Procedure For Incorporation of Company In Punjab: Explained

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Incorporation of Company In Punjab

Company incorporation in Punjab refers to the process of legally establishing a business entity in the state of Punjab in India. Punjab is one of the most industrialized states in India, with a strong economy and a favourable business climate. The state has taken several initiatives to promote entrepreneurship and business development, such as simplifying the incorporation process, reducing compliance requirements, and offering incentives to businesses.

Incorporating a company in Punjab provides several benefits, including limited liability, separate legal entity, access to funding, perpetual existence, brand recognition, tax benefits, and ease of doing business. The process of incorporating a company in Punjab requires several documents, including MOA and AOA, DSC and DIN, residential proof, and declaration of commencement of business.

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Introduction of Company Incorporation in Punjab

Company incorporation in Punjab, India involves a series of steps, including obtaining a Digital Signature Certificate (DSC), Director Identification Number (DIN), name reservation, drafting of Memorandum of Association (MOA) and Articles of Association (AOA), filing incorporation forms with the Registrar of Companies (ROC), obtaining a Certificate of Incorporation, and applying for a Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN). The entire process typically takes between 10-15 working days, provided all documents and compliance are in order. It is advisable to seek professional assistance to ensure compliance with all legal requirements.

Applicability of Company Incorporation in Punjab

Company incorporation in Punjab is applicable to individuals, groups, or organizations wishing to start a business in the state of Punjab, India. It is applicable to all types of companies, including private limited companies, public limited companies, one-person companies, and limited liability partnerships. The process of incorporation is governed by the Companies Act, 2013, and the rules and regulations set forth by the Ministry of Corporate Affairs (MCA) in India. It is necessary to comply with all legal requirements and obtain all necessary licenses and permits to operate a business in Punjab.

Information Required for Company Incorporation in Punjab

To incorporate a company in Punjab, the following information is typically required:

  • Type of company: The type of company to be incorporated, such as a private limited company, public limited company, one-person company, or limited liability partnership.
  • Name of the company: The proposed name of the company, along with alternatives if the preferred name is not available.
  • Registered office address: The address of the company’s registered office, which must be located in Punjab.
  • Directors and shareholders: The names, addresses, and contact details of all proposed directors and shareholders of the company.
  • Authorized and paid-up capital: The authorized and paid-up capital of the company, which determines the maximum amount of capital that the company can raise and the amount of capital that has been invested by the shareholders.
  • Main business activities: A description of the main business activities of the company.
  • MOA and AOA: The MOA and AOA of the company, which outline the objectives, scope, and internal governance of the company.
  • DSC and DIN: The DSC and DIN of all proposed directors.
  • Residential proof: Proof of the registered office address, such as a rent agreement, electricity bill, or property tax receipt.
  • Declaration of commencement of business: A declaration by the company stating that it has commenced business operations.

Documents Required for Company Incorporation in Punjab

The following documents are required for company incorporation in Punjab, India:

  • Identity proof: PAN Card, Aadhaar Card, Voter ID, Passport or Driver’s License of all directors and shareholders.
  • Address proof: Recent utility bill, bank statement, or Aadhaar Card of all directors and shareholders.
  • Passport-sized photographs: Two passport-sized photographs of all directors and shareholders.
  • MOA: A legal document that outlines the company’s objectives, the main business activities, and the scope of the company’s operations.
  • AOA: A legal document that outlines the rules and regulations governing the company’s internal affairs, including the powers and duties of directors, shareholder meetings, and share transfer.
  • Residential proof: Rent agreement, electricity bill, or property tax receipt for the company’s registered office.
  • DSC: A digital signature certificate is required for at least one director to file electronic documents with the Registrar of Companies (ROC).
  • DIN: All directors must obtain a DIN from the MCA.
  • Form INC-9: Declaration by the first subscriber(s) and director(s) of the company.
  • Form DIR-2: Consent to act as director of the company.
  • Form INC-22: Notice of the situation of the registered office of the company.
  • Form INC-20A: Declaration of commencement of business.

