Key Legal Documents Required for Startup Incorporation in India

Key Legal Documents Required for Startup Incorporation in India

Key Legal Documents Required for Startup Incorporation in India

Incorporating a startup in India involves various legal documents to ensure compliance with the legal framework under the Companies Act, 2013. Depending on the business structure, these documents can vary slightly. Below are the key legal documents required for startup incorporation in India, focusing on a Private Limited Company but with reference to LLPs and Sole Proprietorships as well.

1. Director Identification Number (DIN) and Digital Signature Certificate (DSC)

These two are mandatory for all directors of the company during the incorporation process:

• DIN (Director Identification Number): Required for all directors, which can be obtained during the incorporation process through the SPICe+ form.

• DSC (Digital Signature Certificate): Required for signing documents electronically during the online incorporation process. Each director must have a DSC issued by a certifying authority.

  
  

2. Memorandum of Association (MOA)

The MOA defines the objectives, scope, and range of activities that the company will undertake. It is a foundational document that outlines:

• The company's name.

• The state in which the company is registered.

• The objectives for which the company is incorporated (main, ancillary, and other objectives).

• The authorized share capital.

  
  

3. Articles of Association (AOA)

The AOA contains the internal rules and regulations for managing the company. It outlines:

• The roles, rights, and duties of directors.

• How decisions are to be made.

• Procedures for appointing or removing directors.

• Share issuance and transfer procedures.

  
  

4. Proof of Registered Office Address

Every company must have a registered office, and proof of this address is required during the incorporation process. Documents include:

• Rent Agreement (if the premises are rented).

• Utility Bill (not older than 2 months) such as electricity or telephone bill.

• NOC (No Objection Certificate) from the landlord or property owner, if the premises are rented.

  
  

5. Identity and Address Proof of Directors and Shareholders

Each director and shareholder needs to submit their identity and address proof. Commonly accepted documents include:

• Identity Proof: PAN card (mandatory for all Indian nationals), passport (for foreign nationals).

• Address Proof: Aadhaar card, voter ID card, driving license, or passport (for Indian nationals); any valid address proof for foreign nationals.

  
  

6. Form DIR-2: Consent to Act as Director

Each director must sign a DIR-2 form to consent to act as a director of the company. This document affirms the willingness of the person to be appointed as a director.

7. Form INC-9: Declaration by Directors

Form INC-9 is a declaration by each director and shareholder stating that they are not disqualified under the Companies Act, 2013, and that they have complied with all the applicable provisions of the act. It must be digitally signed by all directors and subscribers to the MOA.

8. Form INC-22: Verification of Registered Office

This form is used to notify the Ministry of Corporate Affairs (MCA) of the registered office address of the company. It is filed as part of the incorporation process or within 30 days after incorporation.

9. Proof of Capital Contribution (in case of LLPs)

For Limited Liability Partnerships (LLPs), partners are required to submit documents that indicate their capital contribution to the business. These documents provide proof of the agreed capital amounts that each partner contributes to the LLP.

10. Shareholders' Agreement (Optional but Recommended)

A Shareholders' Agreement is not mandatory but is highly recommended for startups with multiple shareholders. It outlines:

• Rights and obligations of the shareholders.

• Rules for share transfer, buyback, or sale.

• Roles and responsibilities of the founders.

• Conditions under which shares can be diluted, and more.

  
  

11. Affidavit from Directors and Subscribers

The directors and initial shareholders (subscribers to the Memorandum) are required to submit an affidavit stating:

• They have not been convicted of any offense related to the formation, promotion, or management of a company.

• They have not been found guilty of any fraud or mismanagement.

• The details of the shares they are subscribing to in the company.

  
  

12. Declaration of Professional (Form INC-8)

Incorporation documents must be certified by a professional, such as a Chartered Accountant (CA), Company Secretary (CS), or lawyer, who verifies that all the details provided in the incorporation documents are accurate and compliant with legal standards.

13. PAN and TAN Applications

The Permanent Account Number (PAN) and Tax Deduction and Collection Account Number (TAN) can now be automatically generated during the incorporation process via the SPICe+ form. These are required for the company's tax filings and statutory deductions.

14. Bank Account Opening Resolution (Post-Incorporation)

Once the company is incorporated, the company will need a board resolution to open a bank account in the company’s name. This resolution is necessary to start financial operations.

Additional Documents for Other Structures:

LLP (Limited Liability Partnership):

1. LLP Agreement: This document outlines the mutual rights and duties of partners in an LLP and is mandatory for registering the LLP. It must be filed within 30 days of incorporation.

2. Partners' Identity and Address Proofs: Similar to a Private Limited Company.

3. Form FiLLiP: Filed for the incorporation of the LLP, which includes DIN application and other necessary information.

4. Declaration of Professional: Similar to Private Limited Company incorporation.

   
   

Sole Proprietorship:

1. Business Registration or Trade License: Issued by the local municipal authority under the Shops and Establishments Act.

