Creating Private Limited Company In India
August 19th, 2007 | 
Author: Pre-requisites to start a private limited Company in India by foreign citizens:
Step-1:
i) Obtaining Director Identification Number (DIN-1) for all the Directors of the proposed company.
Documents required – Passport of the applicant containing address of the applicant and passport size photograph.
If all the particulars are given, DIN-1 provisional number can be generated in half a day’s time.
DIN-1 application for foreign citizens require attestation by Notary of the country concerned.
Once the signed copy of physical form attested by notary of foreign country is sent to MCA Office, Noida, it will take a week’s time approx to get the number approved. Once approved by the MCA authority, provisional DIN-1 which has already been generated will be final.
ii) Obtaining Digital Signature for at least one Director of the proposed company.
It requires ID Proof, Address Proof and the applicant’s signature on the application form. It will take 2 to 3 days once the application is received duly filled in all respects.
Step-2:
Making online application to ROC for availability of Name in Form 1A.
The particulars required for making this application are:
-Name of the proposed company
-State in which the registered office of the proposed company will be situated
-Main Objects, in brief
-Names of Subscribers to the Memorandum of Association (it is nothing but, first shareholders of the company, who should sing MOA & AOA)
-Proposed Authorized Share Capital of the Company
This process will take 3 to 5 days approx.
Step-3:
Once the name is approved by ROC, then preparation of MOA, AOA, other forms & documents viz., Form 1, Form 18 & Form 32 along with other documents have to be done and filed with ROC.
Approximately it will take a week’s time to complete incorporation formalities.
Q : How many days we have to wait for this getting Name approval and registering ROC
Ans:- Name approval process will take 3 to 5 days. Entire Registration process will take Minimum 15 to 20 days provided all the information has been furnished promptly.
Q: If the director is registering for first Time can we apply without DIN? Or should we apply for DIN first?
Ans:- Applying for DIN is prerequisite before proceeding for registration of the Company
Q: What is “Subscribers to MOA”?
And:- It is nothing but, first shareholders (also known as promoters) of the Company, who should sign the Memorandum & Articles of Association.
Q: Can registration be done in any part of India?
And:- Place of registered office can be in any part of India. Depending upon place of registered office, registration has to be done in the respective State.
Q: Need details about all the forms
Ans:- These are Statutory forms which have to be filed for registration of the Company.
Form 1 – Contains details of promoters of the Company
Form 18 – About the place of registered office of the Company
Form 32 – About Directors of the Company
Q: Suppose 2 directors are non india citizens can they start the company?
Ans:- There is no objection for non Indian citizens to start a company in India and to act as Directors. But they have to appoint Alternate Directors representing them, to comply with the statutory requirement of convening quarterly Board Meetings and to take day to day decisions to run the company, signing other documents and forms for getting various registrations as applicable to the company. It is recommended to allot atleast 1 share each to 2 Indian citizens to comply with the statutory requirement of convening Annual General Meeting every year & EGM as and when required.
Q: Can we register the company without the directors coming to india?
Ans:-This is possible provided foreign citizens execute power of attorney in favor of Indian citizen attested by Notary/Magistrate in the Foreign Country. Then the authorized person can sign in the Memorandum & Articles of Association on behalf of foreign citizens.
More clarification on this point will be sent soon.
Q: Need more specific Breakup time frames like how long for name checkup, then the time for next process, also define total process involved like submitting forms to different departments etc?
Ans:- Entire incorporation process will take 15 to 20 days appox provided all the information has been provided immediately.
Subsequent to formation of the Company generally the following formalities have to be complied with:
a) Applying for PAN (Permanent Account Number) & TAN (Tax Deduction Account Number)
b) Opening of Bank Account
c) VAT & CST Registration, if applicable
d) Preparation of Common Seal & Share Certificates
e) Appointment of Auditors
f) PF Registration (applicable only if 20 or more employees are there)
g) Professional Tax Registration
h) Other Registrations & Licenses, such as Excise, Customs, STPI as applicable to the company
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I want register my company for online web services what will be charges.
Dear Sir,
Will ask concerned person to contact you…
Anand
If in case for a PVt ltd company , as per the law there should be two directors minimum , out of these two if one of them is a full time job holder would this be possible ?
