Incorporation of a Company

Incorporation, governed by Section 7 of the Companies Act, 2013, is the formal legal act that brings a company into existence as a separate legal person. Promoters begin by preparing and filing, with the Registrar of Companies (ROC) of the State where the registered office will be situated, the Memorandum and Articles of Association, declarations of compliance with the Act's requirements, particulars of the subscribers and the proposed directors, and proof of the registered office. In current practice this is done through the integrated e-form commonly known as SPICe+, which bundles company incorporation together with several other registrations into a single online filing with the Ministry of Corporate Affairs.

Once the Registrar is satisfied that every requirement has been met, the company is registered and the Registrar issues a Certificate of Incorporation (COI). This certificate carries the company's unique Corporate Identity Number (CIN) and is treated as conclusive evidence that all the requirements of the Act relating to registration have been complied with — it fixes the exact date on which the company's separate legal existence begins.

Commencement of Business [Section 10A]. Getting a Certificate of Incorporation is not, by itself, enough for a company having a share capital to actually start operating. Section 10A requires such a company's director to file, within 180 days of incorporation, a declaration with the Registrar confirming that every subscriber to the Memorandum has paid for the shares they had agreed to take, and that the company has also filed verification of its registered office. Only after this declaration is filed can the company lawfully commence its business or exercise any borrowing powers. …