What Does Incorporation Mean?
Incorporation is the legal process of creating a new company as a separate legal entity. Once a company is incorporated, it gets its own identity -- a Corporate Identity Number (CIN), a PAN card, a registered address, and the ability to own property, enter contracts, sue and be sued -- all independent of its founders.
The incorporation process is governed by Sections 3 to 22 of the Companies Act 2013, read with the Companies (Incorporation) Rules, 2014. The Ministry of Corporate Affairs (MCA) has simplified this process significantly through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) form.
Key Legal Provision
Section 3(1) states: "A company may be formed for any lawful purpose by -- (a) seven or more persons, where the company to be formed is to be a public company; (b) two or more persons, where the company to be formed is to be a private company; or (c) one person, where the company to be formed is to be One Person Company." This is the starting point for all company formation in India.
Who Can Form a Company?
Section 3 specifies the minimum number of persons required to form a company:
| Company Type | Minimum Persons | Who Can Be a Subscriber |
|---|
| Public Limited | 7 | Any natural person or body corporate |
| Private Limited | 2 | Any natural person or body corporate |
| One Person Company | 1 | Only a natural person who is an Indian citizen (residents and NRIs after 2021) |
"A company formed under this Act may be -- (a) a company limited by shares... (b) a company limited by guarantee... (c) an unlimited company."
-- Section 3(2), Companies Act 2013
Example: Vikram (Indian resident) and Sarah (British national) want to start a company in India. They can form a Private Limited Company as two subscribers. Sarah being a foreign national is not a problem -- there is no restriction on foreign nationals being subscribers/shareholders. However, at least one director must be an Indian resident (Section 149(3)).
The Memorandum of Association (MOA)
Section 4 requires every company to have a Memorandum of Association, which is essentially the constitution of the company. It contains six mandatory clauses:
Name Clause
The name of the company with "Private Limited" or "Limited" as the last words. The name must not be identical or too similar to an existing company or trademark. Section 4(2) prohibits names that are undesirable in the opinion of the Central Government. Rule 8 of Incorporation Rules lists specific keywords that require prior approval (e.g., "Hindustan", "India", "National", "Board", "Authority").
Registered Office Clause
The state in which the registered office will be situated. Note: you specify only the state in the MOA, not the full address. The exact address is filed separately with the ROC under Section 12.
Objects Clause
The objects for which the company is proposed to be incorporated and any matter considered necessary in furtherance thereof. After the 2015 amendment, there is no distinction between "main objects" and "other objects" -- a single objects clause suffices.
Liability Clause
Whether the liability of members is limited by shares, limited by guarantee, or unlimited.
Capital Clause
The amount of authorized share capital and its division into shares of fixed amount. For example: "The authorized share capital of the company is Rs. 10,00,000 divided into 1,00,000 equity shares of Rs. 10 each."
Subscription Clause
The names, addresses, and occupations of the subscribers, along with the number of shares each subscriber takes. Each subscriber must take at least one share.
The Articles of Association (AOA)
Section 5 requires every company to have Articles of Association, which contain the internal rules and regulations for managing the company. Think of the MOA as the external charter (what the company can do) and the AOA as the internal rulebook (how the company will operate).
The Articles typically cover: share transfer procedures, Board meeting rules, director appointment and removal, dividend policy, borrowing powers, indemnity provisions, and dispute resolution mechanisms.
Schedule I -- Model Articles
Schedule I of the Companies Act 2013 contains model Articles for different types of companies. Table F applies to companies limited by shares, Table G to companies limited by guarantee with share capital, Table H to companies limited by guarantee without share capital, Table I to unlimited companies with share capital, and Table J to unlimited companies without share capital. If a company does not draft its own Articles, Table F automatically applies.
The SPICe+ Incorporation Process
Since February 2020, all company incorporations must be done through the SPICe+ (Simplified Proforma for Incorporating Company Electronically Plus) integrated web form on the MCA portal. This single form replaces what used to be 5 separate filings.
What SPICe+ Includes
| Service | Earlier Requirement | Now via SPICe+ |
|---|
| Name Reservation | Separate RUN application | Part A of SPICe+ |
| Incorporation | INC-7/INC-2 forms | Part B of SPICe+ |
| DIN Allotment | Separate DIR-3 application | Integrated in SPICe+ |
| PAN & TAN | Separate applications to NSDL | Auto-allotted via SPICe+ |
| EPFO Registration | Separate EPFO application | Integrated via AGILE-PRO-S |
| ESIC Registration | Separate ESIC application | Integrated via AGILE-PRO-S |
| GST Registration | Separate GST application | Optional via AGILE-PRO-S |
| Bank Account | Visit bank branch | Opening request via AGILE-PRO-S |
| Professional Tax | State-specific application | Integrated for Maharashtra |
Pro Tip
The SPICe+ form generates up to 9 registrations in a single filing: CIN, PAN, TAN, DIN (for up to 3 directors), EPFO, ESIC, GST, professional tax, and bank account opening. This has reduced the average incorporation time from 15-20 days to 3-5 working days. we handle the entire SPICe+ filing process and typically get the Certificate of Incorporation within 3-4 working days.
