Incorporation of a Company under the Companies Act, 2013

Incorporation of a Company under the Companies Act, 2013

Starting a company in India is often the very first legal step an entrepreneur takes, and getting it right matters because every later compliance — from opening a bank account to raising funds — depends on how the company was incorporated. The Companies Act, 2013 lays down a structured, largely paperless process for forming a company, replacing much of the older, more fragmented procedure under the Companies Act, 1956.

This blog explains, in plain language, what incorporation means, who can incorporate a company, the documents required, and the step-by-step process on the MCA21 V3 portal, along with the common pitfalls that cause delays or resubmissions.

Incorporation is the legal process by which a company comes into existence as a separate legal person, distinct from its shareholders and directors. Once the Registrar of Companies (ROC) issues a Certificate of Incorporation (CoI) under Section 7 of the Act, the company gets its own legal identity, can own property, sue and be sued, and enjoys perpetual succession — meaning it continues to exist even if its members change.

Section 3 of the Act permits the following persons to form a company by subscribing to a Memorandum of Association:

•      Any 1 person, for a One Person Company (OPC).

•      Any 2 or more persons, for a private company (maximum 200 members).

•      Any 7 or more persons, for a public company.

•      For Section 8 (not-for-profit) companies, the process is broadly the same but with an additional licence requirement.

From Subscribers and Directors

•      PAN card and Aadhaar card of all subscribers/directors.

•      Identity proof (Voter ID, Passport or Driving Licence).

•      Latest address proof (bank statement/utility bill, not older than 2 months).

•      Passport-size photograph.

•      Digital Signature Certificate (DSC) of at least one subscriber/director for signing e-forms.

•      Proof of nationality; for foreign nationals, a passport is mandatory along with notarised/apostilled documents.

For the Registered Office

•      Latest utility bill (electricity/gas/telephone) not older than 2 months.

•      No Objection Certificate (NOC) from the owner of the premises.

•      Rent agreement or lease deed, if the premises is rented.

1.    Obtain Digital Signature Certificates (DSC) for all proposed directors/subscribers.

2.    Reserve a name using Part A of SPICe+, or file Part A and Part B together to save time. Up to 2 name options can be proposed, checked against existing companies, trademarks and the undesirable-names rules.

3.    Draft the Memorandum of Association (MOA) and Articles of Association (AOA) in the prescribed formats (Tables A to J of Schedule I).

4.    File SPICe+ Part B along with linked forms — AGILE-PRO-S (for GSTIN, EPFO, ESIC, bank account and Profession Tax where applicable), eMOA (INC-33), eAOA (INC-34), and INC-9 (declaration by subscribers/first directors).

5.    Pay the requisite stamp duty (state-dependent) and government fees online.

6.    The ROC scrutinises the application; if in order, it issues the Certificate of Incorporation (CoI) under Section 7, bearing the Corporate Identity Number (CIN).

7.    PAN and TAN are auto-generated and printed on the CoI itself, so no separate application is needed.

Under Section 9, from the date of incorporation the subscribers become members of the company and it becomes a body corporate capable of exercising all the functions of an incorporated company, with perpetual succession and a common seal (optional, since the 2015 amendment made a common seal non-mandatory).

A company having share capital cannot commence business or exercise borrowing powers until it files Form INC-20A within 180 days of incorporation, declaring that every subscriber has paid for the shares agreed to be taken by them, and confirming the registered office. Failure to file INC-20A attracts a penalty and can even lead to the company being struck off.

•      Choosing a company name that is deceptively similar to an existing trademark, leading to rejection or later legal disputes.

•      Delaying DSC procurement, which stalls the entire SPICe+ filing since e-forms cannot be signed without it.

•      Forgetting to file Form INC-20A within 180 days, risking penalty and possible strike-off.

•      Using an incomplete or outdated utility bill (older than 2 months) for registered office proof, causing resubmission.

•      Assuming a common seal is still mandatory and delaying document execution unnecessarily.

Q1. How long does it take to incorporate a company in India?

If documents are in order and the proposed name is unique, incorporation through SPICe+ typically takes 5–10 working days, though this can vary by ROC workload.

Q2. Is a registered office required at the time of incorporation?

Yes, though the Act allows a company to furnish the registered office address within 30 days of incorporation instead of at the time of filing SPICe+, giving some flexibility to new entrepreneurs.

Q3. Can a single person incorporate a private company?

A single individual can only incorporate a One Person Company (OPC). A private company needs a minimum of 2 subscribers/shareholders and 2 directors.

Q4. Is a common seal mandatory for a company?

No. Since the Companies (Amendment) Act, 2015, having a common seal is optional; authorised signatories can sign documents on the company's behalf.

Q5. What is the minimum capital required to incorporate a company?

There is no minimum paid-up capital requirement under the Companies Act, 2013; a company can be incorporated with a nominal capital such as ₹1,000 or ₹10,000, subject to the promoters' business needs.

Q6. What happens if the proposed name is rejected?

The applicant can resubmit with a fresh name within the resubmission window allowed on the portal, without paying the name-reservation fee again, provided it is within the permitted attempts.

Q7. Can incorporation be done fully online without visiting any government office?

Yes, the entire SPICe+ incorporation process, including DSC-based signing and payment, is completed online through the MCA portal without requiring any physical visit to the ROC.

Q8. What is AGILE-PRO-S used for during incorporation?

AGILE-PRO-S is a linked web form filed along with SPICe+ that simultaneously applies for GSTIN, EPFO registration, ESIC registration, a bank account, and Profession Tax registration (in states where applicable), reducing the number of separate post-incorporation applications.

Q9. Can foreign nationals be subscribers to an Indian company's MOA?

Yes, foreign nationals and even foreign body corporates can subscribe to the MOA of an Indian company, subject to FDI policy compliance and providing notarised/apostilled identity and address documents.

Incorporation under the Companies Act, 2013 has become significantly faster and more integrated with the SPICe+ and AGILE-PRO-S forms, allowing entrepreneurs to obtain a CIN, PAN, TAN, GST registration and even a bank account through a single window. Getting the documentation right the first time, choosing a compliant name, and promptly filing INC-20A after incorporation are the three things that save the most time and avoid penalties.