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Eligibility Criteria for Company Registration in India

Eligibility Criteria for Company Registration in India

Before registering a company in India, it’s crucial to understand the eligibility requirements outlined under the Companies Act, 2013. These criteria ensure that your business complies with legal standards and is well-prepared for incorporation. Here’s a comprehensive guide to assess your eligibility for company registration in India.

1. Minimum Number of Directors and Shareholders

Private Limited Company

  • Minimum two directors and two shareholders are required.
  • At least one director must be an Indian resident.
  • A single individual can act as both a director and a shareholder.

One Person Company (OPC)

  • Requires one director and one nominee.
  • The director must be an Indian citizen and resident.

Limited Liability Partnership (LLP)

  • Requires at least two partners, with one being a resident of India.

2. Residency Requirements

At least one director must have resided in India for a minimum of 182 days in the previous calendar year. This ensures local representation for legal and compliance purposes.

3. Age and Legal Capacity

  • Directors and shareholders must be at least 18 years old and of sound mind.
  • There is no upper age limit for directors.

4. Unique Company Name

  • The proposed company name must be unique and not identical to any existing company or trademark.
  • Use the Ministry of Corporate Affairs (MCA) portal to verify name availability.

5. Registered Office Address

  • A registered office address within India is mandatory.
  • The address can be residential or commercial but must be verifiable through utility bills or ownership documents.

6. Capital Requirements

  • There is no mandatory minimum paid-up capital for company registration.
  • The authorized capital must be declared during the incorporation process.

7. Digital Signatures and Identification Numbers

Digital Signature Certificate (DSC)

  • Required for all directors to authenticate electronic documents during the registration process.

Director Identification Number (DIN)

  • Each director must obtain a DIN, which can be applied for through the MCA portal.

8. Compliance with Legal Provisions

Directors must not be disqualified under Section 164 of the Companies Act, 2013, which includes:

  • Insolvency.
  • Criminal convictions related to business activities.
  • Breaches of duty or fraudulent activities.

9. Foreign Nationals and Entities

Foreign nationals or entities can also register companies in India, provided they comply with Foreign Direct Investment (FDI) policies and obtain necessary government approvals.

10. Documentation Requirements

Ensure you have the following:

  • PAN and Aadhaar for directors and shareholders.
  • Proof of the registered office address.
  • Memorandum of Association (MOA) and Articles of Association (AOA) for Private Limited Companies.
  • Valid identity and address proofs for all stakeholders.

Conclusion

Meeting the eligibility criteria for company registration in India is essential for a smooth and compliant incorporation process. By understanding these requirements and consulting professional service providers like TaxQue, you can ensure all legal norms are met. Following these guidelines will help you establish a strong foundation for your business.

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