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Incorporation of a Company - CA 2013

Incorporation of a Company - CA 2013. Shawn Jeff Christopher FCA,DISA JVR & Associates, Chartered Accountants. Frame work. Applicable Sections : Sec 3 to 22 Specific Rules : The Companies (Incorporation) Rules,2014 Related Schedule : Schedule I

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Incorporation of a Company - CA 2013

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  1. Incorporation of a Company - CA 2013 Shawn Jeff Christopher FCA,DISA JVR & Associates, Chartered Accountants

  2. Frame work • Applicable Sections : Sec 3 to 22 • Specific Rules: The Companies (Incorporation) Rules,2014 • Related Schedule : Schedule I • E-Forms –INC 1,2, 7,21 &22 & DIR 3 & 12 • Forms to be scanned and attached: INC 3,8,9,10, & DIR 2 & 4 Bigger ** Better ** Bolder

  3. Key Highlights • Private Company, Public Company and...................... One Person Company . • ‘Resident Directorship’ is made mandatory . • DIN application to be digitally signed by the applicant. Bigger ** Better ** Bolder

  4. Key Highlights • Certification by Professional in the name application form is now dispensed with. • Proof of identity, Proof of Address & PAN of the promoter & first directors to be mandatorily attached with the incorporation forms. • Consent of the nominee of a One Person Company (OPC) needs to be submitted on its incorporation Bigger ** Better ** Bolder

  5. Key Highlights • Filing of the consent by the First Directors is made mandatory(Form DIR 2). • Declaration for commencement of business is to be mandatorily filed by all companies.(Sec 11) Bigger ** Better ** Bolder

  6. Director Identification Number (DIN) (Rule 9 of the Companies (Appointment and Qualification of Directors) Rules, 2014 & Sec 153 & 154 of the Companies Act 2013 ) Application for DIN to be made in Form DIR 3 with the following particulars: • Photograph, • Proof of Identity, • Proof of Residence, • Verification in Form DIR 4, Digital Signature of applicant is a must. Bigger ** Better ** Bolder

  7. Director Identification Number (DIN) • Attestation of Address & Id proof of Resident Indian National (a) Verification /certification by a professional : The applicant can self attest the documents. (b) Verification /certification by a director of a company/CS in employment: Attestation by Notary is required. Bigger ** Better ** Bolder

  8. Director Identification Number (DIN) • Attestation of Address & Id proof of Foreign National Visited India under business Visa (a) Verification /certification by a professional : The applicant can self attest the documents. (b) Verification /certification by a director of a company: Attestation by Notary is required. Bigger ** Better ** Bolder

  9. Director Identification Number (DIN) • Attestation of Address & Id proof of Foreign National In case, the director is residing outside India, (As per DIN instruction, Attestation, page 7) Supporting documents can also be attested by Company secretary in full time employment /CEO / Managing director of the Indian company in which he / she proposed to be a director. Bigger ** Better ** Bolder

  10. Application for Reservation of Name Rule 8 & 9 of the Companies (Incorporation) Rules 2014 & Section 4(4) of the Companies Act 2013 - Form INC 1(Form 1A) • Additional Declaration on (a) Whether the promoters are carrying on any partnership firm, sole proprietory or unregistered entity in the name applied for if so an NOC to be attached. (b) Proposed name(s) contain(s) name of any person other than promoter(s) or their close blood relatives-NOC to be attached. (c) Proposed name(s) include(s) the name of relatives-Proof of relationship to be attached Bigger ** Better ** Bolder

  11. Application for Reservation of Name Rule 8 & 9 of the Companies (Incorporation) Rules 2014 & Section 4(4) of the Companies Act 2013 - Form INC 1 (Form 1A) • Additional Declaration on (d)Proposed name is indicative of the object of the proposed company Bigger ** Better ** Bolder

  12. Application for Reservation of Name Rule 8 & 9 of the Companies (Incorporation) Rules 2014 & Section 4(4) of the Companies Act 2013 - Form INC 1(Form 1A) • Fee : Rs 1,000/- • Digital Signature : INC1 to be digitally signed by the applicant or the Key managerial person of the applicant company. Bigger ** Better ** Bolder