Documents Required for Incorporation
Section 7(1) lists the documents that must be filed with the Registrar for incorporation:
For Directors/Subscribers (Indian)
- PAN Card (mandatory)
- Aadhaar Card
- Passport-size photograph
- Address proof (bank statement/utility bill not older than 2 months)
- Mobile number and email ID linked to Aadhaar
- Digital Signature Certificate (DSC)
For Directors/Subscribers (Foreign National)
- Passport (notarized and apostilled)
- Address proof from home country (notarized and apostilled)
- Digital Signature Certificate (DSC)
For Registered Office
- Registered office address proof (utility bill not older than 2 months)
- Rent agreement or ownership proof
- NOC from the property owner
Government Fees for Incorporation
| Authorized Capital | ROC Fee | Stamp Duty (varies by state) |
|---|
| Up to Rs. 1 lakh | Nil (for Pvt Ltd) | Rs. 200-1,300 |
| Rs. 1 lakh to Rs. 5 lakh | Rs. 200 | Rs. 200-1,300 |
| Rs. 5 lakh to Rs. 10 lakh | Rs. 500 | Rs. 500-5,000 |
| Rs. 10 lakh to Rs. 50 lakh | Rs. 2,000 | Rs. 2,000-15,000 |
| Rs. 50 lakh to Rs. 1 crore | Rs. 4,000 | Rs. 5,000-25,000 |
Certificate of Incorporation -- Section 7(2)
Once the ROC is satisfied that all requirements have been complied with, they issue a Certificate of Incorporation in Form INC-11. This certificate contains:
- Name of the company
- CIN (Corporate Identity Number)
- Date of incorporation
- PAN and TAN of the company
"On and from the date mentioned in the certificate of incorporation, the subscribers to the memorandum and all other persons, as may, from time to time, become members of the company, shall be a body corporate by the name contained in the memorandum, capable of exercising all the functions of an incorporated company under this Act and having perpetual succession..."
-- Section 9, Companies Act 2013 (Effect of Registration)
Critical -- Commencement of Business
Section 10A (inserted by Companies (Amendment) Ordinance, 2018) requires that a company incorporated after the commencement of this section shall not commence business unless: (a) a declaration is filed within 180 days by a director in Form INC-20A confirming that every subscriber has paid the value of shares, and (b) the company has filed a verification of its registered office address with the ROC. If INC-20A is not filed within 180 days, the company can be struck off by the ROC under Section 248.
Post-Incorporation Compliance (First 30 Days)
Open Bank Account
Open a current account in the company's name using the Certificate of Incorporation, PAN card, and Board resolution. Deposit the share subscription money.
File INC-20A
File the declaration of commencement of business within 180 days. This confirms subscribers have paid for their shares.
Appoint Auditor
Appoint the first statutory auditor within 30 days of incorporation (Section 139(6)). File Form ADT-1 within 15 days of the appointment.
Issue Share Certificates
Issue share certificates to subscribers within 2 months of incorporation (Section 46, Rule 5 of Share Capital Rules).
Maintain Statutory Registers
Set up Register of Members (Section 88), Register of Directors and KMP (Section 170), Register of Charges (Section 85), and Minutes Books (Section 118).
TaxClue Handles Everything
Company incorporation involves multiple steps, documents, and deadlines. Missing even one can result in penalties or the company being struck off. our expert team handles the complete incorporation process -- from name reservation to post-incorporation compliance. Our package includes SPICe+ filing, DIN, DSC, MOA/AOA drafting, PAN/TAN, and all post-incorporation filings. Get started with a free consultation today.
Need Help with Compliance?
Our CA experts guide you through the entire process — registration to filing.
❓ Frequently Asked Questions
How long does it take to incorporate a company in India?
With SPICe+, company incorporation typically takes 3-5 working days from the date of filing, provided all documents are in order and there are no name objections.
What is the minimum capital required for incorporation?
There is no minimum paid-up capital requirement after the 2015 amendment. You can incorporate with as little as Rs. 2 (two shares of Rs. 1 each). However, Rs. 1 lakh authorized capital is recommended.
Can foreigners incorporate a company in India?
Yes. Foreign nationals and NRIs can be shareholders and directors of Indian companies. However, at least one director must be an Indian resident who has stayed in India for at least 182 days in the previous calendar year.
What is Form INC-20A?
It is the Declaration of Commencement of Business that must be filed within 180 days of incorporation, confirming that subscribers have paid for their shares. Failure to file can lead to the company being struck off.
What documents are needed for company incorporation?
PAN, Aadhaar, address proof, photographs of directors, DSC, registered office proof (utility bill + rent agreement/ownership proof + NOC from landlord).
What is the difference between MOA and AOA?
MOA (Memorandum of Association) defines what the company can do -- its name, objects, capital. AOA (Articles of Association) defines how the company will operate -- meeting rules, share transfer process, director powers.
What is SPICe+ form?
SPICe+ is the integrated web form on MCA portal for company incorporation. It combines name reservation, incorporation, DIN allotment, PAN/TAN, EPFO, ESIC, and GST registration in a single filing.
What happens after receiving the Certificate of Incorporation?
You must open a bank account, file INC-20A within 180 days, appoint an auditor within 30 days, issue share certificates within 2 months, and set up statutory registers.
