PREPARING FOR INCORPORATION OF A COMPANY

A dream company comes into existence with a good planning and efforts. If character of a human start building with thinking of its parents; character of a company start building with thinking of its promoter.

I have nothing to say about all business decision like business objects, size of investment, geography of operations and members of its core management team. I will discuss some points with corporate law angle. However the object must be defined and lawful. It is good if, this is reduced in writing with help of an industry expert with a vetting by a Company Secretary.

I have already discuss in my earlier post, promoters must decide applicant for reservation of name for the company. This person must obtain a digital signature.

If company will be a non –profit this will be a Section 8 company. It may also be a Part – I (Chapter XXI) company or a producer company. Most of the companies shall be other companies. [Type of the company]

A company may be a public company or private company. It may also be one person company which is a private company. [Class on the basis of membership structure]

Any of these companies may be an unlimited company or a Limited company. In case of a limited company it may be a limited by guarantee or limited by shares. [Category on the basis of Liability of Members]

Further, a company may be union government company, state government company, non – government company or a subsidiary of a foreign company. [Sub – category on ownership and control]

Thereafter, promoters should decide place for registered office of the company. This is not a place of business of a company but a place where management of the company legally situates. Practically, promoter decides a city or village where registered office of a company shall situate. A professional (a company secretary) may take care of rest. Same time, Promoters must try to locate an office space and complete all legal formalities related to consent of owner of the property.

Detail of all promoters shall also be required Permanent Account Number, Director Identification Number, Passport Number, Corporate Identification Number, or Foreign Company Registration Number. All subscribers to the memorandum need not be promoters.

Promoter may choose some names which may be available for them. All proposed names should have been checked for possibility of availability and minimum capital requirement.

For companies with certain objects, there may be a requirement for approval form a sector regulator.

In case of a one person company, promoter must be certain about name of his nominee and obtain his informal consent beforehand.

Please note: I welcome your comments and feedback. This blog post is not a professional advice. Readers may share this post on social media by using buttons given here.