  13. Application for Reservation of Name Rule 8 & 9 of the Companies (Incorporation) Rules 2014 & Section 4(4) of the Companies Act 2013 - Form INC 1(Form 1A) • Fee : Rs 1,000/- • Digital Signature : INC1 to be digitally signed by the applicant or the Key managerial person of the applicant company. Bigger ** Better ** Bolder

  14. Memorandum of Association • Section 4(6) provides that a company shall adopt the format specified in Table A. • Memorandum of Association for different class of companies specified in Table A to E of Schedule I • Other objects is dropped from Memorandum. In Liability Clause :  • The liability of members is limited and this liability is limited to the amount unpaid, if any, on the shares held by them Bigger ** Better ** Bolder

  15. Articles of Association • Section 5 (7) provides that a company may adopt all or any of the regulations contained in the model articles applicable to such company. • Articles of Association for a company limited by shares specified in Table F of Schedule I Bigger ** Better ** Bolder

  16. Attestation by Professional (Rule 13(1) of Incorporatiion Rules,2014) • I witness to....(number) subscribers who have subscribed and signed in my presence.......(place and date). • Further, I have verified their identity details (ID) for their identification and satisfied myself of their identification details as filled in. Bigger ** Better ** Bolder

  17. Incorporation Documents • PAN is Mandatory for Indian Nationals and any one of the following as Proof of Identity : • Voter’s Identity Card • Passport Copy • Driving License Copy • Unique Identification Number(UIN) Bigger ** Better ** Bolder

  18. Incorporation Documents Proof of Residence, any one of the following documents • copy of the bank statement, • electricity bill, • telephone/mobile bill For Foreign Nationals & Non Resident Indians: Passport is mandatory in addition to the above. • Proof of nationality for a Foreign National ?? Bigger ** Better ** Bolder

  19. Incorporation Documents One Person Company (Form INC 2, INC 3, INC 22 & DIR 12) • Forms to be filed & its attachments • Form INC 2 • Applicable Sections of the Companies Act 2013 : 3(1) & 7(1) • Companies(Incorporation) Rules 2014 : Rule 4,10,12 & 15 Bigger ** Better ** Bolder

  20. Attachments • Memorandum of Association, • Articles of Association, • Proof of Identity of member & nominee, • Residential Proof of member & nominee, • Copy of PAN of member & nominee, • Consent of Nominee in Form INC 3, • Affidavit in INC 9, • Specimen Signature INC 10, • Declaration of Professional in INC 8. Bigger ** Better ** Bolder

  21. Other than OPC & Sec 8 Companies(Form INC 7,INC 22 & DIR 12)(Old forms Form 1,18 &32) Form INC 7 (Form 1) • Applicable Sections of the Companies Act 2013 : 7(1) • Companies(Incorporation) Rules 2014 : Rule 10,12,14 & 15 Bigger ** Better ** Bolder

  22. Attachments • Memorandum of Association • Articles of Association • Proof of Identity of Subscribers & first directors • Residential Proof of Subscribers & first directors • Copy of PAN of Subscribers & first directors • Affidavit in INC 9 • Specimen Signature INC 10 • Declaration of Professional in INC 8 • PAN Bigger ** Better ** Bolder

  23. Form DIR 12( Form 32) • Applicable Sections of the Companies Act 2013 : 12(2) & 4 • Companies(Incorporation) Rules 2014 : Rule 25 & 27 Attachments •  Letter of appointment of the first director • Consent to Act as director in Form DIR 2 • Affidavit in INC 9 • Proof of ID and Address Bigger ** Better ** Bolder

  24. Form INC 22 ( if the Registered Office address given on incorporation) Applicable Sections of the Companies Act 2013 : 12(2) & 4 Companies(Incorporation) Rules 2014 : Rule 25 & 27 Attachments • Registered Title deed or , • Notarised copy of lease/rent agreement with copy of rent paid receipt not older than 1 month, • NOC from the owner of property if not taken on lease. • Telephone,Gas or Electricity bill. Bigger ** Better ** Bolder

