Question 1

What are the compliance requirements after a company is registered?

Accepted Answer

After registering a company in India, it is essential to meet specific compliance requirements to remain operational and avoid penalties. Below are the key compliance obligations:

Appointment of a Statutory Auditor: A statutory auditor must be appointed within 30 days of incorporation to audit the company's accounts.

Filing of Annual Returns: Submit Form MGT-7 annually to the Ministry of Corporate Affairs (MCA) to disclose shareholder and company information.

Filing Financial Statement: File Form AOC-4 annually to report the company's financial statements.

Conducting Board Meetings: Hold at least four board meetings annually, ensuring compliance with company governance norms.

Income Tax Filing: File ITR-6 annually, irrespective of whether the company has income or is non-operational.

Maintenance of Books of Accounts: Keep accurate and updated records of all financial transactions as per legal requirements.

GST Filing (if applicable): File GST returns (monthly, quarterly, or annually) depending on the company's turnover.

Question 2

Can a foreign national or NRI be a director in an Indian company?

Accepted Answer

Yes, foreign nationals and NRIs can be directors of an Indian company if:

1. The company has at least one resident director who has lived in India for at least 182 days in the previous calendar year.
2. They obtain a Director Identification Number (DIN) and a Digital Signature Certificate (DSC).
3. They provide required documents, including a passport, proof of address, and a consent declaration.

Note: Ensuring compliance with these requirements is crucial to avoid legal issues. Platforms like Silversix Consultant can help with the documentation and registration process.

Question 3

How can I conduct a company name search online?

Accepted Answer

To conduct a company name search:

1. Visit the MCA Name Availability Tool on the MCA website.
2. Enter your proposed company name in the search bar.
3. The system will display names that are identical or similar to your query.
4. Ensure compliance with Companies Act, 2013 naming guidelines:

Avoid using restricted or offensive words.

Ensure the name reflects the company's objectives.

You can use the Silversix Consultant Company Name Search Tool for quick and accurate results. Enter your proposed company name to check for identical or similar names. Ensure your name complies with the Companies Act, 2013, avoiding restricted words and aligning with your company's objectives.

Pro Tip: Check the trademark database to ensure the name is not trademarked by another entity.

Question 4

What is the difference between authorized capital and paid-up capital?

Accepted Answer

Authorized Capital: The maximum amount of share capital a company is permitted to issue as per its Memorandum of Association (MOA).

Paid-Up Capital: The actual amount received by the company from shareholders for the shares issued.

Example:

If a company's authorized capital is ₹10,00,000, it cannot issue shares exceeding this value.

If the paid-up capital is ₹5,00,000, this means shareholders have contributed ₹5,00,000 for the shares issued so far.

Question 5

How much does it cost to register a company in India?

Accepted Answer

The cost depends on the type of company. Key expenses include:

Government Fees:

Name Reservation: ₹1,000

SPICe+ Form Filing: ₹2,000 (for authorized capital up to ₹10 lakh).

Professional Fees:

₹5,000-₹20,000 charged by chartered accountants or company secretaries.

Additional Costs:

Digital Signature Certificate (DSC): ₹500-₹2,000 per director

PAN and TAN: Included in SPICe+ filing.

Note: Costs are subject to change based on specific requirements and additional compliance needs.

Question 6

How do I open a current bank account for my company?

Accepted Answer

To open a current bank account, submit the Certificate of Incorporation, PAN, Memorandum and Articles of Association, Board Resolution authorizing account opening, and KYC documents of directors to the chosen bank.

Question 7

Does a private limited company have perpetual existence?

Accepted Answer

Yes, a private limited company has perpetual existence, meaning it continues to exist regardless of changes in ownership or the death of its members.

Question 8

What are articles of association and memorandum of association?

Accepted Answer

The Memorandum of Association (MOA) defines a company's objectives, scope, and relationship with external parties. The Articles of Association (AOA) outline the rules and regulations for the company's internal management and governance.

Question 9

What are the penalties for non-compliance with annual filings?

Accepted Answer

Penalties for non-compliance with annual filings include:

A late filing fee of ₹100 per day, per form.

Disqualification of directors for up to 5 years.

Fines ranging from ₹50,000 to ₹5,00,000 for the company and responsible officers.

In severe cases, the company may be struck off the MCA register.

Additionally, non-compliance can result in operational restrictions, making it difficult to secure funding, form partnerships, or work with government agencies.

It's very important for companies to adhere to these requirements to avoid both financial penalties and long-term legal consequences.

Question 10

What happens if my proposed company name is already taken?

Accepted Answer

If your proposed company name is already taken, you must choose a different name that is unique and complies with the MCA's naming guidelines. You can use the MCA Name Availability Tool to check the availability of a name.