Additional documents may be required based on the type of company and the industry sector.

Procedure for Incorporation of Company Incorporation in Punjab

Incorporating a company in Punjab, India involves the following procedure:

  • Obtain DSC: The first step is to obtain a DSC for at least one of the directors of the proposed company. The DSC is a digital equivalent of a physical signature and is required for filing electronic documents with the ROC.
  • Obtain DIN: The next step is to obtain a DIN for all the proposed directors of the company. The DIN is a unique identification number allotted by the MCA and is required to be a director in any company.
  • Name Availability: The proposed name of the company must be checked for availability on the MCA portal. A maximum of 6 names can be suggested in order of preference.
  • Memorandum and Articles of Association: The MOA and AOA must be drafted and filed with the ROC. The MOA states the main objectives of the company, while the AOA contains the rules and regulations governing the company’s internal affairs.
  • Filing of Forms: The duly filled forms for incorporation, along with the required documents and fees, must be filed with the ROC within 20 days of name approval.
  • Obtaining Certificate of Incorporation: If the ROC is satisfied with the documents and compliance, a Certificate of Incorporation will be issued. This certificate serves as proof of the existence of the company.
  • Apply for PAN and TAN: Once the company is incorporated, an application for PAN and TAN can be made with the Income Tax Department.

Benefits of Company Incorporation

There are several benefits of company incorporation in Punjab, including:

  • Limited liability: One of the most significant benefits of incorporating a company is limited liability, which means that the shareholders’ personal assets are protected from the company’s debts and liabilities.
  • Separate legal entity: A company is a separate legal entity from its owners, which means that it can enter into contracts, sue and be sued, and own property in its name.
  • Access to funding: A company can raise funds through equity and debt financing, which can help it grow and expand its business operations.
  • Perpetual existence: A company has a perpetual existence, which means that it continues to exist even if its shareholders or directors change.
  • Brand recognition: Incorporating a company gives it a formal legal structure and can enhance its brand recognition and credibility.
  • Tax benefits: Companies are eligible for several tax benefits and incentives offered by the government, such as lower tax rates, tax holidays, and exemptions.
  • Ease of doing business: The government of Punjab has taken several initiatives to improve the ease of doing business, such as simplifying the incorporation process, reducing compliance requirements, and offering incentives to businesses.
  • Overall, incorporating a company in Punjab provides several benefits and can help entrepreneurs and businesses succeed in today’s competitive business environment.

Expected Duration of Company Incorporation

The expected duration for company incorporation in Punjab depends on several factors, including the type of company, the completeness of the documentation, and the workload of the ROC. In general, it takes around 10 to 15 business days to incorporate a private limited company in Punjab if all the documentation is complete and there are no errors or issues. However, the process may take longer if there are errors or discrepancies in the documentation or if additional documentation is required.

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Takeaway

Company incorporation in Punjab provides several benefits, including limited liability, separate legal entity, access to funding, perpetual existence, brand recognition, tax benefits, and ease of doing business. The process of incorporating a company in Punjab requires several documents, including MOA and AOA, DSC and DIN, residential proof, and declaration of commencement of business. The expected duration for company incorporation in Punjab is around 10 to 15 business days, depending on several factors. Entrepreneurs and businesses can take advantage of the favourable business climate in Punjab, which offers several incentives and initiatives to support the growth and development of businesses. It is advisable to contact with the experts of Legal Window for further information regarding the same topic. 

CS Urvashi Jain is an associate member of the Institute of Company Secretaries of India. Her expertise, inter-alia, is in regulatory approvals, licenses, registrations for any organization set up in India. She posse’s good exposure to compliance management system, legal due diligence, drafting and vetting of various legal agreements. She has good command in drafting manuals, blogs, guides, interpretations and providing opinions on the different core areas of companies act, intellectual properties and taxation.

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