In the last decade, we witnessed the IT field growing and pushing all limits. Today with other businesses many companies are focused on providing services in the IT field.
A company can be incorporated under the Companies Act and choose any one company type depending on its need for capital.
These types consist of public limited companies, private constrained companies, one-person companies, limited liability partnerships, foreign companies, etc. Barring some minor differences, in these types of companies, the process of incorporation is done more or less the same way.
According to Section 33 of the Companies Act, 2013, the registration of a company is acquired through applying with the Registrar of Companies. Other than the application, the subsequent files need to be additionally submitted. These consist of the Memorandum of Associations and the Articles of Association.
Articles of Association are deemed to be vital only in the case of unlimited companies. An agreement copy through which the company proposes to enter into a contract with any individual for their appointment as a director or a supervisor additionally requires to be accepted by the ROC if at all a person has been appointed. Lastly, an assertion that all the necessities of the Act had complied has to be given.
Memorandum of Association
The first step to forming a company is the preparation of a Memorandum of Association. This document includes important details of the company that enables one to understand the object of the company. According to Section 12 & 13 of the Companies Act of 2013, the Memorandum of Association is split into 5 clauses:
- Name Clause
- Registered Office
- Clause Objects Clause
- Liability Clause
- Capital Clause
Articles of Association
Articles of Association is the second most essential document, which needs to be registered with the memorandum in the case of a few companies. Articles are inner guidelines and bye-legal guidelines to outline how the company will in reality operate. Companies that should have the articles of affiliation are:
- Unlimited Companies
- Companies limited by guarantee; and
- Private companies are limited by shares.
As quickly as the company receives its incorporation certificate, the company has to hold a meeting of its directors within 30 days. A Notice should be issued by one of the directors for the first meeting of the board of directors of the company, at least seven days before the meeting. A minimum of 4 Board meetings shall be held in a company in one calendar year.
The minutes of the board meeting is required to be organized within fifteen days of the board meeting and maybe finalized within thirty days from the date of the meeting.
Appointment of the Auditor
The Company has to Appoint the first Auditor within 30 days of incorporation.
Maintenance of Records
Every company registered under the act has to preserve certain Statutory Registers as given in Section 85, Section 88, and so on of the Companies Act, 2013 and are required to preserve it at its registered workplace in the prescribed form. In case of any failure in retaining the statutory register, the company, in addition to directors, can be fined and prosecuted.
Filing of Annual Accounts and Annual Return
The company is required to file the annual financial statements within 30 days and within 60 days from the date of the Annual General meeting.
Filing of Annual Accounts- Form AOC-4 and Form AOC-4 CFS (in case of consolidated financial statements) should be filed within 30 days from the conclusion of the AGM. In the case of OPC, it should be filed within 180 days from the close of the financial year.
Filing of Annual Return should be done in Form MGT-7 within 60 days from the conclusion of AGM.
Filing of resolutions with MCA regarding Board Report and Annual Accounts should be done in Form MGT-14 within 30 days from the date of financial statements and Board Report by the Board of Directors.
Securing a Domain Name
Irrespective of whether the company is registered as a partnership firm, LLP, or a company all registration files require the specification of a business name. Like any other company, the Name of your software company will become your identity and therefore it is of most important significance to have ownership over the domain name of the Company, as nearly all of your clients, providers, and traders might need to look up at your online presence.
Intellectual Property Rights and Compliance
Make sure that your company has secured its IPR and at the same time it should not infringe other party’s IPR. IP value of a Company is important to attract investors. The Name of the Company, the logo, etc contain IP value.
License Permits and Other Approval
Depending on the field of focus different licenses and approvals must be obtained to carry on smooth business. Especially when we talk about Information technology and Softwares, it is very crucial to double-check on the requirements.