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Frequently Asked Questions (FAQ)
What is a company?
According to the companies’ act 1956, a company is an association of people which is formed and registered under this act or any previous company law. A company is a separate legal entity which is different from its shareholders. It is an important feature of company that there is a difference between people who have control over the affairs of a company and the people who actually own it.
What are the different types of companies?
Private Limited Company
Public Limited Company
Limited Liability Company
Unlimited Liability Company
Non-Profit Organizations (Which is also known as sec.25 companies)
What is Private Limited Company?
A private limited company is a company whose name contains ‘Private Limited’ at the end. A Private Limited Company should have minimum 2 members and 2 directors. Maximum number of members/shareholders should be 50.Total capital of a company is formed with shares and every shareholder is a partner. Directors should meet in meetings in regular intervals. All transactions should be audited.
What is Public Limited Company?
The company which is limited by shares and whose name ends with ‘Limited’ is Public Limited Company. The public limited company is formed with minimum of 7 Members and 3 Directors. There is no restriction on maximum number of members. A public limited company can offer its shares to public and accept deposits from it and there is no restriction on transference of shares. Minimum capital requirement for such type of company is 50,000.
What are the documents required for registration of Public Limited Company?
Identity proofs and addresses proofs of all proposed directors.
PAN Card is mandatory.
NOC from the landlord of registered office address.
Identity proofs of landlord.
How to register a public limited company?
Obtain DSC and DIN: - Digital Signature Certificate (DSC) and Director Identification Number (DIN) are required and it would be released in 5-7 working days.
Approval of Name: -You have to choose minimum of 1 name and maximum of 7 names and propose those all to Ministry of Corporate Affairs (MCA), Government of India. Your company name will be approve in 5-7 working days depends on the availability and other guidelines.
Company Registration: - Application of company registration should be filed to MCA with all required documents; it will take 5-7 working days to process.
What is the Company Act, 2013?
Company Act, 2013 is made to regulate the companies of India and to fix some norms, by Parliament of India.
What is a Limited Liability Company?
Limited Liability Company means the liability of a shareholder is limited to the share value. The shareholders are not liable for the liabilities of the company and his liability is limited to only unpaid amount of shares registered on his name. In Limited Liability Company one partner is not responsible for the misconduct of another partner.
What is a Non-Profit Organization?
A Non-Profit Organization is not formed for profit purpose, but it is formed for promoting arts, e-commerce, science, religion, sports, culture, charity and other useful objects and that organization should spend all profits on promoting its objects, there is no any member will be dividend in its profit. Registration of such organizations is done by central government. Non-Profit organization can be registered as Trust or Society under registrar of societies as non-profit company.
Can a Foreign company open a branch/liaison office in India?
Yes, a foreign company can open a branch/liaison office in India but it need approval from Reserve Bank of India (RBI). Approval from RBI, it should register to office of registrar of companies, New Delhi by filing necessary documents.
What are the Objects or Activities of a Company?
Every business or company is promoted in market for specific goods or services, these goods or services are called the objects or activities of a company. These objects or activities should be detailed in Memorandum of Articles (MOA) of company.
What is the Capital of a Company?
Capital is an contributed amount made by shareholders for corporation of company. Capital is divided further in small units and that unit is called shares.
What is the Authorised Capital or Registered Capital?
Authorised Capital or Registered Capital is the maximum ceiling limit of capital of a share, company can't issue an share above the limit of authorised capital. Limit of the authorised capital can only be increased after meeting of shareholders.