ime to Complete: 2 to 4 days
As incorporation is now done online, 1 of your company’s directors’ signatures will be needed on all the electronic documents. To make this possible, he/she would need a Class-II Digital Signature Certificate (DSC). This is available from a vendor of any one of the 6 Certifying Authorities appointed by the Ministry of Corporate Affairs (MCA), including Tata Consultancy Services, nCode and e-Mudhra. The rates of their vendors could differ vastly. Charges would include the cost of the physical USB token and the certificate itself.
The entire process would take 2 to 4 days, largely because hard copies of the form and documents need to be couriered to the vendor (online legal services companies, including MyOnlineCA, would, however, need only self-attested soft copies to begin the process).
What you need to submit
1. Hard copy of completed Class-II form
2. Identity Proof: Self-attested copy of PAN card or, in case of foreign national, copy of Passport
3. Address Proof: Self-attested copy of (any one) Passport/Election/Voter ID/Ration Card/Driver’s License/Utilities Bill/AADHAR Card. If the Utilities Bill (Electricity/Telephone) is submitted, it should be in the name of the Applicant and no older than 2 months from the filing of the form (12 months, in case of foreign national).
Common Reasons for Rejection of DSC
The following minor mistakes can cause a delay in your application:
a. Abbreviating names: Do not abbreviate directors’ names, regardless of what is mentioned in the ID/Address proof.
b. Spelling mistakes: Errors in the name are completely unacceptable.
c. Old bills: Always provide the latest utilities bill. Also, it needs to be in the applicant’s name.
d. Prefixes: Do not prefix Mr./Mrs/Shri., etc.
Time to complete: 1 to 2 days (simultaneous with DSC application)
You don’t need to wait for the DIN to begin this process. In fact, given how tricky it can be, it’s best that you start it as soon as you apply for DSC. The reasons are that the INC-29 only allows you to propose 1 company name and the MCA is very picky about the ones it approves. So the name you’ve hoped to get for your company:
If you are disappointed that a preferred name is taken, do remember that the company name doesn’t have to be your brand name. You may be aware that several well-known companies have brand names different from their company names (Jasper Technologies Pvt Ltd, for example, is better known as Jabong!). So don’t stress out about it.
You also need to submit the Main Objects of your business and the Significance of each proposed name. Your application should have one line on each.
Time: 2 days
Once the name is approved, the MCA requires further definition of the proposed company. These will be provided through the Memorandum of Association (MoA) and Articles of Association (AoA), which can be drafted by a CS or lawyer. Both need to be self-attested.
In the MoA, remember to paste the exact Main Objects, too.
4. Incorporation Certificate
This certificate is a proof that your company has been incorporated.
Special points for Entrepreneurs
We have analyzed various start ups , their idea’s and their knowledge about the legal, so we would like to share some of the important points that would be helpful for you in building your own startup.
- Always choose company as your form of business, as it will be provide you a strong legal base and also you will be open to funding and choosing private limited company certainly adds value to the business.
- While incorporating company, always have shareholding agreements with the existing shareholders/promoters. This will help you setting out terms more clearly and it will protect you against any malicious intentions and wrong doing of others.
- Now a days, it is a trend to have pool of shares in the beginning and then to be issue at a later stage of business and the pool may be managed either singly or jointly by promoter(s). However, initially, in India it is prohibited to have pool of shares (however it may done after incorporation) and Indian laws also do not permit the company to issue ESOPs (shares from pool after a vesting period) shares to promoter(s).
- Usually startups, mostly relates to online or E-commerce business. and they almost every time wants their company name to be same as their domain name. But remember, it is not mandatory to have company name same as your domain name. You may have your brand name and company name different, like FlipKart.com etc.