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(Note that the information provided here is subject to further changes and amendments that may take place. This information is correct as of April 2014. You are advised to verify the latest data at all times.)
Step 1: Obtain a Digital Signature Certificate (DSC) for each proposed director of the company.
A digital signature certificate (of Class 2) is required for electronic filing of documents with the Registrar of Companies, through the website of the Ministry of Corporate Affairs. It can be purchased from a licensed authority in India, such as MTNL Trustline, e-Mudhra, etc. The certificate may be either in soft copy format or on a USB drive (e-token). A USB e-token is flexible and can be used on multiple computers. However, it is more expensive than the soft copy version. A soft copy digital signature has to be carefully stored and a backup of it must be taken before moving it from one machine to another (or before formatting). Once deleted, a copy of it is not available and a new certificate will have to be applied for.  For example, e-Mudhra digital certificate costs Rs. 1200 (for 1 year validity).

Step 2: Obtain Director Identification Number (DIN) for each director of the company by filing Form DIR 3[1]. Standard set of documents is required to be attached to the form – proof of identity, proof of residence (such as Passport, Voter ID Card, Driving License, Ration Card, PAN Card No.), photograph, and a verification.
Step 3: Submit Form INC-1 for name approval.
After obtaining the DIN and the DSC for the Directors, Form INC-1 needs to be submitted on the MCA-21 portal for approval of a name for the company.
The key guidelines in the selection of name are summarized here:
1.      The name must not resemble or sound the same as the name of an already registered company.
2.      The name of the company should be in consonance with the principal objects of the company and should not be general like “Silk Manufacturing Limited” or vague but should be specific. Form INC-1 of the MCA also contains instruction with regard to selection of a name for the company.
3.      Words suggesting Pan-Indian or International nature of company such as “International”, “India” etc. shall not be allowed if the authorized capital of the corporation is limited to few lakhs and the area of operation is limited to the state.
4.      The name of the company should be not be misguiding or offensive to any section of the people, or which is undesirable in the opinion of the Central Government.
It is suggested that the full text of the rules is read before the entrepreneur chooses his preferences for the name of his startup, so that the name approval process is completed fast without further comments from ROC.
Step 4: Draft and file constitutional documents
Part A - Draft constitutional documents (Memorandum and Articles of Association) (attached as a separate file)[2] (In case of a One Person Company, the MoA must mention the name of the nominee of the OPC and the nomination in Form No INC 2.)
Part B - Filing of Form INC-7 (Form No INC-2 for One Person Company)for registration of the company along with stamped and signed copy of the Memorandum and Articles of Association.
Note:  Usually, the memorandum is accompanied with the articles (both are executed and filed together as part of the same document, and not separately) as the stamp duty payable under state legislations is lower in that case.
The table marked as Annexure 1 at the end of this document reflects stamp duty payable on memorandum and articles of association across major regions of India. The stamp duty must be paid online on the MCA portal itself in these states, through e-stamping.
Note: In case of a One Person Company, the word “One Person Company” must be written in brackets after the name of the company.
Step 5: Submission of particulars of directors, managers and secretary of the company by filing the Form DIR-8 provided by Ministry of Corporate Affairs.
Step 6: Filing of Form INC-22 (notice of situation of registered office) and Form DIR-8 (particulars of directors, consent to act as director, and undertaking to buy qualification shares).
Receipt of Certificate of Incorporation: After examining all these documents the Registrar of Companies issue a certificate of incorporation and a Corporate Identity Number under Section 7 of Companies Act, 2013 after which a private company becomes entitled to run its business.
The table in Annexure 2 summarizes the costs for each step in the incorporation process.
* Please check the chapter on One Person Company (OPC) to understand the steps involved in incorporation of a OPC.

Integrated incorporation form
According to the latest World Bank report, India stands at the 142th position in terms of ease of doing business globally. No wonder, there have always been clamour and concern for bureaucratic hurdles which prevent the business to run efficiently and smoothly. One such hurdle was the bureaucratic procedure as to the incorporation of a new company. However, a welcome step has been taken by the government of India to make the procedure more simple and user-friendly by introducing an integrated e-form INC-29 for incorporating a company in India.

Which category of companies can be incorporated through integrated form?
This form can be used for incorporating a private, public, one-person and producer company, except a company under Section 8 of the Companies Act, 2013. Incorporation of a charitable company under section 8 and company defined under chapter XXI of the Companies Act, 2013 cannot be done through this integrated incorporation form

What are the significant changes
Instead of separately filing different e-forms you can file an integrated e-form – INC-29, for the following purpose (independent form numbers are in brackets):
Obtaining DIN (Directors Identification Number) (DIR-3) (However, the new integrated form INC-29 allows a maximum of three directors to apply for DIN.)  
  • Approval of the name of the company (INC-1)
  • Registration of the company along with memorandum of association and articles of association (INC -7/2)
  •  Intimation of registered office (INC-22)
  • Appointment of director (DIR12)
  • PAN and TAN registration
  • Employer registration under ESIC Act
Note: Companies are allowed to register through individual forms as well.
You can download the detailed guide for filing the form from here.
A company willing to incorporate through the integrated form need to pay INR 2000 along with normal registration fees.

Stamp duty in Mumbai (same all over Maharashtra) (in Rs.)
Memorandum- 200
Articles- 1000
Form INC-7- 100
Total- Rs. 1300
Stamp duty in Kolkata (same rate all over West Bengal) (in Rs.)
Memorandum - 60
Articles - 300
Form INC-7 - 10
Total - 370
Stamp duty in Delhi (in Rs.)
Memorandum- 200
Articles- 150
Form INC-7- 10
Total - Rs. 360
Stamp duty in Bangalore (same rate all over Karnataka) (in Rs.)
Memorandum - 1000
Articles - 500
Form INC-7 - 20
Total - Rs. 1520
Stamp duty in Chennai (same rate all over Tamil Nadu) (in Rs.)
Memorandum - 200
Articles - 300
Form INC-7 - 20
Total - Rs. 520

Table of Government costs & Stamp Duty
(2 Directors, Authorized capital of Rs.1 lakh, stamping in Maharashtra)
No. Step Costs (in Rs.)
Digital Signature for 2 directors ( from e-Mudhra) 2400
Form DIR-3 for DIN (2 Directors) 200
Form INC-1 1000
Form INC-7 – Filing Charge 200
Form INC-7 – Stamp Duty 10 – 100
Memorandum of Association – Stamp Duty 200 – 1000
Memorandum of Association – Filing Charge 5000
Articles of Association – Stamp Duty 150 – 1000
Articles of Association – Filing Charge 200
Form INC-22 200
Form DIR-8 200
Maharashtra 10700
West Bengal 9770
Delhi 9760
Bangalore 10920
Chennai 9920

[1] Download updated forms for filing from the MCA site at http://www.mca.gov.in/MCA21/dca/downloadeforms/Download_eForm_choose.html#
[2] Contents of the attached file may be customized so long as it is in compliance with the Companies Act and rules. Please take legal advice before customizing the clauses. 

Video tutorial on Steps to Incorporate a Company (For Web Access Only)

The following video gives a detailed step-wise procedure on Incorporation of a company:

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