To register a company, you must follow certain procedure. However, legal counsel is necessary for it to move forward successfully. Penalties may arise from an incorrect legal structure, lack of intellectual property protection, or ignorance of post-compliance obligations. The final step before starting a new business is registering your firm, which will help your entrepreneurial dream come true. In addition to being highly cautious, every step in the company registration procedure must be followed precisely. Nothing could fall between the cracks since doing so may lead to catastrophic errors. Certain common mistakes need to be avoided when establishing a business. Continue reading about errors that derail your company registration process:
Incorrect company name
Selecting a fresh and distinctive name for the new firm to register is the first and most important step in the process. Several laws, rules, and customs govern a company’s naming. The most important are the Names and Emblems Act of 1950, the Trademark Act of 1999, and the Companies Act of 2013. Here are the standards that regulate a company’s name and the specific guidelines laid out by certain sections listed in the Company Incorporation Rules, 2014. Ensure that your business’s name does not conflict with any already-registered trademarks. Conducting a public search on the government’s trademark database is wise.
During Registration, choosing the wrong business type
There are numerous different business structures, such as partnerships, limited liability companies, sole proprietorships, private limited companies, and public limited companies, each with advantages and disadvantages. For instance, there are fewer regulatory restrictions, the business is smaller, and only a few employees are in a private limited company. On the other hand, a public limited company gives owners many more options for legally compliant share sales and capital raising. It is advisable to speak with industry experts to determine the legal criteria for registering a particular business.
Incorrect supporting documents
Certain supporting documents must be attached to your application to complete the registration procedure. A digital signature certificate issued by the applicant must be used to sign and authenticate these papers. PAN, identity verification, proof of the director’s residence, and proof of the registered office address are required supporting documents. One must have a No Objection Certificate from the landlord and a copy of the rent agreement for rented office spaces. Property documentation and an owner’s No Objection Certificate are required if the office space is owned. The important documents that must be included with your application are the e-MoA and e-AoA submitted using INC 33 and INC 34 forms.
Unnecessary director appointment
It is not necessary for every director who will govern company to be an owner or shareholder and vice versa. Stockholders have an equal part of the company’s profits and rights, but directors have special duties. The 2013 Companies Act stipulates that organizations must have a predetermined number of directors and shareholders and that both groups must be aware of their respective roles.
Wrong office address
Filling out the application’s address section frequently leads to confusion. The address of the main office or headquarters, where major business activity will take place, and the personal address of the director signing the application are the two sorts of addresses required on the form. Proof of residency up to two months old is required to substantiate these addresses. The only acceptable forms of proof of address for the application are invoices for phone, water, and electricity.
Winding up
Hopefully, you will learn about the list of errors that derail your company registration process. Your company’s potential growth would undoubtedly suffer if you had to spend enormous sums of money on fines. Therefore, to prevent problems down the line, you must adhere to all legal requirements within the allotted time frame.