You are currently viewing Company Registration FAQs 2023 (Updated) India

Company Registration FAQs 2023 (Updated) India


Company Registration FAQs 2023 India

Here are some Frequently Asked Private Limited Company Registration Related Questions With Answers for you, If you haven’t found what you are looking for, Then Please Write your query to, We will reply to your question shortly. Or you also can call us at +91 7305 345 345
Below you’ll find the list of how to apply for company registration and essential documents and other information

Pvt Ltd Company One Person Company Partnership Firm
LLP Company Public Limited Company Producer Company
Nidhi Company Section 8 Company Sole Proprietorship Company

Q) What is a company registration and write in brief?

An association or a formation of a firm with a group of people that might be registered under previous laws or present-day acts. They hold separate legal entities for shareholders. There are differences noted between the controlling person and an owning person.

Q) What are the different types of company registration?

  • Pvt Ltd Company Registration
  • Public Limited Company
  • Limited Liability Company
  • Unlimited Liability Company
  • Non-Profit Organizations / Sec.25 companies

Q) What is MOA?

MOA is the short form of the Memorandum of Association,  which reveals the company’s name, registered office address, aim, objective, limited liability-related clause, limited paid capital, and the share capital of the firm. It is the relationship of the company with the external universe.

Q) What is an AOA?

Incorporation with the company registrar through the submission of the necessary documentation. When AOA is in conjunction, it is called a constitution of the company.

Q) What is DSC?

The digital equivalence of physical papers or certificates is DSC, Digital Signature Certificate. An electronic signature from the concerned department is required to file the form. In major required for a private company.

Q) What are the different classes of DSC?

  • Class-1 DSC: This class of DSCs is issued to private subscribers and individuals to help them in securing their email communications, and authentication of their individual identity.
  • Class-2 DSC: These DSCs are issued to company directors and other signatory authorities of a company/firm/organization.
  • Class-3 DSC: This class of DSC is useful for participation in e-Tenders and e-Auctions, conducted anywhere in entire India.

These are the three different stages of DSC that is worthwhile and beneficial in unavoidable circumstances.

Q) What is DIN?

A Directors Identification Number called DIN is the identification number issued to a Director or a prospective Director of a firm through the Ministry of Corporate Affairs managed by the Government of India. This was first categorized under sections 266A and 266G were included in the Companies Act.

Q) How to obtain DIN?

First step: Download the application from the Ministry of Corporate Affairs.
Second step: complete and submit the application with the required documents on address and identity proof.
Third step: verification by Ministry
Fourth step: get the DIN number allowed.

Q) What is OPC?

The concept of One Person Company is the new vehicle for doing business introduced by the Companies Act, of 2013. The old Companies Act, of 1956, required at least two directors and shareholders to form a private limited company. Only one person will be the Director and a shareholder as well. This can be converted to a Private Limited Company at any time.

Q) What are the minimum and maximum number of members allowed in a Private Limited Company?

Minimum – Two Directors and Two Members
Maximum- Fifty
Shares form the total company and every shareholder is a partner.

Q) What is the difference between other sectors compared to OPC?

  • Pre-Incorporation expenses
  • Liability
  • Taxation Aspects
  • Future Aspects
  • Flexibility
  • Need of Loan
  • Perpetuity

These are the positive features when compared to all other firms. But more than these Sole Proprietorship is better as it requires less investment and compliance in the start.

Q) What is a DPIN?

Designated Partner Identification Number, DPIN.  helps to find the designed partner in a limited liability Partnership. It equates to the DIN of both private or public limited company directors. DPIN and DIN are issued by the Ministry of Corporate Affairs.

Q) What is meant by a Private Limited Company?

It is the type of privately held small business entity, in which owner liability is limited to their shares, the firm is limited to having 50 or fewer shareholders, and shares are prohibited from being publicly traded. When it incorporates a legal structure the company becomes independent.

Q) What are the characteristics of a private limited company?

1) Member: There can be or must be two (2) initially and can be extended to two hundred (200) as it grows.
2) Limited liability: Each director and shareholder will have to bare the loss when the company faces it. This means that when the loss is minimal or maximum the shareholders are also supposed to pay for the loss by selling or pledging their own belongings.
3) Perpetual Succession: the company exists at any point in the eyes of the law like it can be any death, insolvency, bankruptcy, or anything.
4) Index of member: no requirement for the main index of the company in the private sector while in the public sector, it has to maintain.
5) Number of directors: It can start two
6) Paid initial capital: a minimum of 1 lakh rupees or more is very essential and can be increased from time to time
7) Prospectus: Detailed prospectus is essential to start a company
8) Subscription: no subscription is required to receive shares in private limited firms.
9) Name: unique, mandatory to use the following naming, must abide by terms and conditions

Q) What are the requirements of a private limited company?