Is it unethical for the company ?
Dear Sushant,
Is this a question or are you clarifying something??
Waiting for your reply.
Anand
dear sir,
would please let me know that how we can use india,international word in our company name and capital will be required for same what all other premium words are their
thank you
dear sourabh,
pls email Mr.Bala Murugan in this email id bala@cogzidel.in and he is an expert in that and he can help you out…
Anand
Anand,
Thanks for referring my name. Let me post my answer as a comment here so that it will be useful for your readers.
Regarding the Minimum Authorised Share Capital required to be maintained for certain words in the name of the company, here’s my article which explains the same:
http://www.cogzidel.in/blog/tag/minimum-authorised-share-capital/
I hope this will clarify the queries raised by Mr. Sourabh.
Regards
Bala
CFO, http://www.cogzidel.in
Regarding the query raised by Mr. Sushant, let me give my answer.
The question is:
“If in case for a PVT ltd company , as per the law there should be two directors minimum , out of these two if one of them is a full time job holder would this be possible ?
Is it unethical for the company ?”
My answer:
“No, it is not ethical to be on the employment while holding the directorship in a company.
It all depends on the terms being agreed by the concerned person with his employer and also with the company where he holds directorship.
If it prohibits him not to do any of these, then he cannot.
Otherwise, nothing stops him to go for employment as well as holding directorship”.
Regards
Bala
CFO, http://www.cogzidel.in
We are having a partnership firm and planning to convert it into a private limited company retaining the same name with pvt. ltd. added to it. What are the steps to be taken or it has to be treated as starting a new pvt. ltd. company.
Dear Mr. Sivadas,
Yes, conversion of partnership firm in to a private limited company is possible.
With regard to the name, you can retain the same name adding “Pvt Ltd” at the end, subject to the availability of the name. It means that if the name proposed by you has not been allotted to anyone else before, then you have the chance.
I can help you in converting your partnership firm in to private limited company.
I will mail you my contact details.
Regards
Bala
CFO, http://www.cogzidel.in
i’m the proprietor for raaga pharmaceuticals, this pharma company how can i do like raga pharmaceuticals pvt. ltd., pls give me reply
Dear Mr. Bharat,
Yes, you can convert “Raaga Pharmaceuticals” in to “Raaga Pharmaceuticals Pvt Ltd”.
I checked up the availability of this name and found that it is available for registration. You need to be an early bird to register the same before someone does it.
You can contact me at bala@cogzidel.com and I shall be glad to help you.
Regards
Bala
CFO, http://www.cogzidel.in
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Hello,
I just needed to know whether 2 citizen of Europe can form a pvt. ltd company in India?
Is it compulsory for those 2 European citizen to take Indian citizen as one of 3rd director?
Regards,
watson
Dear Watson,
Let me answer your query.
Yes, 2 citizens of Europe can form a private limited company in India.
They need NOT have any Indian citizen as 3rd director. There is NO mandatory requirement.
However, for practical purposes, it is advisable to have one local director. Because, Indian systems require the authorised signatory to sign many forms for every transaction to be dealt with, and it would be difficult, time-consuming and expensive when the directors are in abroad.
I hope I have clarified to my best. Pls catch me for further clarifications.
Regards
Bala
CFO, http://www.cogzidel.in
bala@cogzidel.com
Hello sir,
First of all Thanks a lot for your reply.
I just need to know one more thing. On what basis one can keep 3rd director(local director in india) as in terms or shareholding. In our case the work of that local director will be just to sign Cheques for Bills/salaries etc.. He wont bring any business at all the work will be passed from Europe ie. our side to Indian company that we will form. Can we find a dummy director? just for signing papers?. And what could be a rough amount a dummy director can demand.
Please it will be my pleasure if you help me out with the above queries.
Thanks & Regards,
Hello Watson,
Good to hear from you.
I earlier sent you a mail to your id, but it bounced back. No issues. You can communicate with me at bala@cogzidel.com.
Coming to your query, here’re my answers:
Q: On what basis one can keep 3rd director(local director in india) as in terms or shareholding.
A: The basis of directorship and shareholding is totally decided by the board of directors. A director need not hold shares by law.
