which 
is being formed before taking the birth. 
Similarly, when a company is formed, before 
that it has its several aspects which have to be 
built after which the company is taken into an 
account to commence its business:
 Promotion of a company
 Registration of a company
 Certificate of incorporation
 Commencement of business
Promotion of a company:
The process of business promotions comes 
when someone comes up with the good idea 
and that idea is converted into action. (i.e.) 
the formation of the firm and commencement 
of the business. It is the effort thrown by the 
members of the company put to make the 
company.
A successful promoter is the creator of 
wealth. The person who is related to the 
promotion of a particular business or an 
enterprise is known to be a promoter
For example, Dhirubhai Ambani is the 
promoter of Reliance Industries. He created 
the idea of starting a business and takes all the 
measures required for bringing the enterprise 
into the existence. Moreover, the promoter 
finds out the way to generate the money, 
search business idea, arranges for finance, 
gather resource and establish a going concern. 
The company law does not give any legal 
status to promoters. He stands in fiduciary 
position.
There are different types of the 
promoter, occasional promoters, 
company promoter, financial 
promoter, entrepreneurs, 
lawyers, and engineers etc. They 
all play different roles during 
the company incorporation, and 
all of them only hold a fiduciary 
position until such company is 
incorporated.
Once the promoters have 
decided to launch a company 
next step is to select a name for 
the company and get it 
registered with the registrar of 
companies of the state in which 
the registered office of the 
company is to be situated. An 
application with three names, in 
the order of their priority, is 
filed with the registrar to get 
the name approved.
Registration of company :
Consequently, the company registration is nothing but 
giving birth or existence to a company. A company is 
properly effectively when it is registered under the 
companies act. There are certain procedure for the 
registering the company, it should be followed by each 
and every organisation. Meanwhile, it involves the 
following documents and procedures,
Memorandum of Association:
 It is signed by minimum member that is 7 persons for 
the public company and 2 in case of private company. It 
should be duly stamped.
Articles of Association:
 The document is signed by all persons who have signed 
the memorandum of association.
List of directors:
A list of directors with their names, address, and 
occupation is prepared and filed with the registrar of 
the companies.
Written consent of the directors:
A written consent of the directors that they had 
agreed to act as directors has to be filed with the 
registrar of the company along with a written 
approval to the effect that they will take the 
qualification shares and will pay for them.
Notice of the address of the registrar office:
Consequently, it is also necessary to file the notice of 
the address of the company’s registered office at the 
time of incorporation. It is to be provided within 30 
days after the date of incorporation.
Statutory declaration:
A statutory declaration mentioning that the 
requisites of the act and the rules there-under 
have been compiled. It must be signed by an 
advocate of the Supreme Court entitled to 
appear before a high court or a practicing 
chartered accountant in India, who engages in 
the company incorporation or by a person 
indicated in the article as a director, managing 
director, secretary or manager of a company. 
Moreover, it is also to be filed with the registrar 
of the company.
Company Incorporation certificate
The registration of the memorandum of the 
association, the article of association and 
other documents are filed with the registrar of 
the company. After getting fulfilled with the 
application & documents submitted, Registrar 
will issue the Certificate of incorporation’. A 
certificate of incorporation is the ultimate 
proof for the existence of a company.
Certificate of Commencement of Business
As soon as a private company gets the certification of 
incorporation it can start its business. Once the certificate of 
incorporation is received by the company, a public company 
issues a prospectus for inviting a public to subscribe to its 
share capital. It fixes the minimum subscription in the 
prospectus. Then it is required to sell the minimum number 
of shares mentioned in the prospectus.
After completing the sale of the required number of shares, 
the certificate is sent to the registrar along with the letter 
from the bank stating that all the money is received. The 
registrar then inspects the documents. If all the legal 
formalities are done then the registrar issues a certificate 
known as ‘certificate of commencement of businesses. This 
is the conclusive evidence for the commencement of 
business for the public.
COMPANY INCORPORATION – TYPES:
The different types of company formation are:  
Private limited company, public limited 
company, one Person Company, Nidhi 
Company, proprietorship registration, section 8 
company, limited liability partnership, 
Partnership firm registration, non-banking 
finance companies etc.
Private limited company registration:
Private limited company registration offers 
multiple benefits such as ease of formation, 
limited liability, freely transfer of shares, easy 
to raise funds, etc. Private Limited Company is 
nothing but a privately held business with a 
minimum of 2 and maximum of 200 members.
Public limited company registration:
A public company has to follow much more consequences 
compared to a Private limited company. It can deal in 
both secured and unsecured debts. A public limited 
company allows you to trade in the market and issue 
shares, debentures and accept deposits. Similarly, a 
public limited company registration is always beneficial 
because a public limited company is preferred to provide 
big financial loans as compared to 
Limited liability partnership and Firms.
One person company registration:
Moreover, Section 2(62) of Companies Act defines a 
one person company as a company which has only one 
person as its member. Furthermore, members of a 
company are nothing but subscribers to its 
memorandum of association. So, an OPC is a company 
that has only one shareholder as its member.
Section 8 company registration:
The primary objective of the section 8 companies are 
working for the development of the society, protection of 
the earth and environment, working in the field of art, 
commerce, literature, sports, protection of living creatures, 
research, and development, etc. without earning any 
profit. In other words, section-8 Company is a non-profit 
organization whose main aim is to contribute its effort for 
the development and betterment of the society, but under 
companies act this non-profit organization is known as 
section-8 Company.
Limited liability partnership:
Further more, the Limited liability partnership is the good 
choice for those who are involving in the business of 
consultancy. LLP have little compliance to follow as 
compared to other companies. Under Indian Partnership Act, 
1932 the registration of partnership firm, but if any person 
wants to run LLP, and then he shall have to take a certificate 
of registration from the Registrar and register the LLP 
agreement. Consequently, all the details of the business such 
as profit & loss sharing ratio amount of capital invested 
should be mentioned in the LLP agreement.
Non-banking finance companies:
In essence, NBFCs or Non-banking financial company as it is 
commonly known as in India is the financial institution that provides 
the banking services without any bank licenses. Moreover, they are 
allowed to perform some banking activities but they do not require 
any pre-banking licenses for such activity. The NBFCs in India runs 
under the companies’ act which came into place in 1956. Services 
provided by NBFCs include investment, hire purchase, and chit 
funds.
Proprietorship registration:
Besides, the proprietorship registration is the good practice 
for the start of small scale business. Moreover, it does allow 
the business to scale up and reach maximum growth as the 
many of the features are missed out in a proprietorship firm. 
In particular, the features of proprietorship are transfer of 
shares; limited liability, easy funding process etc. are major 
things a growing business should possess. A 
proprietorship firm can be converted into a company by 
executing a proprietorship takeover agreement.