Requirements for Company Registration

The process for registering a company has been made very simple and affordable over the last few years. With the introduction of digital signature and INC-29 incorporation, a company registration can now be completed from the comfort of home within 10 days. However, unlike purchasing a product, company registration requires the promoters to meet certain criteria and submit certain documents for incorporation of a company. In this article, we look a such requirements for company incorporation in India.

Shareholders

A private limited company must have a minimum of two shareholders at all times. A private limited company can have a maximum of 200 shareholders; on the other hand, a public limited company can have unlimited shareholders. The shareholder of a company can be an individual or a body corporate. The shares of an Indian company can be owned by Indian Citizens or Indian Body Corporates or Foreign Nationals and Foreign Body Corporates. Shares of an Indian Company can be owned by foreigners subject to the FDI norms. There is no requirement for a shareholder of an Indian Company to have an office or address for correspondence in India.

Directors

A Director is a person who administers, controls and directs the operations of the company. The Directors of a company are elected or appointed by the shareholders of the Company. A private limited company must have a minimum of two directors at all times. The maximum number of Directors permissible in a company is fifteen, which can be increased further by passing a special resolution. Directors of a company can only be individuals (living persons), who are above the age of 18 years. Hence, a body corporate cannot be appointed as a Director of a Company. The Director of an Indian Company can be an Indian Citizen or Foreign Citizen. However, all companies in India must have atleast one Director who has stayed in India for a total period of not less than one hundred and eighty-two days in the previous calendar year. Also, there is no requirement for a foreign Director to have an address in India for incorporation of a company.

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Registered Office Premises

All companies registered in India must have a principal place of business, called its registered office. The jurisdiction of court, tax office and other regulatory matters will be determined based on the State and address of the registered office of the company. In addition, the registered office will service as a place where all the official records of the company are kept and is the place where any member of the public can contact the company or serve legal notices. The registered office of the company must be maintained throughout the life of the company. In case of any change to the registered office premises, the Ministry of Corporate Affairs must be informed by filing the appropriate filing. While incorporating a new company, the state of incorporation must first be determined by the promoters to apply for name. Once name is obtained, a company can file for incorporation and be registered without providing a registered office premises address. However, in the filing, an address for correspondence must be provided and the should have a registered office within 15 days of incorporation. On setting up the registered office, the ROC must be intimated about the registered office post incorporation within 30 days.