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An overview
Companies Act, 2013 contains the provisions for the removal of name of company from the database of Ministry of Corporate Affairs and closure of the company. Company may voluntary close the company or Registrar of Company also have the right to close the company if company does not follow any of the provision of the Companies Act, 2013.You must know the provisions as mentioned in the Companies Act so you can plan and make proper compliances with all the provisions of the Companies Act, 2013.
⇒ Outflow of Money or Cost Saving
If you have incorporated a company and the company is not in operation or not commenced any businesseven then the company must comply with all the compliances of the Companies Act same like the company which is in operation. It will lead to unnecessary outflow of cash in updating the compliances.
⇒ Levy of Penalties
Even if your company is not operational, you will have to adhere to the compliance and face penalties on failure to do so. Closure of the company will free you from such compliances.
⇒ Inactivation of DIN and Disqualification of Director
If any company which is in existence and not adhere to the compliances it will lead to the disqualification of directors of the company under the Companies Act, 2013. Further, he cannot be the director for a period of five years in any company from the date of disqualification. His DIN (Director Identification Number) will also become inactive.
⇒ Income Tax Notices
The Income Tax Department can also send you the notices for non-compliances of Income Tax provisions or not filing the Income Tax Return. Unnecessary Income Tax Demands may be levied.
⇒ Maintenance of Record of Company
Even if the company is no operational or not commenced any business, you have to keep the record of the company as per the provisions laid down under the Companies Act, 2013 which is time and money consuming
There are many grounds on the basis of which Registrar can send the notice for removal of the name of company from the Register of Companies and all are covered below:
A company may also file an application for removing its name from the Registrar of Companies on any of the following grounds:
Due date for filing the STK-2
The form STK-2 shall be filed by the company within 30 days from the date of passing a special resolution for the closure of Private Limited Company.
Easy, Convenient and Time Saving
If you have incorporated a company which is not operational and want to wind up then this is the easiest way to close the company as it saves your time and money in unwanted mandatory compliances and filings.
Cost Saving
After removal of name and wind up of company, you don’t need to comply with the provisions of the Companies Act as the name of the company is strike off.
Avoid Penalties
Even if your company is not operational, you will have to adhere to the compliance and face penalties on failure to do so. Closure of the company will free you from such compliances.
No more Director in Default
If any company which is in existence and not adhere to the compliances it will lead to the disqualification of directors of the company under the Companies Act, 2013. Further, he cannotbe the director for a period of five years in any company from the date of disqualification. His DIN (Director Identification Number) will also become inactive. So timely closing of the company will save your DIN.
Avoid Income Tax Notices
The Income Tax Department can also send you the notices for non-compliances of Income Tax provisions or not filing the Income Tax Return. Removal and closing of company can save you from unnecessary demands.
No Need to maintain records
After the removal of name of company, no need to keep the records and documents of the company as laid down under the Companies Act, 2013.
Among all, the first step involved for the process of company incorporation is ascertaining the availability of name. A company is identified through its name it registered on the Ministry of Corporate Affairs. Hence choosing an appropriate name is the important and crucial thing.
For the same, an application will be submitted for the reservation of name to the Ministry of Corporate Affairsby login to the sitehttps://www.mca.gov.in/mcafoportal/login.do and preference wise 2 names along with the business objective can be provided. Once the name gets approved, it’s reserved for 20 days within which applicant needs to complete all the remaining process for the incorporation of the Company.
Stakeholders shall ensure that the proposed name selected does not contain any word as prohibited in Section 4(2) & (3) of the Companies Act, 2013 read with Rule 8 of the Companies (Incorporation) Rules, 2014.Points to be considered while suggesting the name:
-Check Trademark for your proposed name on the site https://ipindiaonline.gov.in/tmrpublicsearch/frmmain.aspx
– Check domain for your proposed name on the site https://www.registry.in/index
-Check the availability of Company Name on the site https://www.mca.gov.in/mcafoportal/viewCompanyMasterData.do
Therefore, choosing an appropriate name which does not prohibit any law will be the most important thing.