Q: In our case the work of that local director will be just to sign Cheques for Bills/salaries etc.. He wont bring any business at all the work will be passed from Europe ie. our side to Indian company that we will form. Can we find a dummy director? just for signing papers?. And what could be a rough amount a dummy director can demand.
A: Yes, you can have some one as directors for taking care the functions that you have mentioned. Regarding the remuneration, there are no hard and fast rules. You can decide the pay whatever you want to. Normally, directors insists for remuneration mainly for the responsibility that they carry over.
Regards
Bala
CFO, http://www.cogzidel.in
bala@cogzidel.com
Hello,
Thanks for clearing many of my queries.
But i have more to ask you.
I need to know what according to you i should pay a director in india.
His duties wil be:
1) He will be just handling setup of hardly 10 peoples.
2) open office.
3) manage all cheque related matters. eg: salaries + bills.
Keep in consideration our company wil start with very basic. that mean not a huge company.
can you suggest me what to pay please. in RS.
I really appreciate your replies.
Thanks
Hi,
I am a Btech student. I want to start my own company in robotics and environment management. What is the initial capital for registering into these domains? And is it necessary to have a CA and a company secretary for the registration.?
Dear Watson,
Good to hear from you again.
For the activities that you have listed, the normal pay would be in the range of 25k to 30k per month.
You will have to be careful in appointing a person for this profile as he has to be highly trustworthy, professional and unbiased.
I should be able to help you on this and if interested, you can contact me at bala@cogzidel.com.
Regards
Bala
CFO, http://www.cogzidel.in
Dear Akash,
It’s good to note that you wanna be an entrepreneur. My heartiest wishes !!
For incorporating a private limited company, we will have to look out many factors like no. of directors to be appointed, their existing status of directorship, location of the registered office, the proposed name of the company etc. Only upon scrtinising, we can let you know the cost.
You can contact me at bala@cogzidel.com and I shall be glad to help you. We will take care of every thing and you need not worry about appointing CA or CS.
Regards
Bala
CFO, http://www.cogzidel.in
Good thread. Cheers!!
Thank you friend…
Enjoyed the posts..
We provide Company Formation Services for people from any part of the Country.
Feel free to contact us @ +91 – 93 81 91 81 93 / prakshcapital@gmail.com
hi,
Can any one let me know – any website to check the availability of names?
Hello Anand,
This is nice thread and gives answers to lot of my questions. We are about to set-up a limited company in India mainly doing software development projects. Is it mandatory to register for VAT as all our invoices will be for software exports to international clients. Do we have to charge VAT for all the export invoices.
Thanks for your time and help,
Regards
-Kalpesh
Dear Vinay,
Yes, you can check the availability of names at the following link:
http://www.mca.gov.in/DCAPortalWeb/dca/MyMCALogin.do?method=setDefaultProperty&mode=16
In case you find it difficult, pls contact me at bala@cogzidel.in.
Regards
Bala
CFO, http://www.cogzidel.in
Omnilink Systems India Pvt Ltd. is an IT Company. In US we have been established for the past 5 years. We started operations in India in month of January 2010 and got ourselves registered in February under Companies Act. We also registered ourselves under the Shops and Establishment Act. Currently we have 9 people associated in Bangalore – 2 consultants and rest are permanent to Omnilink. We gave designation to a person having more than 13+ years of IT experience as Director – IT and Operations. He would be the sole person who shall be running the show for Bangalore office.
Kindly let me know if this individual should be added as a member of Board of Directors or hold some shares of Omnilink or how is it? We need to justify his designation. Please help me on the same. Also, I believe an individual cannot be a director and employee at the same time.
Thanks
Lakshmi
cvlakshmi@omnilink.com
Dear Mr. Kalpesh Shah,
Good to know that you want to start a company. My heartiest wishes !!
VAT is applicable for all those organisations which trade in products. Basic exemption of turnover is 10 lacs. It means up to 10 lacs of turnover, you need not register yourself. Sale of products outside India is exempt from VAT.
In your case, you have mentioned as “Software Exports”. Assuming that you mean “Software Services to abroad” (and NOT a product sale abroad), VAT is NOT applicable to you, but “Service Tax” is applicable. Again, you have exemption up to 10 lacs of Turnover.
