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Author : Nalini Nagaraja

Company: Introduction

The term ‘Company’ is defined as a legal entity formed by one or more individuals aimed at generating profits through commercial (or business) activities. According to section 2(20) of the Companies Act, 2013, a company is an association of one or more persons registered under the companies act.

Types of Business Entities

Business entities may be of many kinds. In India, the most preferred and significant business entities for doing secured and comparatively profitable businesses are:

• Branch Office
• Joint Venture Company
• Liaison Office / Representative Office
• Limited Liability Partnership (LLP)
• Partnership
• Private Limited Company
• Project Office
• Public Limited Company
• Sole Proprietorship
• Subsidiary Company
• Unlimited Company

Amongst these, a Joint Venture (Company) is not a separate legal entity but a Private Limited Company, a Public Limited Company, or an Unlimited Company. Likewise, a wholly-owned Subsidiary Company of a foreign company in India can be a Branch Office, Private Limited Company, Public Limited Company or Unlimited Company.

Registration of Company in India

An aspired person, looking forward to growth, may consider registering a company. It does seem a significant step; perhaps it is a better way to try hands in the business under a company structure. There are many benefits of registering a company, such as:

• Avoiding conflict with founders
• Legitimacy and brand awareness
• Limiting personal liability
• Minimizing tax liability
• Raising significant capital

Steps to register a Company

• It needs a name for the company which can be a set of a maximum of six names. It should not resemble the name of an already registered company and should also not violate the provisions of Prevention of Improper Use Act, 1950. There is a service offered on the portal to check for the name’s availability.
• An application by e-Form 1A needs to be made to the respective Registrar of Companies (ROC), by using the portal, to ascertain availability of the name. A digital signature of the applicant would be required along with the prescribed fees. In case the name of the company is not available, the applicant can apply with a new name on the same application.
• Once the name is approved, the applicant may apply to register the company by filing the required forms (Form 1, 18 and 32) within the next 60 days of the approval.
• The next step is to have the company’s memorandum and articles of association drafted by a solicitor. The applicant has to get it vetted by the ROC, printed and stamping done of it while paying for the appropriate stamp duty.
• The memorandum and articles need to be signed by at least two subscribers with his details along with the number of shares subscribed. This needs to be witnessed by at least one person. This should be dated a day later to the date of stamping.
• The applicant needs to log in to the portal, fill the e-forms and attach the mandatory documents mentioned beneath here:
  • Declaration of compliance: Form-1
  • Notice of situation of the registered office of the company: Form-18
  • Particulars of the Director's, Manager or Secretary: Form-32
• The e-form needs to be signed with the digital signature and paying the filing and registration fee. Once done, a physical copy of the memorandum and article of association should be sent to the ROC.
• The applicant can obtain the Certificate of Incorporation from the ROC once the Corporate Identity is generated after processing of the form.

Registration of Limited Liability Partnership Company in India

Entrepreneurs prefer to register the Limited Liability Partnership (LLP) Company due to it’s offering benefits of both the worlds, company and partnership firm, in a single organization. Some of the benefits are:

• A separate legal entity just like companies
• Cost of forming an LLP is low
• Fewer hazards of compliance & regulations
• liabilities of each partner is limited 
• No requirement of minimum capital contribution

It needs as few as two partners to incorporate an LLP with no upper limit on the number of partners, of which one partner should be a resident of India. Their rights and duties are governed by the LLP agreement, and they are directly responsible for all the compliance and provisions of the LLP Act, 2008. 

Process / Steps to register an LLP

• Since the application filing is done online, the first step is to obtain digital signatures for the designated partners of the proposed LLP. The Digital Signature Certificates (DSC) should be obtained from any government recognized certifying agencies.
• The next step is to apply for the Director Identification Number (DIN) of all the designated partners. The application for allotment of DIN is made by the Form DIR-3 with a scanned copy of Aadhaar and PAN card attached to the form. This form must be endorsed by the company’s full-time Company Secretary or by the Managing Director/ Director/ CEO/ CFO.
• The applicant must file an application for the Name Approval i.e. LLP-RUN (Limited Liability Partnership - Reserve Unique Name) for the reservation of name of proposed LLP. This form is processed by the Central Registration Centre (CRC) under Non- Software Technology Park (STP). It is highly advised to use the free name search facility on the Ministry Of Corporate Affairs (MCA) portal.
• The form must be filed with all the fees duly paid up, which in turn is examined and approved or rejected the registrar. There is a re-submission opportunity allowed within 15 days to rectify the errors. 
• Further, the Form for incorporation of Limited Liability Partnership (FiLLiP Form) must be applied with the respective registrar with fees paid in accordance with the Annexure ‘A’. This form also facilitates to apply for allotment of Designated Partner Identification Number (DPIN/ DIN), allowed only for two individuals.
• The applied forms get approved if the name, which is applied for the LLP, is available. 
• Next step is to file for the LLP agreement, which governs the mutual rights and duties among the partners of the LLP, and between the partners and the LLP. It must be filed using Form 3 available on the MCA portal. This form must be submitted within the next 30 days from the date of incorporation. This agreement should be printed on a stamp paper with appropriate stamp duty paid as per the state rules.

Conclusion

While there are several ways and means to run a business, registering company can be the best way to expand the business and to ensure success. The most straightforward way is first to evaluate the benefits that you seek and then register the business structure accordingly. The steps may vary to register different types of companies but it usually takes less than 15 days to have a company registered. Once registered, you can run your business with desired benefits at hand to succeed in the market.