Guide to Incorporate Company in India

For setting up a business establishment in India, first step is to incorporate a company whether a private limited or a public limited, which includes:

ü      obtaining director identification number (DIN),

ü      obtaining digital signature certificate,

ü      reserving the company name with the Registrar of Companies (ROC),

ü      paying stamp duties

ü      filing all incorporation forms and documents  and

ü      obtaining the certificate of incorporation.

Thereafter, it is required to get the other necessary formalities done such as:

ü      Company seal

ü      Permanent Account Number (PAN).

Based on the nature of business, it may further be required to obtain a

Tax Account Number (TAN) come taxes deducted at source (TDS).

Subsequently, depending upon the nature of business additional requirements may include

ü      registration for Value Added tax (VAT),

ü      registration with Employees' Provident Fund Organization,

ü      registration for medical insurance (ESIC)

For incorporating a company in India, there is a series of steps required for incorporating a private or public limited company in India. These steps work according to the guidelines provided by The Company’s Act, 1956.

1. The very first step of formation for incorporating a company is to get the name of the company registered at the Registered of Companies (ROC) in the territory of the company’s registered office. The company’s name should not match any existing name. ROC at least takes a week from the date of registration of the name to assure that the name does not exist before.

2. After the completion of this process, the company has to file a Memorandum of Association and Articles of Association with ROC itself. For a public company, the company’s name should end up with “Limited” and for a private company; the company’s name should end up with “Private Ltd”.

3. After submitting the Memorandum of Association and Articles of Association, ROC issues an incorporated certificate only after receiving a mandatory registration fees.

4. After these steps, the next main step is to get the address of the registered office. It is not mandatory for the registered office to be the same building from where all the work is being carried out.

5. Foreign companies need to fill up a FNV-5 form with the Reserve Bank of India to get the permission to start the manufacturing and trading activities in India without an Indian partner. Any Indian or foreigner can be the director of a company in India. Any person whether he/she is Indian or foreigner and any Indian company or foreign company can be shareholder of an Indian company.

6. For incorporating a Public Company, a minimum of three directors and seven shareholders are required and for incorporating Private Company, a minimum of two directors and two shareholders are required.

7. After the registration and certification, each company needs to designate an Auditor. He has a very important duty to perform in the company. All the balance sheets, company’s documents and company’s meetings are scrutinized by him.

8. Every company should have an account book and written records of all the directors, shareholders and the employees. Account book takes care of all income, including profits and losses and the records register takes care of all the past and present work of the people associated with the company.

9. At last, each company should have a different logo, and a stamp of that logo which is imprinted on each written record and each written document of the company. 

Agarwal and Company Law Offices LLP.

Limitation Act - Time for Appeal

Law relating to limitation is incorporated in the Limitation Act 1963 which prescribes different periods of limitation for suits, petition or applications. The act applies to all civil proceedings and some special criminal proceedings which can be taken in the court of law unless its application is excluded by any enactment. The Act extends to whole of India except the state of Jammu and Kashmir. The statutes of limitation are based on the principles of public policy which diligence and to prevent oppression.

 

The Law of limitation bars the remedy in a court of law only when the period of limitation has expired, but it does not extinguish the right that it cannot be enforced by judicial process. Thus if a claim is satisfied outside the court of law after the expiry of period of limitation, that is not illegal.

 

The intention of the law of limitation is, not to give right where there is not one, but to interpose a bar after a certain period to a suit to enforce an existing right. The object is to compel litigants to be diligent in seeking remedies in court of law by prohibiting stale claims. It is to help the bona fide claimant and to prevent fraud being practiced by people upon innocent persons by keeping action hanging on them for a long time.

 

Computation of the period of Limitation

 

The Courts in India are bound by the specific provisions of the limitation Act and are not permitted to move outside the ambit of these provisions. The Act prescribed the period of limitation in Articles in schedule to the Act. In the articles of the schedule to the limitation Act. columns 1,2, and 3 must read together to give harmonious meaning and construction.

 

Bar of Limitation

 

Sec 3 of the Act provides that any suit, appeal or application if made beyond the prescribed period of limitation, it is the duty of the court not to proceed with such suits irrespective of the fact whether the plea of limitation has been setup in defence or not. The provision of sec 3 are mandatory. The court can suo  motu take note. The effect of sec 3 not to deprive the court of is jurisdiction. Therefore, decision of a court allowing a suit which had been instituted after the period prescribed is not vitiated for want of jurisdiction.

 

Extension of Time in Certain Cases

 

Doctrine of sufficient cause

 

Sec 5 allows the extension of prescribed period in certain cases on sufficient cause being shown for the delay. This is known as doctrine of “Sufficient cause” for condonation of delay which is embodied in sec 5 of the Limitation Act. 1963. Sec 5 provides that any application other than application under provision of order XXI of the code of civil procedure 1908 may admitted after the period of limitation if the appellant satisfies the court that he had sufficient cause for not preferring the appeal. However it must be a cause which is beyond the control of the party.

 

Person under legal disability

 

Section 6 is an enabling section to enable persons under disability to exercise their legal rights within a certain time. Section 7 supplements section 6,section 8 controls these section, which served as an exception  to sec 6 and 7. The combined effect of section 6 and 8 is that where the prescribed limit expires before the cessation of disability, for instance, before the attainment of majority, the minor will no doubt be entitled fresh period of limitation.

 

Computation of period of limitation:

i)  Section 12 to 24 deals with computation of period limitation. As per section 12 the day to be excluded in computing period is the day from which the period is to be reckoned and the time requisite for obtaining a copy of decree shall be excluded.

ii)  Time which leave to sue or appeal as a pauper is applied for also excluded.

iii)  The time which a suit or application stayed by an injunction and the continuance of the injunction and the time taken for obtaining sanction or consent.

Divorce by mutual consent

i) A separation of one year before filing the case please note that actual physical separation is not required, even if both parties are sleeping in the same bedroom they can be said to be seperated for the purposes of mutual consent, if they are not living together as husband and wife;

 

ii) A flawlessly drafted MoU (Memorandum of Understanding) that settles the terms on which you part away, people don’t understand the importance of this, this is extremely important so as to end the matters with a finality once and for all, there are no loose ends and make sure there is no litigation in future;

 

Once the above is done – you have to get drafted the Divorce petition that encapsulates the contents of your earlier MoU.

 

After Court

 

When you file your divorce by mutual consent petition – it comes up for hearing and your statements are recorded, then the court gives you a period of 6 months (basically to think over your decision) after which,  on recording of final statements divorce decree is passed.

 

Monetary Settlement/Maintenance/Alimony/Child Custody issues.

 

A Mutual Consent petition gives you the flexibility to come to your own terms with respect to the issue. If a full and final settlement is reached – the money can be paid before the court at the time of final hearing.

 

In all this procedure enables couples to part away amicably on a good note, without ruinous litigation, and without much expense.