In common law, a corporation may be a “legal person” or a “legal entity,” which is separate and capable of surviving beyond its members’ lives. While startups and little businesses are sprouting in India like never before, it’s essential to think about the flip side. Incorporation of company not only protects your assets in case of bankruptcy or financial difficulties, but it also offers various other benefits.
Advantages Of Incorporation Of A Corporation:
- Separate Legal Identity
- Perpetual Succession
- Transferable Shares
- Capacity to Sue
- Less load of Liability
Various Sorts Of Companies:
One-person company (OPC) – OPC is analogous to the only proprietorship, where one person can start the business. While there’s no distinction between the owner and the business within the sole proprietorship, an OPC allows the owner to limit his liabilities. This suggests your personal belongings and bank accounts shielded from any business loss, which may occur. OPC has fewer compliance requirements than that of a personal company. Yet OPCs must file audited financial statements with the Ministry of Corporate Affairs at the top of every fiscal year like all kinds of companies.
Limited Liability Partnership (LLP) – LLP incorporation suggested for consulting services and professional firms. During this business, partners have indebtedness on an individual basis and a lower compliance burden than that of private Ltd. Yet, completing an LLP incorporation tedious as compared to a personal Ltd.
Incorporation Procedure Of A Corporation:
- Apply for Director Number (DIN)
DIN is an eight-digit number allotted by the Ministry of Corporate Affairs (MCA). It’s a person-specific unique number. So if you hold the directorship of two companies, you would like not to have another DIN for the different companies. For DIN, you would like to submit your proof of identity and so the address proof with the shape.
- Submit Digital Signature Certificate (DSC)
A DSC may be a digital equal of a handwritten signature. A bit like a driver’s license authorizes one to drive during a particular country. A DSC not only reduces the cost and time of signing hard copies but also authenticates the knowledge details of the holder. DSC is additionally mandatory for several compliance filings of the private Ltd. on the MCA website. There are various licensed Certified Authorities (CA) who authorized to issue DSC.
- Register on the MCA Portal
The Ministry of Corporate Affairs has made the procedure of incorporating a corporation simple with SPICe Form INC-32. The standard time of incorporation has reduced to at least one to 2 days with the new SPICe form. Earlier, if an individual had to include a corporation, he had to use various separate procedures one by one.
- Receive Certificate of Incorporation
Once your company registered, MCA issues the Certificate of Incorporation with Corporate Identity Number (CIN). This certificate proves your company’s registration with the Registrar of Companies (ROC). After successfully incorporating the company, a PAN (Permanent Account Number) is additionally allotted and dispatched to the registered office. TAN number is additionally provided to the administrators for TDS filing.