2. GST Registration: Required if the turnover exceeds the threshold limit or for specific types of businesses.

3. PAN Card and Aadhar Card of the sole proprietor.

Incorporating a startup in India requires careful submission of these key legal documents. Each document plays an essential role in ensuring compliance with the Companies Act, 2013, as well as providing legal and financial protection to the company, its founders, and investors.

Here’s a tabular representation of the key legal documents required for startup incorporation in India for Private Limited Company, LLP, and Sole Proprietorship:

Document	Private Limited Company (Pvt. Ltd.)	Limited Liability Partnership (LLP)	Sole Proprietorship
1. Director Identification Number (DIN)	Required for all directors. Can be applied via SPICe+ form.	Required for all partners. Can be applied via FiLLiP form.	Not applicable.
2. Digital Signature Certificate (DSC)	Required for all directors to sign documents electronically.	Required for all partners to sign documents electronically.	Not applicable.
3. Memorandum of Association (MOA)	Defines the company’s objectives, share capital, and more. Required for incorporation.	Not required.	Not applicable.
4. Articles of Association (AOA)	Outlines rules and regulations for internal management. Required for incorporation.	Not required.	Not applicable.
5. Proof of Registered Office Address	Rent agreement, utility bill (not older than 2 months), and NOC from the landlord (if rented).	Rent agreement, utility bill, and NOC from the landlord (if rented).	Business registration address or home address proof.
6. Identity & Address Proof of Directors	PAN card (mandatory), Aadhaar card, voter ID, passport, or driving license for all directors and shareholders.	PAN card, Aadhaar card, passport, voter ID, or driving license for all partners.	PAN card and Aadhaar card of the sole proprietor.
7. Form DIR-2 (Consent to Act as Director)	Each director must sign the DIR-2 form to consent to act as a director.	Not applicable.	Not applicable.
8. Form INC-9 (Declaration by Directors)	Declaration that the directors and shareholders are not disqualified under the Companies Act. Required to be signed digitally.	Declaration by partners in the FiLLiP form.	Not applicable.
9. Form INC-22 (Verification of Office)	Filed to notify the Ministry of Corporate Affairs (MCA) of the registered office address.	Similar to Private Limited Company. Filed via FiLLiP form.	Not applicable.
10. Proof of Capital Contribution	Proof of subscribed share capital by the shareholders.	Proof of capital contribution by partners.	Not applicable (sole proprietor’s personal funds).
11. Shareholders’ Agreement (Optional)	Agreement between shareholders outlining rights, obligations, share transfer, etc. Optional but recommended for startups with multiple shareholders.	Partnership agreement outlining rights and duties of partners.	Not applicable.
12. Affidavit from Directors and Subscribers	Affidavit stating that the directors and shareholders have not been convicted or found guilty of fraud.	Similar affidavit required for LLP partners.	Not applicable.
13. Declaration of Professional (INC-8)	A declaration from a CA, CS, or lawyer certifying the accuracy of the incorporation documents.	Similar professional certification required for LLP incorporation.	Not applicable.
14. PAN and TAN Applications	PAN and TAN are automatically generated during incorporation through the SPICe+ form.	PAN and TAN can be applied via the incorporation process or separately.	PAN of the sole proprietor is used for business; TAN may be required if employing staff.
15. Bank Account Opening Resolution	A board resolution is required to open a bank account after incorporation.	A partnership resolution may be needed to open a bank account.	Not applicable (sole proprietor’s personal bank account can be used or a new business account).
16. LLP Agreement	Not applicable.	Mandatory agreement outlining rights and duties of partners. Must be filed within 30 days of LLP incorporation.	Not applicable.
17. Business Registration or Trade License	Not mandatory but recommended depending on the nature of the business.	Not mandatory but recommended for certain businesses.	Mandatory under Shops and Establishments Act for sole proprietorship businesses, depending on the nature of the business.
18. GST Registration	Required if turnover exceeds ₹40 lakh for goods or ₹20 lakh for services.	Required based on turnover or nature of business.	Required if turnover exceeds ₹20 lakh or based on business type.
19. Form FiLLiP (For LLP incorporation)	Not applicable.	Used for LLP incorporation. Also applies for DIN application and DSC submission.	Not applicable.
20. Maternity & Provident Fund Registration	Required for companies employing more than 10 employees under Employees’ Provident Fund and Maternity Benefits Act.	Required for LLPs with employees.	Required if the sole proprietor employs more than 10 employees.

This table should provide a comprehensive snapshot of the key legal documents required for the incorporation of a Private Limited Company, LLP, and Sole Proprietorship in India.

Disclaimer: This article is provided solely for informational purposes and should not be considered as legal advice. For accurate legal guidance, please consult a qualified professional.