1) Members: it can be two to two hundred
2) Director: two initially must possess a DIN number and one among the two must be a resident of India and should have stayed in India for a minimum of 182 days in the previous calendar year.
3) Name: name is segmented into three parts that are, a name, the function, and a private limited company. The company must suggest 4 to 5 names to the registrar of the company and it will choose one among those as it is unique and attractive. As it will stay with the company till the end.
4) Registered company address: this needs to be registered for the company to run successfully. Before company registration, it is a mandatory procedure that needs to be followed.
5) Digital Signature acquiring: It is mandatory that the director’s digital signature is to be obtained rather than regular visits to sign every paper. Rather it is a rule to attach a digital sign on every page of the online documentation to confirm the verification process.
6) Professional Certificate: it is necessary to get an incorporated certificate finally.

Q) What is a public limited company?

Works by sharing without limitation or restriction on shareholders. The minimum limit is seven members and three directors. The share capital basically requires Rs. 50,000 and this works under the law Companies Act, of 1956.

Q) What is a limited liability company?

A combination of a Company and Partnership where one partner is not liable for misconduct or negligence of another partner and governed as per the Limited Liability Partnership Act, 2008.

Q) What is Section 8 company?

Section 8 company is also known as section 25 company and is incorporated to promote commerce, art, science, research, sports, social welfare, education, charity, religion, protection of the environment, or any such object. The condition is that such a Company should use its profits (if any) for promoting its objectives and should not pay any dividends to its members. This is based on the New Company Act, of 2013.

Q) What does it mean by Micro Finance Company and register it in India?

Micro Finance Institution (MFI), is a non-deposit-taking and non-banking company that provides loans up to Rs. 50,000 to people with low incomes, and residing particularly in rural and semi-urban areas, where regular banking facilities are not easily available. Farmers, agriculturists, horticulturists, small business people, etc. This works under the RBI Act of 1934.

Q) Merger and Acquisition are possible only for.

This is the way for strategic management, a combination of two firms or individual companies. The desired synergy achievement or failure is the destination of merger and acquisition. The major goal of merger and acquisition is generating synergy.

Q) What is the company Law Act, of 2013?

Indian Parliament consolidates and amends the following through the Company Law Act, of 2013

  • A minimal paid capital is required to start a Private Limited Company in India.
  • The need for the Commencement of Business Certificate post registration is canceled in the new Act.
  • The common stamp is optional at present and acceptance of the signatures of the Directors is very important.
  • At present, there are strict punishments given for Companies that welcome or accept stores beginning from the Public without any approval from the Regulatory Authorities.
  • The Holding Company can provide loans or guarantees to the subsidiary Company.
  • A company having losses or negative reserves cannot declare dividends.
  • Board Resolutions will be confidential starting now.

Q) What is an Authorized Capital? What is the minimum authorized capital for registering my company?

1) While Registering a Private Limited Company, your firm promoters are to decide the amount of authorized capital and the share value they get in return as they invest in your Company.
2) The highest end limit of the capital given to a Company that can issue shares and collects money from its shareholders is said to be Authorised Capital or Registered Capital. The authorized capital is approved through the resolution given in a meeting of the shareholders.
3) The least Authorised Capital of a Private Limited Company required is Rs. 1 lakh for which the Ministry of Corporate Affairs charges Rs 5,000/- as a fee for allotting this minimum authorized capital.

Q) Can foreigners register and become the owners of an Indian-registered company?

Yes, foreigners can register as owners of Indian companies. But there must at least be an additional Indian to launch a company.

Q) What do you mean by the Start-Up India initiative?

Prime Minister Dr. Narendra Modi proposed a program known as Start-Up India on the 69th Independence Day of India. This program is to encourage entrepreneurship in the nation. On January 16, 2016, the Government of India launched this Start-Up India program to motivate the young spirit’s in the Country. This plan reveals the Start-Up Action Plan which revolutionizes the consumer industry through its excellent and innovative ideas promoting the Make in India policy of the government.

Q) Is there a need for the physical presence needed for Private Limited Company incorporation?

No, as the process is entirely done online the candidate is not required to be present physically.

Q) Why is it necessary to register a company?

Companies must register their business in India to open a current bank account for business transactions. For legal verification, most banks require the incorporation document and memorandum of association.

Q) Can I run a company without registration?

A sole proprietorship may be run without registration, but in order to gather and file state taxes, you must register with your local government. As long as your company is legitimate and complies with all licensure and tax requirements, there is nothing wrong with operating an unregistered business.

Q) Can a company be registered without GST?

According to the GST Act, all small enterprises are required to register for GST. If you are a manufacturer with an annual turnover of more than Rs. 40 Lakhs, you must strongly contemplate obtaining a GST for small businesses.

Q) What are the minimum requirements to register a company?

For Company Registration, a copy of the proposed Directors’ PAN cards will be required. A permanent Account Number, or PAN, is a unique identifier issued by the Indian Department of Income Revenue.

Q) How much does it cost to register a company?

Private and non-profit organizations that are registered without members must pay R125 for business registration. A non-profit organization must have a minimum of three (3) directors, while a private business must have at least one (1).

Q) What is the meaning of registering a company?

Registration is the procedure by which a business submits the required documents to the Securities and Exchange Commission (SEC), describing the specifics of a proposed public offering.

Q) Can a single person register a company?

Yes, the private business will also submit form INC-6 in order to become an OPC. When a private company is converted into an OPC, its paid-up share capital cannot be greater than fifty lakh rupees, nor can its average yearly turnover be greater than two crore rupees.

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