There is also another way to finalize the name of company and its incorporation in one go i.e., apply name and company incorporation together. However, if the same has been rejected by the MCA, then all the documentation will be done again
Once the name gets approved in PART A, the basic details will be automatically filled in all linked forms of PART B. There will be total 4 linked forms which will be generated such as AGILE-PRO, Spice+ MOA, Spice + AOA and INC-9. These linked forms will be filled up with the necessary details like capital subscription, name of shareholders and directors, percentage of holding among the shareholders, Interest of shareholders in other entities, etc.
For completion of the Part B, many other details and documents will be required which is discussed as below:
For the E-filing of all the forms, Digital Signature is a mandatory requirement. Digital Signature is in form of digital key containing all the information about the registered signatory like name, address, Contact No, Email ID and the authority detail which has provided the certificate. All the forms will signed digitally by the authorized signatory by proving its identity through the Digital Signature Certificates.
Director Identification Number is a unique identification number of 8 digits for the directors of a Registered Company.Every director will be provided a unique number with which he will be identified by the MCA. To become a director, one shall apply for getting the DIN from the MCA.To applying DIN, the applicant has to make an application in e-Form DIR-3 and shall follow the below mentioned process
This form is for GSTIN, Employees Provident Fund Organization registration, Profession Tax Registration, Opening of Bank Accounts, Shops and Establishment registration.
It is mandatory to register for ESIC, EPFO, Professional Tax (for Maharashtra) and bank account opening to obtain AGILE-PRO via e-form, However, GSTIN Registration is optional for the applicants.
MOA is a document which contains all the fundamental information about the company, the objectives of the company in brief, the share capital, type of Shares whether equity or preference and its shareholders details, details of allocation of shares among the shareholders along with their name, address and occupation, etc. Company can perform and undertake only those activities that are mentioned in the objectives of Memorandum of Association beyond which the company cannot undertake any other objective but the Memorandum of Association (MOA) can be amended with the approval of the shareholders.
As per Section 4 of the Companies Act, 2013, Companies shall form MOA as specified in Tables A to E of Schedule -I of the Act. Below is the list of tables with their meaning:
Table A: Company Limited by shares
Table B: Company limited by guarantee and not having a share capital
Table C: Company limited by guarantee and having a share capital
Table D: Unlimited Company and not having share capital
Table E: Unlimited Company and having share capital
Hence Company shall adopt an appropriate table applicable to it as there are various forms of tables for different companies.
AOA defines the rules and regulations that govern the internal management of the company for achieving its objectives.
Various forms in Tables F to J for different companies have been mentioned under Schedule I of the Companies Act 2013 and AOA must be in the respective form.
Table A: Company Limited by shares
Table B: Company limited by guarantee and having a share capital
Table C: Company limited by guarantee and not having a share capital
Table D: Unlimited Company and having share capital
Table E: Unlimited Company and not having share capital
Declaration shall be given by the subscribers and directors in the form INC-9 that:
Once all the above documents and details are ready, then the application for the incorporation of the company can be made via e-form Spice accompanied by Spice MOA and Spice AOA with the registrar under whose jurisdiction the address of the company is located. All these e-forms need to be affixed by the Digital Signatures of the respective persons.
The Registrar of Companies will grant a Certification of Incorporation along with the Copy of PAN, TAN, EPF, ESIC which will be used as for the identity of the company existence.
Once the company gets incorporated then there are many compliances which need to be performed by the company
The Company within thirty days of its incorporation shall furnish to the Registrar of Company regarding verification of its registered office by filing the e-form INC-22.
INC-22 shall be downloaded from the Ministry of Corporate Affairs site and any of the following document will be attached with this form:
Every Company incorporated shall within 180 days of its incorporation shall file the declaration for the Commencement of the Business with the Registrar of Company. It is the declaration regarding that all the subscribers to the MOA have deposited the total value of the shares agreed to be taken by them in the Company Bank Account. Proof for the same shall be attached while filing the form INC-20A. Bank Statement shall be used as the evidence for the same.
COMPLIANCESPRO has a separate team which is expert in completing this complex process very easily and helps you to get the company registered within 3 daysonly in a very reasonable price.
