How to form a company
The term ‘company’ means a group of people associated with some common purpose. The purpose may be business, sports, research, and charity. A company is incorporated under the Act or any previous company law. A company is registered under the Companies Act 2013.
If you are finding difficulty in understanding the process of formation of the company, well here’s how to form the company in four steps.
The very first step in the process of formation of any company is promotion. A company cannot come into existence unless somebody conceives the idea of the formation of a company. The person who conceives the idea is called the promoter. To start the promotion of the company first thing to do is to find a new idea. At the next stage, the promoter will do a complete investigation on the market about the demand and supply of the products and will verify the profitability. After verifying the profitability the promoter will proceed to assemble the requirements. He may persuade more people to join him. So, after the finalization of various agreements, he decides about the capital structure of the company. The requirements are estimated, fixed and working capitals are decided. Thereafter sources of finances are decided.
2. Incorporation of a Company
Nowadays various documents prescribed under the Companies Act are required to be filled with digital signatures. Every individual meaning to be appointed as director of a corporation shall make an application for allotment. Application for the availability of name shall be in form no along with prescribed fees. The name approved shall be valid for 60 days from the date on which the application for the reservation was made. M/A and A/A are the two documents that are the character and internal rules and regulations of the company and the main objects should match with the objects shown in e-form INC-1. Therefore, it must be drafted with utmost care.
3. Registration of the company
All the documents are examined and ensured by ROC. They confirm that all the requirements of the law regarding registrations of a company are complied with or not. ROC then issues the certificate of incorporation. Every certificate has its Corporate Identity No. which is unique for every company.
4. Issue of Certificate of Incorporation
The birth of the company takes place after the issue of a certificate. From thereafter a company is capable of doing all business activity. The procedure of incorporation is the same for private and one Person companies.
Forming a company is a lengthy procedure. At every stage, the promoter has to pay fees to the central or state government. The documents should be filled in very carefully and perfectly.