Question 11

What are the corporate tax rates for companies in India?

Accepted Answer

Domestic companies are taxed at 30%, or 25% if turnover is up to ₹400 crore, with a concessional rate of 22% (25.17% effective) for companies not claiming exemptions and 15% (17.16% effective) for new manufacturing companies. Foreign companies are taxed at 40%, with surcharge and cess applicable.

Question 12

How do I verify if a company is registered in India?

Accepted Answer

Visit the Ministry of Corporate Affairs (MCA) website, use the 'View Company/LLP Master Data' tool, and enter the company's name or Corporate Identification Number (CIN) to check its registration status.

Question 13

Is GST registration mandatory during company registration?

Accepted Answer

GST registration is not mandatory during company registration. However, it is required if the company's turnover exceeds ₹40 lakh for goods or ₹20 lakh for services. It is also mandatory for companies involved in inter-state supply or e-commerce activities.

Question 14

What is the minimum and maximum number of shareholders allowed for company registration?

Accepted Answer

A private limited company requires a minimum of 2 shareholders and allows a maximum of 200 shareholders. A public limited company requires a minimum of 7 shareholders, with no limit on the maximum number of shareholders.

Question 15

Can I register a company using a virtual office address?

Accepted Answer

Yes, you can register a company using a virtual office address, provided it is a legally valid address and you have the necessary documentation, such as a rental agreement and utility bills, to verify its authenticity.

Question 16

How can ownership of a private limited company be transferred?

Accepted Answer

Ownership is transferred by drafting a Share Transfer Agreement, filling Form SH-4, paying stamp duty, updating the Register of Members, and notifying the MCA if necessary.

Question 17

What are the consequences of not complying with post-registration obligations?

Accepted Answer

Non-compliance can lead to financial penalties of ₹100 per day per form, disqualification of directors for up to 5 years, legal action, suspension or revocation of the company's registration, and operational restrictions such as difficulty in securing funding or working with government agencies.

Question 18

What are the differences between a business name and a trade name?

Accepted Answer

Business name is the official name registered with the MCA for legal purposes, while a trade name is the brand name used for marketing products or services. Multiple trade names can be used under one business name, but trademark laws apply for protection.

Question 19

How many days does it take to register a company?

Accepted Answer

Company registration in India usually takes about 7-10 working days if all documents are in order. Delays can happen if there are issues such as name being rejected or mistakes in the documents. Using the SPICe+ form can help speed up the process since it combines multiple services like PAN, TAN, and GST registration. However, the time it takes can vary based on the type of company and any extra steps needed.

Question 20

Who governs and controls private limited companies in India?

Accepted Answer

Private limited companies in India are governed by the Companies Act, 2013, regulated by the Ministry of Corporate Affairs (MCA), with day-to-day operations managed by the Board of Directors. Shareholders have the power to appoint or remove directors through voting.

Question 21

What are the penalties for not complying with post-registration obligations?

Accepted Answer

Non-compliance can result in financial penalties (₹100 per day), director disqualification for up to 5 years, legal action, and damage to reputation, making it difficult to secure funding or partnerships.

Question 22

What documents are required for company registration in India?

Accepted Answer

Required documents include PAN cards for directors and shareholders, passport for foreign nationals, Aadhaar or Voter ID for identity proof, bank statements/ utility bills for address proof, MOA and AOA, and proof of office address and rent agreement.

Question 23

What are the steps to appoint a statutory auditor?

Accepted Answer

The Board must pass a resolution to appoint the auditor within 30 days, file Form ADT-1 with the MCA within 15 days, and ensure the auditor meets the eligibility criteria under the Companies Act, 2013.

Question 24

How can I check if my company is registered?

Accepted Answer

Visit the MCA website, search using the company's name or CIN, and view the company's registration status, including incorporation date and authorized capital.

Question 25

What happens if my proposed company name is rejected?

Accepted Answer

If rejected, review the feedback provided by MCA, submit a new name using the RUN service, and ensure it adheres to naming guidelines under the Companies Act, 2013.

Question 26

Does a private limited company have perpetual existence?

Accepted Answer

Yes, a private limited company has perpetual existence, meaning it continues even if directors or shareholders change, ensuring stability and continuity.

Question 27

What are the tax implications associated with company registration?

Accepted Answer

Tax implications include corporate tax (22% for regular companies, 15% for new manufacturing companies), GST registration for businesses exceeding ₹20 lakh turnover, and taxes on dividends, which are taxable in shareholders' hands.

Question 28

What are the benefits of registering a private limited company?

Accepted Answer

Benefits include limited liability, separate legal entity, ease in fundraising, tax advantages, and a more professional image with clients and partners. It is ideal for startups and SMEs.

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