Indian documentation, part II

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In a previous blog post I wrote about incorporation and the different activities related to ROC (Registrar of Companies) and preparing Memorandum of Association (MOA) and Articles of Association (AOA) for the proposed company. MOA and AOA should be filled in the applicant’s handwriting, and the applicant must be one of the directors or registered company secretary. The applicant must, in the presence of a witness, mention their full name, their father’s name, occupation, residential address, number of shares subscribed for, etc.

If you’re a foreigner, your approved document for proof of identity and residency is your passport. For a few countries, prior authorization of the photocopy of passport by the Consulate or Embassy is mandatory. For Indians, there are many options of identity and address-related documents for submission. Three passport size photographs of all the directors or shareholders are required. Get MOA and AOA stamped by paying a stamp duty, which depends on the certified share capital of the proposed company. The price of stamp duty differs from state to state in India. The authorised and paid-up capital should be mentioned in the AOA.

It is mandatory to obtain Director’s Identification Number (DIN) by filling Form DIN-1 and getting digital signatures for two directors (this is required for filing documents with ROC). A temporary DIN is instantly issued, which must then be printed, signed and sent to the Ministry of Corporate Affairs for its consent along with the identity and address proof. Digital signature is mandatory for completion of company registration system under MCA 21.

You’ll need what’s called Form No. 1 printed on “non-legal stamp paper” (that costs less than a dollar) and signed by one of the company directors or attorneys or advocates, etc., mentioning that all the obligations of the Companies Act have been observed. Form No. 18 should be authorised and signed by one of the company directors, notifying the registered company address to ROC. Form No. 29 is not required if you are registering a private limited company. All directors should submit filled-in Form No.29 to operate as directors in the public limited company, though. Form No. 32 contains the details of the proposed board of directors from the date of company incorporation and should be signed by one of the acting directors.

In a few states (Karnataka, Maharashtra, Andhra Pradesh, New Delhi and others), the above forms are available online in the Ministry of Company Affairs website, namely e-form 1, e-form 18 and e-form 32. Along with above documents, submit the original “Company name allotment certificate” and power of attorney (or board resolution) signed by all the MOA subscribers certifying one of the subscribers to operate on their behalf for the purpose of registration and to acknowledge the certificate of incorporation. There are other supplementary steps for registering and starting operations of a public limited company in India. It is best to have a company secretary or legal advisor to coordinate ROC activities and draft guidelines to avoid problems in the future. Private companies can immediately begin operations after incorporation. A certificate of incorporation given by the Registrar in respect of any company shall be conclusive evidence that all the requirements of this Act have been compiled, and that the company is duly registered under the Companies Act.

To start company operations, you need a company seal (or common seal) to deliver share certificates and to issue letters. Open a current account of company in any of the nationalised banks. Banks require copies of the company name allotment certificate, name incorporation certificate, proof of registered office address, passport size photographs of directors (who will operate the account) and an initial deposit in Indian currency. If directors are Indian residents, then their residential address proof, permanent account number (PAN) card and photographs are required. Once the bank account is operational, apply for Company PAN and tax account number (TAN) from a certified franchise or agent of income tax department, namely National Securities Depository Limited (NSDL) and Unit Trust of India (UTI) Investors Services Limited.

Submit your company registration certificate along with the identity and residence proof to get PAN application Form No. 49A and TAN Application Form No. 49B from IT PAN Service Centers or TIN Facilitation Centers. PAN is important to credit tax under Income Tax Act, 1961 and TAN for submitting tax deducted or gathered at source (TDS). Enrol with the Office of Inspector, Shops & Establishment Act (State or Corporations or Municipal) certificate for the registered company address. The office board must have company name and address in two languages, namely the state’s official language (compulsory) and in English (optional). Under this procedure, a proclamation consisted of names of company, employer, manager and company address must be delivered to the local shop inspector with the pertinent fees.

Depending on the type of business and services, each company has to apply and obtain Value-Added Tax (VAT) and Commercial Sales Tax (CST) codes at the Commercial Tax Office (in the respective states). Fill out VAT Form No.101 and submit attested copy of MOA and AOA, residence proof, company address proof, one passport-sized photograph of applicant, PAN card and payment of fees in Form No. 210. Register for professional tax (PT) within 3 months of the company’s operation. If your company’s business involves manufacturing of goods and the disposal of clinical or toxic wastes, then obtain clearance from the Environment and Pollution Board.

The company registration process looks lengthy, but you can complete it within two to three weeks. Good luck and enjoy business in India. Write to me if you have specific questions or need any other help in setting up company in India. You can reach me here:

Prashanth Bagali