1. What is a company, and what are its different types in India?
A company is a legal entity registered under the Companies Act. In India, common types include:
- Private Limited Company
- Public Limited Company
- One Person Company (OPC)
- Limited Liability Partnership (LLP)
- Section 8 Company (Non-Profit)
2. What is the difference between Memorandum of Association (MOA) and Articles of Association (AOA)?
- MOA defines the company’s scope, objectives, and powers.
- AOA lays down internal rules and regulations for management.
Both are essential documents for company incorporation.
3. What is a Digital Signature Certificate (DSC), and when is it needed?
A DSC is an electronic signature used for secure online filing with the Ministry of Corporate Affairs (MCA). It is mandatory for company directors and authorized signatories during incorporation and compliance filings.
4. What is a Director Identification Number (DIN)?
DIN is a unique identification number allotted to individuals who wish to become company directors. It is obtained by filing an application online with supporting identity and address proof.
5. What is a One Person Company (OPC)?
An OPC allows a single entrepreneur to run a company with limited liability. It provides the benefits of a private limited company but requires only one shareholder and one director.
6. What are “Authorized Capital” and “Paid-Up Capital”?
- Authorized Capital: The maximum capital a company is allowed to raise as per its MOA.
- Paid-Up Capital: The actual capital raised by issuing shares to shareholders.
7. What is a Nidhi Company?
A Nidhi Company is a non-banking finance company formed to cultivate the habit of savings among members. It can accept deposits and lend money only to its members.
8. What is Startup India, and what are its benefits?
Startup India is a government initiative to promote entrepreneurship. Recognized startups enjoy:
- Tax exemptions
- Easier compliance
- Access to funding schemes
Support in intellectual property registration
9. How can I apply for recognition under Startup India?
You need to register on the Startup India portal, provide incorporation details, business nature, and upload required documents such as incorporation certificate and company details.
10. How long does it take to obtain Startup India recognition?
Once you apply with complete documents, recognition is usually granted within 2–3 weeks, subject to government verification.
11. Can foreign nationals or companies register as a startup in India?
Yes. A foreign national can set up a company in India under Indian laws. However, the entity must be incorporated in India and meet the Startup India eligibility criteria.
12. What is a patent?
A patent is an exclusive right granted by the government to an inventor for a new invention, process, or product that provides a technical solution or advancement.
13. How long is the term of a patent in India?
The term of a patent in India is 20 years from the date of filing, irrespective of whether it is filed with a provisional or complete specification.
14. What are the criteria for patentability?
For an invention to be patentable in India, it must satisfy:
- Novelty – must be new.
- Inventive Step – not obvious to someone skilled in the field.
Industrial Applicability – capable of being made or used in industry.
15. Which inventions cannot be patented in India?
Examples include:
- Abstract ideas or theories
- Business methods
- Computer programs as such
- Medical treatment methods
Trivial modifications without innovation.
16. How can I file for a patent in India?
You can file a patent application with the Indian Patent Office either online or physically. Required documents include forms, provisional/complete specification, and payment of prescribed fees.
17. What is the difference between a provisional and complete specification?
- Provisional Specification: Filed to establish an early filing date when the invention is not fully developed.
- Complete Specification: Filed later with full details of the invention.
18. Can I file a patent application online from anywhere?
Yes. India has an online e-filing system for patents, enabling applicants to file from anywhere in the world.
19. What is expedited examination of a patent?
It is a faster review process available for eligible applicants such as startups, women inventors, or those choosing India as the International Searching Authority (ISA) under PCT.
20. What happens if I don’t respond to the Examination Report on time?
If you fail to respond within the prescribed period, the patent application is considered abandoned, and rights over the invention may be lost.
21.What is a Private Limited Company and who can register it?
A Private Limited Company is a business entity privately held by a small group of people. It can be registered by Indian residents, NRIs, or foreign nationals (with necessary approvals).
22.What are the minimum number of directors and shareholders required?
At least 2 directors and 2 shareholders are required to register a Private Limited Company.
23.What are the advantages of choosing a Private Limited Company over other structures?
It offers limited liability, easy fund-raising options, better credibility, and perpetual succession.
24.Can foreign nationals or NRIs be shareholders in a Private Limited Company?
Yes, foreign nationals and NRIs can hold shares, subject to Foreign Direct Investment (FDI) rules.
25.What are the compliance requirements for a Private Limited Company?
They must file annual returns, maintain statutory records, conduct board meetings, and get accounts audited.
26.How is a Public Limited Company different from a Private Limited Company?
A Public Limited Company can raise capital from the general public through shares, while a Private Limited cannot.
27.What are the minimum requirements to register a Public Limited Company?
It requires at least 3 directors, 7 shareholders, and a registered office address.
28.Can a Public Limited Company raise funds from the general public?
Yes, it can issue shares and debentures to raise funds from the public.
29.What additional compliances do Public Limited Companies have compared to Private Limited?
They must comply with SEBI guidelines, appoint independent directors, and follow stricter disclosure rules.
30.Who usually opts for Public Limited Company registration?
Large businesses, companies planning to raise public funds, or those aiming to list on stock exchanges.
31.What is a One Person Company and who is eligible to register it?
An OPC is a company structure for single entrepreneurs who wish to enjoy limited liability. Any Indian citizen can register it.
32.Can an OPC be converted into a Private Limited or Public Limited Company?
Yes, once it crosses the prescribed turnover or capital limits, it can be converted.
33.What are the advantages of an OPC for entrepreneurs?
It allows full control, limited liability protection, and easier compliance compared to Private Limited.
34.Are there any restrictions on turnover or capital for OPCs?
Yes, if turnover exceeds ₹2 crore or paid-up capital exceeds ₹50 lakh, conversion is mandatory.
35.Does an OPC require a nominee during registration?
Yes, a nominee must be appointed who takes over in case of the owner’s incapacity or death.
36.What is an LLP and how is it different from a Partnership Firm?
An LLP is a hybrid structure combining the flexibility of a partnership and the limited liability of a company. Unlike traditional partnerships, partners are not personally liable for each other’s actions.
37.What are the benefits of registering as an LLP?
It provides limited liability, perpetual succession, separate legal status, and fewer compliances than a company.
38.How many partners are required to form an LLP?
A minimum of 2 partners is required, with no upper limit on maximum partners.
39.Is foreign investment allowed in LLPs in India?
Yes, Foreign Direct Investment (FDI) is allowed in LLPs under the automatic route in most sectors.
40.What compliances are required for LLPs annually?
LLPs must file an Annual Return (Form 11) and Statement of Accounts & Solvency (Form 8).
41.What is a Section 8 Company and who can form it?
It is a non-profit company formed to promote education, charity, social welfare, art, or research. Any individual or organization can form it.
42.What are the objectives of a Section 8 Company?
Its main objectives are promoting charitable causes, social development, and non-profit activities.
43.Can Section 8 Companies generate profits?
Yes, but the profits must be used only for promoting the objectives of the company, not for distribution among members.
44.What are the advantages of Section 8 Company over Trusts or Societies?
It has higher credibility, better governance, and can receive foreign donations under FCRA (with approval).
45.What compliances are mandatory for Section 8 Companies?
They must maintain proper books of accounts, file annual returns, and ensure funds are used only for approved objectives.