I will be able to help you on these. Pls contact me at bala@cogzidel.in.
Regards
Bala
CFO, http://www.cogzidel.in
Just the information i was looking for. thank you very much.
Hi, need help.
We are a proprietorship company and now planning to go for PVT LTD company. Heard about PF to be deducted in case of PVt ltd companies.
Can anyone please tell the provisiosn for PF.
Also please tell what if the employess are not ready to allow for PF deduction.
Tks
Mayur
Hello Mr. Mayur,
Congratulations for the decision to go for Pvt Ltd Company.
Regarding the PF, it is applicable for all employers who have more than 20 numbers of staff (for non-manufacturing). “Employer” means individual, HUF , Company etc.
Even if the number of staff are less than 20, still the employer can go for voluntary registration of PF.
If the employer is covered under PF, his employees cannot object for the same. Even if they object, it doesn’t stand in law. They are supposed to oblige to the PF rules. It’s their money and being saved every month (by their contribution) to help them after they quit the organisation. They should understand that it’s a retirement benefit.
Once you register under PF, may be, you can invite professionals like Cogzidel to offer a presentation to your employees about the PF and it’s benefits.
Pls contact me in case you need more details.
Regards
Bala
CFO, http://www.cogzidel.in
bala@cogzidel.in
Dear Sir,
Thanks for the information
Sir, you have mentioned that if no of employees be more than 20 in non manufacturing.
For manufacturing firms, is the limit for PF different. Ours is a manufacturing firm, making labelstock paper and printing
Pls inform on the same
tks n rgds
Mayur
please inform this name is available or not
thanks
R. GOPALAKRISHNAN
hi… Digital signature is required before ROC…So what should be filled in the form which asks “Name of the office”
hi mr bala ns how can serch my pvt ltd name pls rply soon
Dear Anshul,
Bala’s email id is bala@cogzidel.com
Anand
Thank u for give me info nd can u pls tell me how many mony expend in the compney registraion ….condistion 100000 rs capital show in compney registration…………thank u sir inadvanced
Hi,
In regard to company incorporation.
I would like to know for the case of OCI ( whos is holding overseas passport) does he still need attestation by Notary? And in the case of Indian citizen who doesn’t hold passport, how do you handle?Appreciate your reply
please send details to me so that i can start a company which will collect small deposits from people after set time we will give them back the amount with interest, in the mean time we will invest the amount in loans or in government securites
hi sir,
Can you tell me what can be gross expenditure in incorporating a pvt. ltd. company.
Also can you please suggest how much net amount is ok to be paid to the consultants for the incorporation.
Are there any running charges also ie. after the incorporation of company.
In case exact numbers are not available can u plz give approximate numbers to get some light on financials.
Hi , i am yogesh bagade from nashik maharashrta my education is diploma in industrial electronics how i can create a elecronics company and my cell nu. Is 8149624602 pls call me thanks for information by ur webside agains thanks
I want to know PF and ESI norms in case of manufacturing unit – a pvt. ltd. concern
After how many employees is it mandatory
how much to be deducted
what if the employees are not ready to contribute
what about the employees on contract basis (keep changing every 2-3-4 months and so)
what about those on daily wages
if any one can pls help me with this
rgds
mayur
Dear Mayur,
This is Bala – colleague of Anand Nataraj.
Let me answer your queries on PF and ESI.
——————-
Q: After how many employees is it mandatory
A: PF is applicable when the no. of employees crosses 10 in the case of Factories and 20 in the case of non-factories.
ESI is applicable when the no. of employees (whose monthly salary does not exceed Rs. 15,000) crosses 10 in the case of Factories and 20 in the case of non-factories.
——————-
Q: how much to be deducted
A: PF has to be calculated @ 12% on Basic Pay + Dearness Allowance towards the employees’ contribution. Equivalent sum of money has to be contributed by the employer also.
For ESI, 1.75% on the monthly Gross Pay towards employee contribution. Employer contributed @ 4.75% on the monthly Gross Pay.
