Steps In Incorporation of A Company


Basically, incorporation refers to the process of forming a corporation or company. An incorporated company is a legal entity that has been recognized by the law as its own legal entity. Corporations have names like Inc. or Limited and become separate legal entities from their owners as a result.

The steps involved in incorporating a company

A public company can be formed with a group of seven or more people, while a private company requires only two. Incorporation involves the following steps.

1. Checking the availability of the name

The first step in incorporating a company is choosing antified through the name it registers. Listed in the company’s memorandum of association is the name of the company. When a company is a public company, its name must end in ‘Limited’ and when it is a private company, it must end in ‘Private Limited’.

Promoters need to submit an application to the State Registrar of Companies to find out if the chosen name is available for adoption. The application costs 500 rupees, and after completing all legal documentation within three months, the Registrar allows the company to adopt the name.

Learn more about Elements of Company Law

  • A company’s meaning and characteristics
  • Benefits of Incorporation
  • A disadvantage of incorporation
  • Raising the corporate veil
  • Types of Companies
  • One-person business
  • Contract with promoters

2. Articles of Association and Memorandum of Association preparation

A company’s constitution or rulebook is its memorandum of association. It outlines the fields in which the company will conduct business, its objectives, as well as the type of business that the company plans to conduct. It is then divided up into five clauses.

  1. Clause of name
  2. Clause of Registered Office
  3. Clause of objects
  4. Clause of Liability
  5. Clause in capitals 

The Articles of Association are basically documents that set forth rules that the company’s management will adhere to. This article creates a contractual relationship between the company and its members. It specifies the rights, duties, and liabilities of the members and is equally binding on all members.

3. Printed, signed, and stamped memoranda, articles, and their vetting

Promoters who have no previous experience in drafting the memorandum and articles of association often seek the help of the Registrar of Companies for their memorandum and articles of association drafting.

Once the memorandum of association and articles of association have been approved by the Registrar of Companies, they can be printed in chronological order. The memorandum and articles are generally divided into paragraphs.

A witness must witness each subscriber’s signature on the article in order for it to be valid. Otherwise, the article will not be accepted.

4. The power of attorney

An attorney will be able to act on behalf of the company and its promoters after the promoter has completed the legal and complex documentation formalities of incorporation. As well as the memorandum and articles, the attorney has the authority to modify other documents filed with the registrar.

5. The Registrar of Companies must also receive the following documents:

First – Form No.32 – Consent of directors

No.18 – Notice of Registered Address – Second e-form

Third – e-Form No.32 – Particulars of Directors

6. Form 1 of the Statutory Declaration

Furthermore, the declaration states that ‘all provisions of the Companies Act and rules made there under have been considered and all things precedent and incidental to them have been included.’

7. Fees for registering

A The Registrar of Companies charges a predetermined fee at the time of incorporation, which is based on the nominal capital of the company and its share capital.

8. Incorporation certificate

When the Registrar is completely satisfied that the company is meeting all requirements, the company will be registered and a certificate of incorporation will be issued. Therefore, a company incorporation certificate is a definite proof that it has met all the requirements of the Act.

Solved Question for you

There should be three clauses in the association memorandum.

Answer – The memorandum of association contains five clauses, as follows

  1. Clause of the name
  2. Clause of Registered Office
  3. Clause of objects
  4. Clause of Liability
  5. Clause capital

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