Should I form a Private Limited Company now or after April 1st?

At the end of the financial year, the question on everyone’s mind is – Should I form my Private Limited Company / LLP / Partnership now? We all know that…

At the end of the financial year, the question on everyone’s mind is – Should I form my Private Limited Company / LLP / Partnership now?

We all know that as the accounting year draws to a close, any Company which is incorporated has to file its accounts and audited statements.

So the question is: should I start now or should I wait?

Well, I run the risk of making this article really pointless by saying that it does not make any difference, but I will say that nevertheless. Because the way in which Company Incorporation functions, it takes almost 21-30 days before your Company is incorporated in any case. So starting today (the middle of March) means that your Company will almost certainly be good to go only on the 5th or the 6th of April. And that is in the new financial year.

So since we have broadly covered the major question, let us look at how a Company is actually incorporated in India.

Step 1 is to provide basic information, which is used to apply for what is called the Director’s Identification Number, or the DIN.

The Director’s Identification Number is the basis for the rest of the incorporation procedure.

Step 2: After you finish applying for the DIN, you need to file a form called Form 1A, where you apply for the name of your Company. The law (and the Ministry of Corporate Affairs) require that you submit atleast 6 potential names for your Company.

A quick tip that we can give you is that normally, the Registrar of Companies selects the 3rd name which you give, so make the 3rd name you give the best.

Step 3: The process of getting your name approved takes a very long time, and at the end of that process, you are ready to enter the final stage of the incorporation process, which is to file your Memorandum of Association and your Articles of Association with the Registrar of Companies in the city or region in which you are situated.

Today, the entire process of incorporation has to be done online, which means it does not really matter which city you live in or your business is located in, you can incorporate your Company from anywhere.

Step 4: After you have filed your names and basic documentation before the Registrar of Companies, you will get (and this will also take some time) the Certificate of Incorporation from the Registrar of Companies.

Your company is now incorporated. If you are trying to form a Public Limited Company, you need to additionally get what is called a Certificate of Commencement of Business, but this will probably not interest any of the people reading this article. Since the Public Limited Company is raising funds from the Public (and hence the name), you also need to issue what is called a prospectus or a Statement in lieu of the Prospectus.

Company incorporation is not difficult. It only requires careful preparation and some patience. And that is to be expected: after all, forming a company in law is equal to creating an altogether new person.

[About the author: Contributed by Hrishikesh Datar, founder of, online legal services provider (Legal Advice, Legal Documents & more.]

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