Company Incorporation

In order to start a business one can do a company incorporation in India. “Company” means a company incorporated under this Act or under any previous company law as per the section 2(20) of the Companies Act, 2013.

Company is further divided in following categories:

Company Incorporation

Company is further divided into:

“Company Limited By Guarantee” means a company having the liability of its members limited by the memorandum to such amount as the members may respectively undertake to contribute to the assets of the company in the event of its being wound up, as defined under section 2(21) of the companies Act, 2013.

“OR Company Limited By Shares” means a company having the liability of its members limited by the memorandum to the amount, if any, unpaid on the shares respectively held by the, as defined under section 2(22) of the Companies Act , 2013.

Brief about Private , Public and OPC :

“Private Company” as per the section 2(68) of the Companies Act, 2013 means a company having following restriction in its articles:—

(i) restricts the right to transfer its shares;
(ii) Except in case of One Person Company, limits the number of its members to two hundred:

Provided that where two or more persons hold one or more shares in a company jointly, they shall, for the purposes of this clause, be treated as a single member:

Provided further that—

(A) persons who are in the employment of the company; and

(B) persons who, having been formerly in the employment of the company, were members of the company while in that employment and have continued to be members after the employment ceased, shall not be included in the number of members; and

(iii) prohibits any invitation to the public to subscribe for any securities of the company;

OR “public company” as per section 2(71) of the Companies Act, 2013 means a company which—

(a) Is not a private company:

Provided that a company which is a subsidiary of a company, not being a private company, shall be deemed to be public company for the purposes of this Act even where such subsidiary company continues to be a private company in its articles ;

OR “One Person Company” as per section 2(62) of the Companies Act, 2013 means a company which has only one person as a member and director.

Private Limited Company

What is Private Limited Company?

Private Limited company is define under section 2(68) of the Companies Act , 2013 as the company incorporated under the provision of section 3(1) of the Company Act, 2013, a private limited company means a company formed for any lawful object by two or more persons, by subscribing their names to a memorandum of association of the company and with minimum, of 2 director and maximum, of 15 directors.

In other words Private Limited Company is a type of business wherein the ownership and management are separate. The capital of a company is provided by a group of individuals known as shareholders who entrust the responsibility of managing the company in the hands of individuals known as the Board of Directors.

Advantage of the Private Limited Company Incorporation in India:

1. Private Limited Company has a separate legal identity, separate from its owners
2. Private limited company can be form with only 2 directors and 2 members, with minimum capital requirement.
3. It have key advantages like the ability to contract in its own name, and safeguard personal assets of the owners from business liabilities and Tax advantage.

Private Limited Company incorporation is a popular option to start a business in India , now a days, due to introduction of the Spice + & Agile Pro Forms by the ministry of the corporate affairs, make doing business in India now a days much easier.

Checklist for private limited company incorporation in India:

1. Name Reservation
2. DSC
3. DIN
4. Company formation

Requirements for the private limited company incorporation in India :

– ID proof and Address Proof of the Promoters and directors.
– Authorized Capital and the proportion of contribution
– Objects of the Company
– Utility bill for registered office of the Company
– Proof of ownership along with NOC of the owner
– Declaration by the First Subscriber and the Directors of the Company
– In the case of Foreign Subscribers, MOA and AOA in hard copies
– DSC directors/ Promoters.

One Person Company


Now there is a good news for the small entrepreneur, now they can do business by forming OPC, for incorporating OPC only one member and one director is required,

Advantage of forming an OPC:

1. Separate legal entity i.e. the one person company and the shareholders are separate persons. If the company embroiled in a legal controversy, the owner will not be sued, but the company will.
2. Personal assets of the owner or shareholders are protected in case of credit default.
3. Liabilities of the shareholders or directors are limited up to their share capital contribution in to the OPC.
4. OPC can have one director up to a maximum of 15 directors.
5. It can also use the name of private limited at the end of its name.
6. A one person company is not required to have annual general meeting.

Disadvantages of Forming an OPC

1. The base income tax rate for a one person company is 30% which may result in a higher tax as compare to the income tax slab rates of an individual (i.e. 10% to 30%).
2. Setting up a OPC involves more paper work compare to a sole proprietorship.


A Public Limited Company under Company Act 2013 is a company that has limited liability and offers shares to the general public. It’s stock can be acquired by anyone, either privately through (IPO) initial public offering or via trades on the stock market. A Public Limited Company is strictly regulated and is required to publish its true financial health to its shareholders.

Advantages of Public limited companies

1. More capital
2. Shares are offered to the general public at large i.e. anyone can invest in a public limited company. Hence, improves capital of the company.
3. More attention: Being listed on a stock market ensures that mutual funds, hedge funds and other traders take note of business of the company. This may result in better business opportunities for the Public Limited Company.
4. Spreading risk: Since the shares are sold to the public at large the unsystematic risk of the market is spread out.
5. Growth and expansion opportunities: Due to less risk, there is a perfect opportunity for growing and expanding the business by investing in new projects from the money raised through shares.

Requirements/Process for registration of Public Limited Companies

Here is what you should keep in mind while registering a public limited company:

1. Minimum 7 shareholders are required to form a public limited company
2. Minimum of 3 directors is required to form a public limited company
3. The minimum share capital of Rs. 5 lakhs is required
4. Digital signature certificate (DSC) of one of the directors is needed while submitting self-attested copies of identity and address proof
5. Directors of the proposed company will need a DIN
6. An application is required to be made for the selection of the name of the company
7. An application comprising the main object clause of the company is to be made. This object clause will define what a company will pursue after its incorporation

Documents required for incorporating a Public Limited Company

1. Proof of identity of all the shareholders and directors
2. Proof of address of all the directors and the shareholders
3. PAN number of all the shareholders and directors
4. Utility Bill of the proposed office i.e. proposed registered office for the company
5. A NOC (No Objection Certificate) from the landlord where the office of the company will be situated
6. Director Identification Number (DIN) of all the directors
7. Digital Signature Certificate (DSC) of the directors