  25. Registered Office Address of the Company • New Companies : Within 30 days of incorporation intimate the RO address • Existing Companies : Within 15 days of change intimate the new RO address (Rule 25 & Rule 27 of the Companies (Incorporation) Rules,2014 and Section 12(2) & (4) of the Companies Act 2013)) Bigger ** Better ** Bolder

  26. Certificate of Incorporation • Rule 8 of the Companies (Incorporation) Rules,2014 and Section 7(2) of the Companies Act 2013. Once the incorporation documents are accepted by the Registrar of Companies, the Certificate of Incorporation has to be issued in Form INC- 11. Bigger ** Better ** Bolder

  27. Declaration on Commencement of Business • Rule 24 of the Companies (Incorporation) Rules,2014 and Section 11(1) of the Companies Act 2013. • Every company having a share capital shall not commence the business or exercise the borrowing powers unless- • A declaration that every subscriber has paid for the value of shares agreed to be subscribed by them on incorporation. • The company has filed with ROC the details of its registered office address. Bigger ** Better ** Bolder

  28. Declaration on Commencement of Business • Declaration to be filed in Form INC 21 Attachments: • Specimen Signature in Form INC 10, • Copy of the Certificate of Registration issued by RBI/ other regulators. Bigger ** Better ** Bolder

  29. Check Points • Name of Relative/related concern/other person used in INC 1 • Residential Status of Resident Director INC 7 • Verification of original/certified records DIR3 & INC 7 • Objects of the company INC 1 & INC 7 Bigger ** Better ** Bolder

  30. FAQ’s 1. When a DIN once rejected, what should be done next ? Fresh application to be submitted. Only when resubmission asked for, then the form can be resubmitted. 2.Can a OPC be formed by a Corporate /LLP ? No 3. Can a Foreign National be considered as a Resident Director ? It should be based on the period of stay during the previous calendar year. Bigger ** Better ** Bolder

  31. FAQ’s 4. Time period by which approval of DIN will be known Minimum 1 working day 5. Transmission of shares in case of OPC Nominee will be entitled for shares of the One Person. 6. Time period within which a new company should have Registered Office ? 15 days Bigger ** Better ** Bolder

  32. 7. Can a company commence its business before filing the declaration u/s 11 ? No 8. Whether the company master data details will be displayed if Form INC 22 is not filed ? No 9. Whether FEMA certification is required if a Foreign national/ NRI involved in formation of a company ? No 10. Whether the photograph to of subscribers to be attached along with MOA & AOA ? No Bigger ** Better ** Bolder

  33. Common Reasons for Resubmission • Memorandum & Articles prepared in old format. • Common documents not attached along with DIR12. • Non eform attachments prepared not as per Rules. • Attestation by professional not as per Rules. • Scanned documents not legible. Bigger ** Better ** Bolder

  34. Shawn Jeff Christopher FCA,DISA • JVR & Associates, • Chartered Accountants Bigger ** Better ** Bolder

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  37. Resident Director Sec 149(3) Every company shall have atleast one resident director who has stayed in India for a total period of not less than 182 days in the previous calendar year. Sec 149(5) Every existing company to comply with the requirements of sec 149(3) within a period of 1 year from the commencement of Act/from the date of notification of rules. Bigger ** Better ** Bolder

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  41. Highlights of Rule 3 to Rule 7 of the Companies (Incorporation) Rules, 2014 • Only a natural person who is an Indian citizen and resident in India shall be eligible to incorporate a One Person Company • No person shall be eligible to incorporate more than a One Person Company • No minor shall become member of the One Person Company or can hold share with beneficial interest • Nominee details to be furnished on incorporation. • Such Company cannot carry out Non-Banking Financial Investment activities including investment in securities of any body corporates Bigger ** Better ** Bolder

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