NAMING AND REGISTERING A BUSINESS IN FORM OF COMPANY
In India, incorporation of a company is governed by the Companies Act 2013. It is the most important piece of legislation that empowers the Central Government to regulate the formation, financing, functioning, and winding up of companies. It applies to the whole of India and to all types of companies, whether registered under this Act or an earlier Act. But it does not apply to universities, co-operative societies, unincorporated trading, scientific and other societies.
The Act is administered by the Central Government through the Ministry of Corporate Affairs and the Offices of Registrar of Companies, Official Liquidators, Public Trustee, Company Law Board, Director of Inspection, etc. The Registrar of Companies (ROC) controls the task of incorporation of new companies and the administration of running companies.
The Official Liquidators who are attached to the various High Courts functioning in the country are also under the overall administrative control of the Ministry. The set-up at the Headquarters includes the Company Law Board, a quasi-judicial body, having the principal Bench at New Delhi, an additional principal bench for Southern Region at Chennai and four Regional Benches located at New Delhi, Mumbai, Kolkata, and Chennai. The organization at the Headquarters also includes two Directors of Inspection and Investigation with a complement of staff, an Economic Adviser for Research and Statistics, and other Officials providing expertise on legal, accounting, economic and statistical matters.
The four Regional Directors, who are in charge of the respective regions, comprising a number of States and Union Territories, interalia, supervise the working of the Offices of Registrars of Companies and the Official Liquidators working in their regions. They also maintain liaison with the respective State Governments and the Central Government in matters relating to the administration of the Companies Act, 1956.
Registrar of Companies (ROCs) appointed under Section 609 of the Companies Act, covering various States and Union Territories, are vested with the primary duty of registering companies floated in the respective States and the Union Territories and ensuring that such companies comply with the statutory requirements under the Act. Their offices function as registry of records relating to the companies registered with them.
For registration and incorporation of a company, an application has to be filed with Registrar of companies. Application for registration of a company accompanied by the selected names, Memorandum of Association and Articles of Association and other necessary documents is to be filed with the Registrar of companies of the State in which the company is proposed to be incorporated.
Under the Companies Act, an entrepreneur can form two types of companies, namely a private company or a public company.
A Private Company is one, the articles whereof contains the following restrictions:-
- Restricts the minimum paid-up share capital to such an amount as may be prescribed but which shall not be less than rupees one lakh;
- Restricts the rights of members to transfer its shares if any;
- Limits the number of its members to fifty excluding the past or present employees of the company who are members of the company;
- Prohibits any invitation to the public to subscribe for any shares or debentures of the company;
- Does not invite or accept any deposits from persons other than its members, directors or their relatives
- Also, the minimum number of members in a private company is two and such a company must have the words ‘Pvt Ltd’ as the last part of its name.
A Public Company, as defined in the Companies Act, has the following features:-
- Its shares are freely transferable;
- There is no ceiling on its membership;
- It can invite the general public to subscribe to its shares;
- It has a minimum paid-up capital of Rs. 5 lakhs or such higher paid-up capital as may be prescribed;
- It is a private company which is a subsidiary of a public company.
- Also, the minimum number of members in a public company is seven and such a company must have the word ‘Ltd’ as the last part of its name.
- Procedures for Registration of a Business
- List of offices of Registrar of Companies
- Registration Forms
- FAQs by Ministry of Corporate Affairs
- Guidelines by the Ministry of Corporate Affairs
- Instruction kit for filling eForms
WHAT IS FINANCIAL REPORTING?
Financial reporting includes the following:
- the external financial statements (balance sheet, income statement, statement of cash flows, and statement of stockholders’ equity)
- The notes to the financial statements
- Quarterly and annual reports to stockholders
- Press releases and conference calls regarding quarterly earnings and related information
- Financial information posted on a corporation’s website
- Financial reports to governmental agencies including quarterly and annual reports to the Securities and Exchange Board of India (Fema) ROC/ Income Tax / Banks / Investors / Money Lenders.
- Prospectuses pertaining to the issuance of common stock and other securities
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