What is the incorporation of company? In a few simple words, the incorporation of a company is a legal process of forming a corporate entity or company. Any incorporated company is registered as a separate legal entity by the law. These corporate legal entities are entirely separate from their owners.
What are the advantages of incorporation of a company? There are various advantages of the incorporation of a company, and some of them are as follows;
- Separate entity
- Limited liability
- Help to generate capital
- Corporate personality
- Transferable shares
- Right to sue
- Perpetual succession
- Flexibility and autonomy to form policies
So, these are the significant advantages of the incorporation of a company. Now let’s move toward the essential steps in the incorporation of a company.
What are the significant steps in the incorporation of a company? There are nine essential steps in the incorporation of a company, and these steps are as follows;
Approval of company name –
The first step in the incorporation of a company is to apply to check and get approval for the company name. It is necessary to decide on a name for the company for its identification and legal registration. When deciding on a company name, you should ensure that it will end with ‘Private limited’ if it is a private company and ‘limited’ if it is a public company.
Preparation of necessary documents contains required details –
Once you get the approval for your company name, you need to prepare some required documents, which are as follows;
- Declaration by the directors of the company
- Identity proofs and Residential address proof
- Office address proof
- Utility bills like electricity or water bills. These bills shouldn’t be more than two or three months old.
Fill out an information form
Once you have the required documents ready, fill out an information form to provide the necessary details. Be careful while filling out the form to ensure that you provide the correct details and information.
Preparation of memorandum of association
We can define MOA (Memorandum of Association) as the constitution or rulebook of the company. It contains some essentials regarding the company, such as the type of business, the objective of the company, and the corporate plans. When you prepare a memorandum of association, you should divide it into five major clauses, which are;
- Name clause
- Objects clause
- Registered office clause
- Liability clause
- Capital clause
Preparation of article of association
Article of association is a legal document of the company which contains the rules and regulations for the internal management of the company.
Power of attorney
A company promoter should employ an association as an attorney to fulfill the legal documentation formalities of the incorporated company.
The statutory declaration states that all rules, regulations, and information regarding business are as per the legal acts and laws.
Payment of registration fee
Then you should pay the registration fee to register the company as a legal and separate entity successfully.
Certificate of incorporation
If you have fulfilled all the requirements now, you can get the certificate of incorporation.
So, these are the nine essential steps in the incorporation of a company.