Incorporating a company in India

The Companies Act, 1956 enlists the procedure for incorporation of both private and public companies in India.

  • A private company is one which does not allow members of the public to subscribe to the shares and debentures of the company. A public company is one which allows its shares to be traded among the public and listed in stock exchanges.
  • A private company requires a minimum of two directors and two shareholders, where as in the case of a public company a minimum of three directors and seven shareholders are required.
  • The minimum authorised share capital for a private company is ₹1 Lakh whereas for a public company it is ₹5 Lakh.
  • A public company which commences operations with a paid up capital of less than ₹5Lakh shall increase the paid up capital to ₹5 Lakh within 2 years of commencement of operations and in case it fails to do so, it will be considered to be defunct.
  • The Companies Act, 2013 has also defined a ‘One-Person company’ which has only one shareholder and it is considered as a private company and a separate entity from the single shareholder.
  • Every public company with a paid up capital of ₹100 crore or more or a turnover of ₹300 crore or more shall have at least one woman director.

The following key steps need to be followed for incorporating a company:

  1. Obtaining the Director Identification Number (DIN): An Application should be filed for obtaining at the Ministry of Corporate Affairs (MCA). It is mandatory for every director to obtain a DIN. The details for applying can be obtained from the MCA website on this link – Proof of identity, proof of residence and photographs can be uploaded on to this site, digitally signed and the requisite fees can be paid online. A digital certificate can be obtained from any of the government- approved agencies like TCS, E-Mudhra, and (n)Code Solutions. After obtaining the DIN, the Registrar of Corporates should be informed about the company and the DINs of all the directors.


  1. Register the company name: The next step is to file Form INC-1 for the availability of name of the company along with the requisite fees. Promoters can search for the availability of the company name on the MCA website at –  and provide 6 names in priority. The activity type of the company can also be checked through the same. Once the company name is approved, name of the company is valid for a period of 60 days from the date of filing. In case the proposed company is not incorporated within this period, it shall lapse and be available to other applicants. There is no provision of renewal of the lapsed name.
  1. Memorandum of Association (MoA) and Articles of Association (AoA): The MoA contains all the key clauses pertaining to name, address, objects, liability, capital and subscription. The AoA defines the rules and regulations made by the company for its administration and management.
    Subsequently, all the necessary e-forms (INC 7 and INC 22) should be filed before the Registrar of Companies (RoC) along with the requisite enclosures. The necessary fees and stamp duty along with taxes should be paid to the RoC. The RoC will then verify all the documents submitted before it and issue of the Certificate of Incorporation.


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