——————-
Q: what if the employees are not ready to contribute
A: It is a mandatory requirement as legislated by the Government to protect these employees. Hence, employees do NOT have the options saying ‘No’. The employer has to recover the contributions of PF and ESI from the salaries of the staff (for whom it is applicable) irrespective of whether they agree or not.
——————-
Q: what about the employees on contract basis (keep changing every 2-3-4 months and so)
A: PF and ESI are applicable even for contract labours and even if they work for one day.
——————-
Q: what about those on daily wages
A: PF and ESI are applicable even for contract labours and even if they work for one day.
——————-
For more queries, you can contact me at bala@cogzidel.in
Regards
Bala
CFO, http://www.cogzidel.in
bala@cogzidel.in
dear sir,
we got registered our company in june 2010,we don’t have common seal??plz tell is there any specification of common seal??is there any number over common seal??from where we can get common seal??what is the procedure
Dear Deven,
Regarding the common seal, there are no specifications.
No numbers are mentioned on the common seal.
You can get it from the vendors who do rubber stamps.
You can google-search and find the vendors.
Call up them, give the name of your company and pincode. They will deliver it in a day’s time. It costs less than 1,500.
Regards
Bala
CFO, http://www.cogzidel.in
Hi sir,
Can i know some procedure to open a private limited company with the “international” word in our company name and the registration details of the company
Hello Nishant Doshi,
Regarding the usage of the words “international” in the name of the company, a prescribed Authorised Share Capital has to be maintained and applicable filing fee has to be paid to the Govt.
‘International’ – (to be used as the first name) – 1 Crore has to be the authorised share capital – Rs. 158,000 payable to Govt towards filing fee
‘International’ – (to be used within name) – 50 Lakhs has to be the authorised share capital – Rs. 108,000 payable to Govt towards filing fee
Pls let me know in which city you would like to set up your company, so that we can furnish you the details accordingly.
Regards
Bala
CFO, http://www.cogzidel.in
hello Sir,
its my dream to start a company since I was 11 yr old.
And i want to know that is it possible to start a company
which requires 14 crores.
But problem is that I have only 2 Lacks ……
Dear Sir plz suggest me..
Dear Bala/Anand,
During registration of a private limited company, I read that Directors and Share holders are required. Two directors are mandatory and they should have DIN. Shareholders are required to sign MoA.
What is the difference between these two in terms of powers vested and ownership? Is it mandatory to have two shareholders also ?
Can we have people named A and B as two directors, and people named B and C as shareholders of a private limited company ?
Thanks for this website and information. It helps a lot
Best Regards,
Pradeep
Dear Tarun,
Firstly, let me wish you for dreaming of becoming an entrepreneur.
Regarding the incorporation of your company, the first step is to prepare a business plan. It will detail out every single matter that you will have to consider for setting up a business.
With regard to the investments required, following are the few source of funding options for start-up entrepreneurs (with / without collateral):
a) Borrowing from friends, relatives and well-wishers
b) Borrowing under various Government schemes available for entrepreneurs
c) Venture Capital
d) Bank Overdraft
Cogzidel will be able to help you in the following:
- drafting your business plan
- providing guidance on the funding requirement
- incorporating your company with the available funds as initial Share Capital
Contact me at bala@cogzidel.in for more explanation.
Regards
Bala
CFO, http://www.cogzidel.in
Dear sir
My father running business of timber since last 25 year in india.
I joined business from just 2 months.
I learned that ther are some tax benefits in pvt ltd company,ther for I am thinking to convert partnership firm into company.
But i have not any idea to converting it or to establise a new one.
so pls help me out from this difficulties,,,…….
Other countries only took one day to process the approval of a company name. I guess, the process varies on every country.
Sir,can u send me the list of which documents required for company registration
Regards,
Abhishek das
Dear Sir,
Can we convert the Company registered under CST Act into the Private Company under Companies Act?
Dear Sir,
We want to start a firm/company. We two of us are freelancers and want to create a company immediately. Currently we are operating from home. We want to do the registration in this premise itself. It is a rented place. Kindly let me know, whether we can register a pvt ltd company in house address. Is there any issue? Later on, if we change it to a office space, what will the procedure and cost involved?
Thank you in Advance,
Shankar.
require pvt or ltd company with profit making